Agenda packet — Rancho Mirage City Council, December 21, 2023 (part 2 of 3)

MOVED/SECONDED BY AGOSTINI/CURRAN TO RECOMMEND THAT THE CITY COUNCIL:

A. FIND MAJOR MODIFICATION CASE NO. MOD22-0049 TO BE EXEMPT FROM THE

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) PURSUANT TO CEQA GUIDELINES SECTION 15332 (IN-FILL DEVELOPMENT PROJECTS); AND, B. APPROVE MAJOR MODIFICATION CASE NO. MOD22-0049, SUBJECT TO THE

CONDITIONS OF APPROVAL AND BASED ON THE CONTENT AND FINDINGS IN THE STAFF REPORT.

MOTION CARRIED 5/0.

ENVIRONMENTAL ASSESSMENT
The City has reviewed the proposed Project and determined that the Project requires no further environmental review pursuant to CEQA Guidelines Section 15332 (In-fill Development Projects).

The Project is exempt from CEQA pursuant CEQA Guidelines Section 15332, In-Fill Development Projects. Class 32 exempts in-fill development within urbanized areas if it meets certain criteria: consistent with the General Plan and applicable zoning designation and regulations; within city limits on a site no larger than five acres substantially surrounded by urban uses; located on a site that has no value as habitat for rare or endangered species; would not result in significant adverse effects related to traffic, noise air quality or water quality; and located on a site that can be adequately served by all required utilities and public services. The Project involves the demolition of a portion of a parking lot and construction of a 4,500 sq. ft. retail pad building on a 1.61-acre parcel within an existing shopping center. The Project is consistent with the General Plan and Zoning Code, is within the City limits on less than five acres, and the project site has no value for endangered, rare, or threatened species. The site can be served by required utilities and public services. Therefore, based on Environmental Assessment Case No. EA22-0017 and the City's analysis, no further environmental review is required.

NOTICE OF PUBLIC HEARING
Rancho Mirage Municipal Code Section 17.74.020, Hearing and notice, requires that all property owners, as shown on the county's latest equalized assessment roll, within a 500-foot radius of the boundaries of the subject parcel(s) be notified of matters requiring a public hearing. If the number of property owners to whom the notice would be mailed to is less than 25, then the mailing radius is required to be increased to 1,000 feet as measured from the exterior boundaries of the subject parcel.

AGENDA ITEM#
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DATE: December 21, 2023
EA22-0017 and MOD22-0049

JUSTIFICATION OR INFORMATION CONTINUED

Page 3 of 3 ends

On December 6, 2023, public hearing notices were mailed to property owners within a 1,000- foot radius of the parcel boundaries and posted at the City's designated community posting sites pursuant to the requirements of Chapter 17.74 of the Municipal Code. Notification of the public hearing was published in The Desert Sun on December 10, 2023. Any information addressed to the City Council, but received after completion of this final report, will be distributed at the public hearing. No comments have been received as of the publication date of this report.

ATTACHMENT(S):
1 . Aerial Photo

2. Public Hearing Notice

3. Draft Notice of Exemption

4. Planning Commission Staff Report dated November 30, 2023 (Without Attachments)

5. Planning Commission Meeting Draft Minutes dated November 30, 2023

6. Exhibit Booklet
AGENDA ITEM#
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Environmental Assessment Case No. EA22-0017
Major Modification Case No. MOD22-0049
36101 Bob Hope Drive (APN: 674-600-003)

AERIAL PHOTO
ATTACHMENT 1
16-4
ATTACHMENT 2
ty CITY OF RANCHO MIRAGE
Applicant:

Request:

Location:

Planning Division
69-825 Highway 111
Rancho Mirage, CA 92270
[email protected]
Phone(760)328-2266

PUBLIC HEARING NOTICE

CITY COUNCIL REGULAR MEETING
Thursday, December 21, 2023 -1 :00 p.m.

Environmental Assessment Case No. EA22-0017 and
Major Modification Case No. MOD22-0049 ("Project")
Connor Best of Westar Associates
Consideration to demolish a portion of a parking lot and construct a new 4,500 square-foot retail pad building in an existing shopping center anchored by Gelson's Market. The proposed building will be located on a

1.61-acre parcel along the west side of Bob Hope Drive, approximately 375 feet south of the Bob Hope Drive and Gerald Ford Drive intersection.

This request also includes related landscaping and site improvements. 36101 Bob Hope Drive, Rancho Mirage CA 92270 (APN: 674-600-003) NOTICE IS HEREBY GIVEN that a Public Hearing will be held before the City of Rancho Mirage CITY COUNCIL RE: consideration of the above referenced application pursuant to Rancho Mirage Municipal Code Title 17. This Project is Categorically Exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15332 Class 32 (In-Fill Development Projects). No further environmental review is required .

The Public Hearing will be held on Thursday, December 21, 2023, at 1 :00 p.m., in the Council Chamber, 69-825 Highway 111, Rancho Mirage, California, at which time and place pertinent testimony will be heard. The file, including all environmental information, is available for public inspection at City Hall, Monday through Friday, between 8 a.m. and 5:00 p.m.

Written testimony may be submitted to the City Clerk via email to [email protected] , or mailed to City of Rancho Mirage, ATTN: City Clerk, 69-825 Highway 111, Rancho Mirage, CA 92270. Written testimony must be received no later than 10:00 a.m. on the day of the meeting to be considered by the City Council.

GOVERNMENT CODE§ 65009 NOTICE: If you challenge this proposed activity in court, you may be limited to raising only those issues you or someone else raised at the Public Hearing described in this notice, or in written correspondence delivered to the City Council sufficiently prior to the Public Hearing to enable its consideration by them. 16-5
Phone 760/328-2266
Development Services Department
69-825 Highway l l l
Rancho Mirage CA 92270

NOTICE OF EXEMPTION
ATTACHMENT 3
Fax 7 60/324-985 l
To: D Office of Planning and Research
P.O. Box 3044
C8J Chief Deputy County Clerk
3470 12th Street
Sacramento, CA 95812-3044 Riverside, CA 92501
Project Title/Case Nos. Environmental Assessment Case No. EA22-0017 & Major Modification Case No. MOD22-0049 Project Location:
3610 I Bob Hope Drive
Rancho Mirage, CA 92270
APN: 674-600-003
Applicant/Representative:

Westar Associates
Attn: Connor Best
4650 Von Karman Avenue
Newport Beach, CA 92660
Project Description:

Major Modification to demolish a portion of a parking lot and construct a new 4,500 square-foot retail pad building in an existing shopping center anchored by Gelson's
Market. The proposed building will be located on a 1.61- acre parcel along the west side of Bob Hope Drive,
approximately 375 feet south of the Bob Hope Drive and
Gerald Ford Drive intersection. This request also includes related landscaping and site improvements.

Name of Public Agency Approving Project: Name of Person or Agency Carrying Out Project:

City of Rancho Mirage Joy Tsai
Senior Planner
Exempt Status: (check one)
D Ministerial (Sec. 2108o(b)(1); 15268); D Declared Emergency [Sec. 2108o(b)(3); 15269(a)] D Emergency Project [Sec. 2108o(b )( 4 ); 15269(b )( c)]; D Statutory Exemption; Code N.o _ _ _ ____ _ [8J Categorical Exemption. State type and Section number: CEOA Guidelines Section 15332 (In-fill Development Projects) D Other. State type and Section number: ___________________________ _ Reasons why project is exempt: The Project is exempt from CEOA pursuant CEOA Guidelines Section 15332, In-Fill Development Projects. Class 32 exempts in-fill development within urbanized areas if it meets certain criteria: consistent with the General Plan and applicable zoning designation and regulations; within city limits on a site no larger than five acres substantially surrounded by urban uses; located on a site that has no value as habitat for rare or endangered species; would not result in significant adverse effects related to traffic, noise air quality or water quality; and located on a site that can be adequately served by all required utilities and public services. The Project involves the demolition of a portion of a parking lot and construction of a 4,500 sq. ft. retail pad building on a 1.61-acre parcel within an existing shopping center. The Project is consistent with the General Plan and Zoning Code, is within the City limits on less than five acres, and the project site has no value for endangered, rare, or threatened species. The site can be served by required utilities and public services.

Lead Agency Contact Person: Joy Tsai. Senior Planner Telephone No. (760) 328-2266 Date: _____ _
Joy Tsai, Senior Planner
[8J Signed by Lead Agency Date Received for filing at OPR: ____ _ _ __________ _ 16-6
ATTACHMENT 4

STAFF REPORT
TO:

FROM:

Planning Commission
Joy Tsai, Senior Planner
DATE: November 30, 2023
SUBJECT: Environmental Assessment Case No. EA22-0017 and Major Modification Case No. MOD22-0049 - Westar New Retail Pad Building

SPECIFIC REQUEST OR RECOMMENDATION
Staff recommends that the Planning Commission:

A. Recommend that the City Council find Major Modification Case No. MOD22-0049 to be exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15332 (In-fill Development Projects); and, B. Recommend that the City Council approve Major Modification Case No. MOD22-0049, subject to the conditions of approval and based on the content and findings in the staff report.

ATTACHMENTS

1. Aerial Photo

2. Public Hearing Notice
FACTS

1. Applicant:

2. Purpose of Request:

3. Location:

4. Parcel Size:

5. Existing Streets:

6. Existing Land Use:

7. Existing General Plan/Zoning:

Planning Commission Staff Report

3. Draft Notice of Exemption

4. Exhibit Booklet
Westar Associates
Demolish a portion of a parking lot and construct a
new 4,500 square-foot multi-tenant retail pad
building at the Rancho Mirage Marketplace
anchored by Gelson's Market. The proposed
building will be located on a 1.61-acre parcel along
the west side of Bob Hope Drive, approximately 375
feet south of the Bob Hope Drive and Gerald Ford
Drive intersection. This request also includes
related landscaping and site improvements.
36101 Bob Hope Drive (APN: 674-600-003)

1.61 acres (70,132 square feet)
Bob Hope Drive
Existing shopping center and parking lot
Neighborhood Commercial (C-N)
AGENDA ITEM#
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DATE: November 30, 2023 EA22-0017 and MOD22-0049 Page 2 of 20 JUSTIFICATION OR INFORMATION CONTINUED:

8. Surrounding Land Use:

9. Surrounding General Plan/Zoning:

10. Environmental Information:
11 . Application Deemed Complete:

SUMMARY
N, W: Shopping Center; E: Master Planned
Community; S: Vacant Land
N, W: Neighborhood Commercial (C-N); E: Section
31 Specific Plan, Mixed Use (M-U); S: Very Low
Density Residential (R-L-2)
This Project is exempt from the requirements of
CEQA pursuant to CEQA Guidelines Section 15332
(In-fill Development Projects).

November 14, 2023
The applicant and owner representative, Connor Best of Westar Associates, is requesting approval of a Major Modification to a Development Plan to demolish a portion of an existing parking lot and construct a new 4,500 square-foot retail pad building in an existing shopping center anchored by Gelson's Market. The proposed building will be located on a 1.61-acre parcel along the west side of Bob Hope Drive, approximately 375 feet south of the Bob Hope Drive and Gerald Ford Drive intersection. This request also includes related landscaping and site improvements.

BACKGROUND
The Rancho Mirage Marketplace is a 98,500 square-foot shopping center located south of Gerald Ford Drive and west of Bob Hope Drive. The neighborhood shopping center is anchored by the Gelson's grocery store and includes a variety of retail, restaurants, personal services, professional and medical offices, banks, and a service station uses.

The Rancho Mirage Marketplace was originally approved in 1992 (Preliminary Development Plan Case No. PDP91004) and consisted of a 103,500 square-foot retail center on a 10.82-acre site. In addition to the two main buildings which were previously occupied by Pavilions and other tenants, three future building pads (Pads F, G, and H) were approved as a part of the original entitlements. The three future building pads were intended to be developed as freestanding buildings, compatible in use and design with the main buildings. The Chevron service station (Pad H) was completed in the late 1990's (Conditional Use Permit Case No. CUP98003). A freestanding building (Pad F) was built in the early 2000's (Final Development Plan Case No.

FDP00005). Subsequently, another freestanding building (Pad G), was built in the mid-2000's (Preliminary Development Plan Case No. PDP05013).

A commercial parcel map was recorded when the shopping center was developed, which created each freestanding building pad as separate legal parcels for future sale or lease to commercial users.

Site and Surrounding General Plan, Zoning and Land Uses The Rancho Mirage Marketplace is composed of seven parcels totaling approximately 471,319 square feet (10.82 acres). The project site currently consists of a portion of Building A and the parking lot. The General Plan and zoning designation of the subject property is Neighborhood Commercial (C-N).

Planning Commission Staff Report AGENDA ITEM#
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DATE: November 30, 2023 EA22-0017 and MOD22-0049 Page 3 of 20 JUSTIFICATION OR INFORMATION CONTINUED:

The following table describes the surrounding land uses located adjacent to the subject property:

General Plan and Zoning Designation Land Use
Project Site Neighborhood Commercial (C-N) Shopping center North Neighborhood Commercial (C-N) Shopping center and service station East Section 31 Specific Plan, Mixed Use (M-U) Master planned community - under construction
South Very Low Density Residential (R-L-2) Vacant
West Neighborhood Commercial (C-N) Shopping center

PROJECT DESCRIPTION
Site and Floor Plans
The project site is a 1.6-acre parcel located at the southeast corner of the shopping center and currently consists of a portion of Building A and the parking lot. There are several existing access points into the center from Gerald Ford Drive and Bob Hope Drive. No new public access into the shopping center is proposed, and circulation and access remain unchanged as a result of the proposed new retail pad.

The project proposes a new 4,500 square-foot multi-tenant retail pad building located approximately 25 feet from the Bob Hope Drive street curb. The retail pad building may accommodate three tenants, which have yet to be determined. The proposed building will maintain a minimum of a 71 '-7" building separation from the existing retail building. A new nine foot tall trash enclosure is proposed to be constructed to the north of the building and will be set back 17'-2" from the Bob Hope Drive street curb, similarly to an existing trash enclosure adjacent to the Chevron service station.

Building Elevations and Roof Plan
The proposed retail pad building is single-story, and its architectural design will match the existing shopping center. The building will consist of flat roof areas and hipped roofing. The main building height to top of the parapet is 24 feet, with the apex of the architectural tower element proposed at 33'-2" in height. The architectural tower element ranges from 29'-6" to 33'- 2" in height. Mechanical equipment will be located atop the central flat roof area and screened by the sloped tile roofs and four-foot-tall parapets.

Grading and Drainage
Grading and drainage patterns for the shopping center were established with the approval of the shopping center. The pad elevation for the proposed building is 309.3 feet. Drainage of the 1.6- acre project site will flow generally southwest to reach the "off-site" retention basin located west of the southwest corner of the shopping center. The existing storm drain system will be inspected to determine if any maintenance or modification is required as a part of this project.

Architecture
Planning Commission Staff Report AGENDA ITEM#
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The proposed building design carries forward the architectural style, materials, and colors of the other buildings at the center. Notable features include the warm desert toned color palette, clay roof tiles with natural color blends, and accent tiles. The exterior paint colors will be a light cream color with light peach accents. The roof fascia will be beige, and the metal trellis canopies will be in a rust brown color. The clay roof tiles will be a mixture of three colors, identified as "Caramel", "Buff', and "Mallorca." Architectural accents include the accent tiles and "Salmon" Adoquin stone column skirts. In addition, the new trash enclosure will match the architectural treatment of the proposed building.

The proposed project is consistent with the following goals, policies, and programs in the Rancho Mirage 2017 General Plan Community Design Element:

1. PROGRAM CD 5.1A ("Encourage the use of quality and/or natural materials such as stone, plaster, stucco, and wrought iron.") in that the project proposes and encourages the use of natural materials, such as stone, clay tiles, and stucco.

2. GOAL CD 8 ("Architecture that is sensitive to its context, blending quality materials, distinctive detailing, and a strong sense of living with nature") and PROGRAM CD 8.1 D ("Encourage rich, natural earth tones rather than primary colors for buildings, homes, walls") in that the proposed project was designed to resemble the existing shopping center buildings by proposing to incorporate the architectural style, materials, and colors of the existing center to the greatest extent possible. The main colors and materials palettes include various shades of warm desert and earthtones and natural materials.

ANALYSIS
Review Authority (Rancho Mirage Municipal Code Section 17.34.010) The proposed project requires City Council review and approval of the Preliminary Development Plan application. Therefore, the Planning Commission's role in this matter is to forward a recommendation to the City Council for the discretionary entitlement described in this staff report.

Development Plan Permit (RMMC Chapter 17.42)
The purpose of the Development Plan Permit is to establish consistency with the General Plan and protect the integrity and character of the residential and commercial areas of the city. The process ensures that new development yields a pleasant living environment and attracts the interest of residents and visitors as the result of consistent exemplary design.

The following tables compare the proposed project with the Neighborhood Commercial (C-N) development standards:

Development Feature Development Proposed Meets
Standards Requirements
Lot Coverage Maximum of 30% 30% Yes
Front Setbacks 25' 25' Yes
Side Setbacks 20' 80'-2" on the north side Yes 62'-3" on the south side Planning Commission Staff Report AGENDA ITEM#
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DATE: November 30, 2023 EA22-0017 and MOD22-0049 Page 5 of 20 JUSTIFICATION OR INFORMATION CONTINUED:

Rear Setback 20' 195'-1" Yes
Max. Building Height 20' /1 story 20' to 33' -2" Yes, see height analysis below
The proposed retail pad building is single-story. The building will consist of flat roof areas and hipped roofing. The main building height to top of the parapet is 24 feet, with the apex of the architectural tower element proposed at 33'-2" in height. The architectural tower element ranges from 29'-6" to 33'-2" in height. Mechanical equipment will be located atop the central flat roof area and screened by the sloped tile roofs and four-foot-tall parapets.

Though the proposed project proposes to exceed the twenty-foot maximum building height under the Development Code, the original development plan approval for the shopping center allows heights above twenty feet to create variations in massing. For reference, the anchor tenant's architectural towers are 36 feet tall. Also, in accordance with Development Code Section 17 .20.100 Height measurement, restrictions, and height limit exceptions, building heights may be increased as a part of a development plan application, subject to the following:

1. In addition to the minimum required setbacks, the setbacks shall be increased at a minimum rate of two feet for each one foot of additional building height above twenty feet, which shall be measured from the property line to each portion of the building that exceeds twenty feet; however, the council in exercising their discretion may require significantly greater setbacks.

Staff Response: The proposed project meets the additional setback requirements from the front property line along Bob Hope Drive pursuant to the Development Code. See table below for a summary of the additional building height setback analysis.

Building Feature Height Additional Setback Provided
Proposed Setback Required
Buildinq Eave 20' 25' 25'
Top of Roof Parapet 24' 33' 36'-1"
T ewer Roof Eave 29'-6" 44' 58'-1"
Top of Tower 33'-2" 51 '-4" 69'

2. Enhanced buffering to surrounding properties and the appropriateness of understructure parking shall be evaluated and related conditions of approval may be imposed by the council to mitigate any potential negative impacts on surrounding properties.

Staff Response: The applicant is proposing to demolish a portion of a parking lot to construct a 4,500 square-foot retail pad building within an established neighborhood shopping center. The proposed project is not proposing to exceed existing height limits on-site. The main buildings (A through E) have rooflines varying from 21 '-8" to 24', and at accent locations extending from 25'-4" to 31 '. The freestanding buildings (Pads F through H) all have tower elements that average to 28' in height and roofline masses that average 22' in height. As previously mentioned, the anchor tenant's architectural tower is 36 feet tall, which is taller than the proposed tower element of the proposed project.

The architectural element for the proposed project is located on the interior side most Planning Commission Staff Report AGENDA ITEM#
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distant from Bob Hope Drive. The tower element maintains a minimum setback of 58'-1" from the property line along Bob Hope Drive. The proposed project will not change the existing circulation and access.

3. A visual and spatial analysis relating building proportions, massing, height, and setback shall be conducted to preserve and enhance the scenic viewshed and related conditions of approval may be imposed by the council to mitigate any potential negative impacts on scenic viewsheds.

Staff Response: The proposed retail pad building is single-story and designed to be similar to the existing buildings within the shopping center. The applicant provided a line of-sight analysis and building sections as a part of the project. The building will consist of flat roof areas and hipped roofing. The main building height to top of the parapet is 24 feet, with the apex of the architectural tower element proposed at 33'-2" in height. The architectural tower element ranges from 29'-6" to 33'-2" in height. Mechanical equipment will be located atop the central flat roof area and screened by the sloped tile roofs and four-foot-tall parapets. In addition, the proposed project is not proposing to exceed existing height limits on-site. The main buildings (A through E) have rooflines varying from 21'-8" to 24', and at accent locations extending to 25'-4" to 31'. The freestanding buildings (Pads F through H) all have towers that average to 28' in height and roofline masses that average 22' in height. Lastly, the architectural element is located on the interior side most distant from Bob Hope Drive. The tower element maintains a minimum setback of 58'-1" from the property line along Bob Hope Drive.

4. The need and appropriateness of the additional height shall be demonstrated to the satisfaction of the council.

Staff Response: The additional height is necessary to screen rooftop mechanical equipment and add additional architectural interest to the massing and scale of the building. The proposed building will consist of flat roof areas and hipped roofing, an established architectural style within the shopping center. In addition, the proposed project meets the additional setback requirements in accordance with Development Code Section 17.20.100.

5. Compatibility and harmony with surrounding development, land uses designations, and zoning shall be demonstrated subject to the satisfaction of the council and related conditions of approval may be imposed by the council to mitigate any potential negative impacts on the compatibility and harmony with surrounding development, land use designations, and zoning.

Staff Response: The proposed retail pad building is single-story. The building will consist of flat roof areas and hipped roofing like existing buildings in the shopping center.

The applicant has provided a line-of-sight analysis and has designed the project to meet the additional setback requirements for areas exceeding twenty feet in height. Based on the existing conditions, sight line analysis, and architectural design of the project, the project is compatible with the shopping center.

Planning Commission Staff Report AGENDA ITEM#
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Required Parking and Parking Demand
General retail stores require 1 space for each 250 square feet of gross floor area pursuant to Development Code Section 17.26.040 Number of parking spaces required. The project is proposing a total off-street parking supply of 494 spaces. The parking required for the current palette of uses excluding the proposed retail pad building is 521 spaces. The proposed retail pad requires 18 spaces based on Development Code requirements. The total off-street parking requirement for the center would thus be 539 spaces, leaving a deficit of 45 spaces.

Development Code Section 17.26.050 Adjustments to off-street parking requirements provides a methodology to allow a reduction in the required number of parking spaces when multiple uses share the same pool of parking spaces, such as within shopping centers. The shared parking methodology was concluded to be applicable to Rancho Mirage Marketplace as the individual land use types experience peak demands at different times of the day.

When reviewing parking impacts on shopping centers, the various uses and peak business hours for those uses are taken into consideration. The existing shopping center has uses ranging from retail, restaurants, medical and professional offices, personal seNices, and seNice station. The varying uses result in a range of peak business hours and parking demands.

Therefore, staff requested a parking demand for the proposed project. A parking demand analysis dated December 13, 2022, was prepared by traffic engineers Linscott, Law & Greenspan and is available for public inspection at City Hall. The parking assessment evaluated the parking demand and operational needs of the shopping center at full occupancy and concluded that the peak hours and parking needs do not conflict with existing uses.

Based on the parking demand analysis, the existing parking supply would accommodate the parking demand of existing uses and the proposed retail pad. The proposed parking supply within the Rancho Mirage Marketplace totals 494 spaces. By applying the City's shared parking analysis methodology, the shopping center parking lot is short three stalls. By applying the Urban Land lnstitute's Shared Parking 3rd Edition methodology, the shopping center parking lot has five surplus stalls. This is in a situation with 100% occupancy and only occurs in the peak hour (about one hour a day). In reality, the diversity of the tenants with different business hours and peak periods makes such occurrences unlikely. In addition, historical tenant information from the applicant supports the fact that it is unlikely for the shopping center to be at 100% occupancy. The five-year average occupancy rate is 89%, and the current occupancy rate is 85%. The table below provides a summary of the shopping center's occupancy rate for the past five years.

Gelson's Sho Center Avera
2018 2019 2020 2021
94% 91% 83% 90%
2022
87%
Rate
5-Year
Avera e
89%
Current
85%
Given the overall parking demands and the types of adjoining uses, it is reasonable to conclude that the proposed project will be compatible with the other uses in the shopping center and subject site. The parking study indicates that the available shared parking supply of 494 spaces will be sufficient to meet the projected peak parking demands of existing and proposed uses.

Planning Commission Staff Report AGENDA ITEM#
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Therefore, the proposed retail pad building is not anticipated to cause any parking impacts to the existing parking facilities at the Rancho Mirage Marketplace.

Landscaping
The proposed landscape plan will match the existing desert appropriate landscape palette for the shopping center. The plan includes two new finger planter areas and additional landscaping along a portion of the Bob Hope Drive parkway. Plantings include the Dallas red lantana, coral fountain, and various yuccas. Planting areas will utilize 1 "-3" Hickory Creek fractured cobble and ¾" gravel to match the existing groundcover on site. Boulders will also match existing boulders within the shopping center. The landscape plan incorporates a desert appropriate planting palette and complies with the City's landscape development standards. The existing landscape within the project site will remain and be protected in place. Any sparse or damaged plant material will be replaced with like material and size.

Lighting
The proposed project's lighting plan includes two new light pole fixtures within the finger planter areas in addition to sixteen decorative lighting sconces on the new building. The proposed light fixtures will match the existing light fixtures in architectural style, color, and material to the greatest extent possible. The light fixtures will illuminate the building and the parking lot. The parking lot light poles will be a maximum height of sixteen feet to match existing and therefore will not exceed the maximum height permitted of eighteen feet from finished grade. As conditioned, the project's photometric plan will have a zero-foot candlelight reading at the shopping center boundaries.

FINAL DEVELOPMENT PLAN (FDP)
Prior to the issuance of any building permits, the applicant shall submit a Final Development Plan (FOP), which shall include detailed written responses to each of the project's conditions of approval along with the final set of construction, grading, lighting, landscaping, and irrigation plans. Any revisions that are in substantial compliance with the original project, and do not trigger the need for additional environmental analysis, can likely be reviewed at the staff level through either the FOP process or Minor Modification process. If, however, there are wholesale changes to the project during the FOP review, the applicant shall be required to submit additional applications to modify the entitlement as necessary.

ADDITIONAL REVIEW
As part of the project review, staff sent notices to the Public Works Department, Riverside County Fire Marshal's Office, and all other responsible agencies regarding the proposed project on October 12, 2022. In addition, the parking study conducted by Linscott Law & Greenspan was peer reviewed by the City's on-call traffic consultant. Any received comments have been incorporated into this report and the Conditions of Approval.

Architectural Review Working Group (ARWG)
On November 13, 2023, the Architectural Review Working Group conducted a meeting to discuss the proposed Major Modification application. The ARWG members asked questions to which staff and the applicant representatives answered. The following topics were discussed:

Planning Commission Staff Report AGENDA ITEM#
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1) site accessibility and pedestrian flow, 2) rooftop mechanical screening, 3) trash enclosure access, 4) consistency between plans, and 5) providing additional architectural detail, such as glazing, in the back of house elevation fronting Bob Hope Drive.

The ARWG comments have been incorporated into the Conditions of Approval attached to this staff report.

NOTICING REQUIREMENT
Rancho Mirage Municipal Code Section 17.74.020, Hearing and notice, requires that all property owners, as shown on the county's latest equalized assessment roll, within a 500-foot radius of the boundaries of the subject parcel(s) be notified of matters requiring a public hearing. If the number of property owners to whom the notice would be mailed to is less than 25, then the mailing radius is required to be increased to 1,000 feet as measured from the exterior boundaries of the subject parcel. '
On November 15, 2023, public hearing notices were mailed to property owners within a 1,000- foot radius of the parcel boundaries and posted at the City's designated community posting sites pursuant to the requirements of Chapter 17.74 of the Municipal Code. Notification of the public hearing was published in The Desert Sun on November 19, 2023. Any information addressed to the Planning Commission, but received after completion of this final report, will be distributed at the public hearing. No comments have been received as of the publication date of this report.

ENVIRONMENTAL DETERMINATION
The City has reviewed the proposed Project and determined that the Project requires no further environmental review pursuant to CEQA Guidelines Section 15332 (In-fill Development Projects).

Planning Commission Staff Report AGENDA ITEM#
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CONDITIONS OF APPROVAL
Major Modification to Development Plan Case No. MOD22-0049 I. GENERAL

1. This approval shall be effective for two (2) years from the date of City Council approval.

A Final Development Plan permit shall be obtained within this specific time period, or the Major Modification permit shall become null and void unless the expiration date for the project is extended as provided by Rancho Mirage Municipal Code (RMMC) Section

17.68.070.

2. The development of the subject property shall conform substantially with the approved exhibits contained in Case No. EA22-0017 and MOD22-0049 and all associated cases on file in the Planning Division. This includes all dimensional and size specifications, landscaping, hardscape, design treatments (including color and materials), and the locations of buildings, structures, and plant materials as shown in the exhibit booklet approved with the development plan.

3. Prior to issuance of any permits, the applicant shall acknowledge that the approved project and any or all proposed modifications to the approved project shall be completed in accordance with applicable City Ordinances, Guidelines, and other requirements in effect at the time of building permit issuance.

4. The applicant shall execute a written acknowledgment to the Planning Division stating acceptance of and compliance with all of the Conditions of Approval for this Project and all associated cases, and that the plans submitted are in compliance with the Conditions of Approval. No modifications shall be made to said plans without written approval from the appropriate decision-making body.

5. The Conditions of Approval set forth herein may include certain fees, dedication requirements, reservation requirements, and other exactions. Pursuant to Government Code Section 66020(d)(1 ), these Conditions constitute written notice of a statement of the amount of such fees, and a description of the dedications, reservations, and other exactions. You are hereby further notified that the 90-day approval period in which you may protest these fees, dedications, reservations, and other exactions, pursuant to Government Code Section 66020(a), has begun.

6. All green waste shall be disposed of at a permitted composting facility. The applicant shall undertake or cause to be undertaken such action or actions as are necessary to permit and/or otherwise accommodate the implementation of recycling services. Such action or actions may include, but are not limited to: designating and providing adequate area at convenient locations with appropriate access for the placement of dumpsters and/or bin sets; constructing permanent enclosures that meet all requirements of the Code of the City of Rancho Mirage for each dumpster and/or bin set; providing for the security of each dumpster to discourage scavenging, and; providing adequate indoor area at convenient locations for the collection and short-term storage of recyclables. The applicant shall submit a "Recycling Program" that has been reviewed by an agent of the City, which, at a minimum, Planning Commission Staff Report AGENDA ITEM#
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explains, states or otherwise defines: (1) recyclables generated by type; (2) estimate by pounds for each recyclable generated; (3) number of dumpsters and/or plastic bin sets (one set equals three "baskets") needed to accommodate estimated recyclables; (4) location of each dumpster (may be identified on a map attached as an exhibit); (5) method of collection such as curbside at each residential unit or at rear of property by dumpster, etc.; and (6) pick-up schedule for recyclables. The applicant shall provide other such information as may be necessitated by the development proposal.

7. Prior to issuance of occupancy, any mechanical equipment, storage, trash areas, and utilities shall be screened from view from adjacent public rights-of-way and surrounding private property in accordance with RMMC Section 17.20.140. The method of screening shall be architecturally compatible in terms of colors, materials, shape, and size. The screening design and construction shall be subject to the approval of the Development Services Director and shall blend with the design of the structure and include appropriately installed and maintained landscaping when on the ground.

8. A sign program or sign program amendment shall be approved prior to issuance of any sign permits.

II. PLANNING

9. FINAL DEVELOPMENT PLAN REQUIRED
A Final Development Plan (FOP) shall be required prior to issuance of any grading or building permits. The FOP shall include a complete set of Building Construction Plans, Final Lighting Plans (including cut-sheets with Photometric Plan), Precise Grading Plan, Wall Plans, Final Landscaping and Irrigation Plans, a written response to the project Conditions of Approval, and any other requirements as listed in the FOP application and as required by Planning staff.

A. As part of the FDP application submittal, the applicant shall submit a letter of approval from the City's contracted waste hauler, Burrtec, for the trash bin enclosure placement and design. Said enclosures shall be designed to accommodate trash, recycle, and organic waste receptacles as required by State law.

B. The applicant shall incorporate additional architectural elements along the back of house elevation fronting Bob Hope Drive.

10. The Development Services Director shall consider the FOP permit application. The Director may approve an FOP permit if it substantially conforms to the Development Plan and associated Conditions of Approval.

11. The approved Development Plan may be modified only with City approval in a manner in compliance with RMMC Section 17.68.080 Changes to an approved project.

12. The project shall be completed in accordance with the ordinances, requirements, guidelines, and other criteria in effect at the time of building permit issuance.

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13. All roof vents and plumbing stacks shall be routed to the interior side and/or rear of the structure so as to not be seen from the front building elevation. All vents and stacks shall be of a color compatible with the Planning approved building color(s) and have non reflective surfaces.

14. Landscaping, Wall, and Grading Plans shall demonstrate that all electrical transformers, utility pads, cable TV and phone boxes, and similar utility fixtures will be screened, and/or installed underground if required pursuant to RMMC Chapters 12.16 Underground Utility Lines and 17.20 General Property and Use Standards.

15. Landscaping. The plans shall be submitted as a Landscape Documentation Package in accordance with Ordinance No. 990, and as amended by Ordinance No. 1101. Such Plan(s) shall be consistent with the Preliminary Landscape Plan, and the applicant shall provide evidence that the landscape plan has been reviewed and approved by the Riverside County Office of the Agricultural Commissioner and the Coachella Valley Water District (CVWD) prior to requesting a final inspection. The final landscaping and irrigation plans shall incorporate the use of Evapotranspiration (ET) irrigation "smart" controllers which shall include automatic water scheduling, rain, and temperature sensors. Prior to a final inspection, the landscape contractor shall verify in writing with Planning staff that controllers have been installed, are correctly programmed, and operate with these features. More information on smart controllers can be found at www.irrigation.com.

A. The project landscape architect shall submit written verification that the landscaping and irrigation has been installed per the approved plans.

B. Vegetation with spikes that may be harmful to pedestrians shall be a minimum of three (3) feet away from walkways.

C. The Planning Division reserves the right to request additional landscaping upon final inspection if it is determined that areas are devoid of plant or ground cover material, or the execution of the landscaping plan does not comply with the purpose and intent of Chapter 17 .24 Landscaping Standards of the Municipal Code.

D. The landscape plan shall include plantings, such as shrubs or vines, along the trash enclosure facing Bob Hope Drive for screening purposes.

16. Lighting. All exterior lighting shall be shown on the Final Development Plan and shall be low-level directed lighting, energy-efficient and shielded or recessed so that direct glare and reflections are confined within the boundaries of the subject site and shall be directed downward and away from adjoining properties and public right of way. Lighting shall not blink, flash, or be of unusually high intensity or brightness. All lighting fixtures shall be appropriate in scale, intensity, and height to the building and shall be subject to review and approval by the Planning Division.

A. All pole-mounted lights shall not exceed sixteen (16) feet in height, shall be fitted with full cut-off glare shields, and shall be Dark Sky compliant.

B. Light fixtures shall be architecturally compatible to the overall design of the shopping center and shall match existing light pole and fixtures to the greatest extent possible, such as heights, colors, and finishes, including the Planning Commission Staff Report AGENDA ITEM#
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concrete base.

Ill.

C. All exterior light fixtures (existing and proposed) within the subject parcel shall be shown on the photometrics plan at the time of Final Development Plan submittal.

BUILDING

17.TRANSPORTATION UNIFORM MITIGATION FEE (TUMF)
The applicant shall pay to the City the TUMF in effect at the time the Building Permits are issued.

18. LICENSE TAX FOR NEW CONSTRUCTION
Prior to the issuance of Building Permits, the applicant shall pay to the City the license tax for new construction pursuant to Chapter 3.28 of the Municipal Code.

19.MULTIPLE SPECIES HABITAT CONSERVATION PLAN (MSHCP) FEE Prior to issuance of Building Permits, the applicant shall pay to the City the required Multiple Species Habitat Conservation Plan (MSHCP) Fee.

20. DEVELOPMENT IMPACT FEES (DIF)
The applicant shall pay the DIF as a reasonable and proportional share of the cost of public facilities and infrastructure improvements that serve or will benefit the project in accordance with RMMC Chapter 3.29.

21. COACHELLA VALLEY WATER DISTRICT (CVWD) LETTER
Prior to occupancy, if applicable, a letter from CVWD shall be submitted stating that all the district fees have been paid and all requirements have been met for development.

The City and CVWD reserve the right to apply water conservation requirements to the project at the time of Final Development Plan approval and prior to permit issuance. Any required changes shall be reviewed ministerially by City staff and by CVWD pursuant to their adopted protocol.

22. PERMITS & CLEARANCES
The applicant shall provide evidence of permit(s) or clearance(s) from the following agencies:
• City Planning Division
• City Engineer
• City Attorney
• City Contract Specialist
• Fire Marshal
• Riverside County Department of Environmental Health
• Southern California Edison
• Coachella Valley Water District
• Burrtec
• Palm Springs Unified School District
• South Coast Air Quality Management District (SCAQMD)
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IV. PUBLIC WORKS

23.ANNEXATION TO COMMUNITIES FACILITIES DISTRICT (CFO)
Pursuant to Ordinance No. 485, the applicant shall form or annex to a Communities Facilities District (CFO) to pay the City annually for public service costs associated with this project. This requires the submittal of an application fee, the preparation of a boundary map, and 6-8 weeks processing time. The applicant is advised to begin the application process as soon as possible, because the CFO annexation must occur prior to issuance of Building Permits.

24. GRADING & DRAINAGE PLAN
Prior to issuance of a Building Permit, the applicant shall be required to submit a grading and drainage plan prepared by a licensed civil engineer to the City Engineer for plan check and approval. The grading and drainage plan shall be consistent with any and all conditions of approval associated with any applicable subdivision map and any Development Permit entitlements issued for the subject project by the City or any other responsible public agency. The grading and drainage plan shall conform to all city policies, standards, and regulations applicable to the project. In addition, if the project involves grading and drainage issues related to Coachella Valley Water District (CVWD) facilities, written evidence of the District's approval shall be included with the submittal required by the City of Rancho Mirage. Additional plans or materials may be required at the discretion of the Engineering Division. Release of Building Permit(s) will be contingent upon proof that the site has been properly graded pursuant to an approved plan. Prior to issuance of a Grading Permit, the applicant shall schedule and conduct a pre-construction meeting with the City Public Works Inspector at the job site. The Precise Grading Plan shall show how the new construction will tie into the existing storm drain system.

The existing storm drain system shall be inspected to determine if any maintenance or modification is required as a part of this project.

25. LOCAL AIR QUALITY MANAGEMENT PLAN (LAQMP)
The applicant shall prepare a Local Air Quality Management Plan (LAQMP) pursuant to Ordinance No. 855, Municipal Code Chapter 7.01. Said LAQMP shall detail the project's potential impacts upon the air quality of the area and any necessary mitigation measures and shall be submitted to the Public Works Department for review and approval prior to the issuance of the Grading Permit. For ease of preparing a LAQMP, the applicant may contact the Public Works Department regarding use of the LAQMP worksheet.

26. SWPPP/NOI
Prior to issuance of Grading or Building Permits, the Property Owner shall submit the completed Notice of Intent (NOi) form and site plan with the appropriate fee, to the State Water Quality Control Board for the General Construction Activity Storm Water Permit.

Proof of submittal shall be given to the City Engineer. The SWPPP promised by the NOi is required to be kept on the project site and may be requested for viewing by the City or Water Quality Control Board personnel. The WDID number issued with the SWPPP shall be put on the Grading Plan.

27.AS-BUIL T PLANS
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A complete set of "As-Built" Grading, Sewer, Water, Landscaping, Street, Storm Drain, and all other required improvement plans shall be submitted by the engineer of record for review and approval prior to occupancy.

28.SECURITY
In accordance with the request of the Rancho Mirage Police Chief, the site shall be fenced and gated for security purposes. Screening material shall be placed on the fence to help block blowsand and to block views through the fence. If necessary, the applicant shall provide a state licensed private security officer during the time construction workers are not onsite.

29. PAD CERTIFICATION
Prior to release of building permits, a Pad Certification submitted from a Licensed Land Surveyor or Civil Engineer, attesting to the elevation matching the rough grade pad elevation shall be submitted to validate the rough grading completion. Building pad shall be certified by the licensed des.ign engineer or a licensed land surveyor to within 0.1 0 of a foot above or below the approved pad elevation indicated on the approved grading plan.

30. COMPACTION REPORT
Prior to the release of building permits, the lot(s) for the building(s) shall have a compaction report submitted from a Geotechnical Engineer attesting to the buildable pad being compacted at least 90% of maximum relative density. If any over-excavation, or slopes steeper than 2: 1, are needed for the building pad, a Geotechnical Engineer shall submit a document attesting to the acceptability of this non-standard earthwork in accordance with the recommendations of the preliminary soil report.

CITY ATTORNEY
Prior to issuance of Building Permits, the following conditions shall be satisfied:

31. INDEMNITY AGREEMENT
The permittee shall defend, indemnify, and hold harmless the City, its agents, officers, and employees from any claim, action, or proceeding against the City or its agents, officers, or employees to attack, set aside, void or annul this permit approval. The City shall notify the permittee of any claim, action, or proceeding and the City shall cooperate in the defense. If the City fails to notify the permittee of any claim, action or proceeding of which the City has written notice, the permittee shall not thereafter be responsible to defend, indemnify, or hold harmless the City.

32. REIMBURSEMENTS
The permittee shall reimburse the City for any court and attorney's fees which the City may be required to pay as a result of any claim or action brought against the City because of this grant. Although the permittee is the real party in interest in an action, the City may, at its sole discretion, participate in the defense of the action, but such participation shall not relieve the permittee of any obligation under this Condition.

33.IMPROVEMENTSURETY
Pursuant to Chapter 15.64.280 of the Rancho Mirage Municipal Code, all public Planning Commission Staff Report AGENDA ITEM#
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improvements proposed with the Development Plan submittal, or required by the adopted approval Conditions, shall be guaranteed by cash bonds, letters of credit, or other legal instruments acceptable to the City Attorney and City Council.

34. RELEASE OF PLANS
Written authorization must be obtained from any certified, licensed, or registered professional who signed the original building plans authorizing the plans to be made available by the City to all subsequent owners upon request (if on file with the City at the time of the request) for use by any subsequent owners solely for the construction, maintenance, operation, and use of the subject building(s) at the Project Site.

35. NOTICE TO CITY UPON DEFAULT, FORECLOSURE OR BANKRUPTCY In the event that the applicant receives a notice of default from any lender in connection with funds loaned to the applicant for the proposed development, or that any security instrument given by the applicant to any lender is foreclosed upon whether through a trustee's sale or otherwise, or that the applicant files a petition for bankruptcy, the applicant shall immediately notify the City of such notice of default, foreclosure sale, and/or filing of the bankruptcy petition, as the case may be.

VI. CONTRACT SPECIALIST
Prior to issuance of Building Permits, the following condition shall be satisfied:

36. MAINTENANCE OBLIGATIONS
The current and future property owner(s) shall be responsible for maintaining in compliance with all City standards for the same, the on-site and off-site landscaping and integrated architectural features required by this entitlement. Landscape maintenance shall consist of regular watering mowing, pruning, fertilizing, clearing of debris and weeds, and the removal and replacement of irrigation systems, in compliance with all relevant and applicable provisions of the Rancho Mirage Municipal Code. Integrated architectural features must be kept in a manner which maintains the desirability of the immediate area and neighboring areas and respects the harmonious relationship with existing and adjoining developments. Due regard for preservation of each feature and its intended irrigation with surrounding landscaping, buildings, structures, screening, and signs is required. All features must be maintained in a manner commonly accepted by professionals who are experts in the care and preservation of each particular type of feature. A covenant to assure continued maintenance of on-site and off-site required landscaping and integrated architectural features by the current and future property owners or other liable entity, consistent with the terms and provisions of this condition of approval, shall be prepared in a format approved by the City Attorney and recorded in the Office of the Riverside County Recorder against all parcels created with this subdivision and any subsequent amendments thereto.

VII. FIRE MARSHAL

37. The proposed project may have a cumulative adverse impact on the Fire Department's ability to provide an acceptable level of service. These impacts include an increased number of emergency and public service calls due to the increased presence of Planning Commission Staff Report AGENDA ITEM#
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structures, traffic, and population. The project proponents/developers will be expected to provide for a proportional mitigation to these impacts via capital improvements and/or impact fees.

38. Fire Department emergency vehicle apparatus access road locations and design shall be in accordance with the California Fire Code, City of Rancho Mirage Municipal Code, and Riverside County Fire Department Standards. Plans must be submitted to the Fire Department for review and approval prior to building permit issuance.

39. Fire Department water system(s) for fire protection shall be in accordance with the California Fire Code, City of Rancho Mirage Municipal and Riverside County Fire Department Standards. Plans must be submitted to the Fire Department for review and approval prior to building permit issuance.

40. Prior to Building Permit issuance, the required water system, including all fire hydrant(s), shall be installed, and accepted by the appropriate water agency and the County Fire Department prior to any combustible building material placed on an individual lot. Contact the Fire Department to inspect the required fire flow, street signs, all weather surfaces, and all access and/or secondary access. Approved water plans must be at the job site.

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FINDINGS
Major Modification to Development Plan Case No. MOD22-0049 Pursuant to RMMC Section 17.42.060 Findings and decision, a development plan permit may be approved by the applicable review authority only if all of the following findings are made:

A The proposed development is: 1) Allowed within the respective zoning district; 2) Generally in compliance with all of the applicable provisions of this title that are necessary to carry out the purpose and requirements of the respective zoning district, including prescribed development standards and applicable design guidelines; and 3) Consistent with the general plan and specific plan. The proposed use is one permitted within the subject zoning district and complies with all of the applicable provisions of the Zoning Ordinance. The current General Plan and zoning designation for the subject property is Neighborhood Commercial (C-N). The proposed use is a 4,500 square-foot retail building within an existing shopping center. Retail stores and shopping centers are permitted uses by right pursuant to the Rancho Mirage Municipal Code Section 17 .10.012 Allowable commercial and industrial zone uses, permit requirements and project review authority. Individual tenants are required to submit a Use and Occupancy application to the Planning Division to obtain zoning clearance and ensure that their proposed uses are permitted within the C-N zoning district.

As conditioned, the proposed project is consistent with the City's General Plan and Zoning Ordinance development standards for lot coverage, setbacks, height limitations, and landscaping as described in this report.

B. The proposed project would produce a comprehensive development incorporating a more enhanced environment and architectural excellence (e.g., appropriate variety of structure placement and orientation opportunities, appropriate mix of structure sizes, high quality architectural design, increased amounts of landscaping and open space, improved solutions to the design and placement of parking facilities, etc.) than would normally be possible under more standard district development requirements, as conditioned. The proposed project's building materials, colors, and architectural style conform to the existing shopping center buildings. Notable features include the warm earth toned color palette, clay roof tiles, and accent tiles. The new trash enclosure will match the architectural treatment of the retail buildings. The landscaping plan will match the existing desert appropriate landscape palette for the shopping center. A portion of the Bob Hope Drive parkway will be extended and planted with various plantings, such as the Dallas red lantana, coral fountain, and various yuccas. Groundcover includes 1 "-3" Hickory Creek fractured cobble and ¾" gravel to match the existing groundcover on site. Boulders will also match existing boulders within the shopping center. The landscape plan incorporates a desert appropriate planting palette and complies with the City's landscape development standards.

The proposed project is consistent with the following goals, policies, and programs in the Rancho Mirage 2017 General Plan Community Design Element:
1) PROGRAM CD 5.1A ("Encourage the use of quality and/or natural materials such Planning Commission Staff Report AGENDA ITEM#
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as stone, plaster, stucco, and wrought iron.") in that the project proposes and encourages the use of natural materials, such as stone, clay roof tile, and stucco. 2) GOAL CD 8 ("Architecture that is sensitive to its context, blending quality materials, distinctive detailing, and a strong sense of living with nature") and PROGRAM CD 8.1 D ("Encourage rich, natural earth tones rather than primary colors for buildings, homes, walls") in that the proposed project was designed to resemble the existing shopping center buildings by proposing to match the stucco, roof tile color blends, tile accents, and stone column skirting to the greatest extent possible. The main colors and materials palettes include various shades of warm desert and earthtones and natural materials.

C. The design, location, shape, size, operating characteristics, and the provision of public and emergency vehicle access and public services and utilities (e.g., drainage, fire protection, sewers, water, etc.), would ensure that the proposed development would not endanger, jeopardize, or otherwise constitute a hazard to the public convenience, health, interest, safety, or welfare, or injurious to the property or improvements in the vicinity and the respective zoning district. The project, as proposed and conditioned, meets all development requirements of the Municipal Code. Circulation and access remain unchanged as a result of the proposed new pad. The site can be served by required utilities and public services. The current request does not propose to amend the shopping center boundaries. In addition, the existing storm drain system shall be inspected to determine if any maintenance or modification is required as a part of this project. Staff sent notices to the Public Works Department, Riverside County Fire Marshal's Office, and all other responsible agencies regarding the proposed project on October 12, 2022. Any received comments have been incorporated into this report and the Conditions of Approval.

D. The design, location, and proposed uses would be compatible with the character of existing development in the surrounding neighborhood. The proposed use is one permitted within the subject zoning district and complies with all of the applicable provisions of the Zoning Ordinance. The current General Plan and zoning designation for the subject property is Neighborhood Commercial (C-N). The proposed use is a 4,500 square-foot retail building within an existing shopping center. Retail stores and shopping centers are permitted uses by right pursuant to the Rancho Mirage Municipal Code Section 17.10.012 Allowable commercial and industrial zone uses, permit requirements and project review authority. The proposed building materials, colors, and architectural style conform to the shopping center buildings. Notable features include the color palette, clay roof tiles, and accent tiles.

E. The subject site is physically suitable for the type and density/intensity of development being proposed, as conditioned. The proposed use is physically suitable within the subject site. The proposed project requires the demolition of 20 parking spaces to construct a 4,500 square-foot retail pad building within an existing shopping center.

Retail stores and shopping centers are permitted uses by right pursuant to the Rancho Mirage Municipal Code Section 17.10.012 Allowable commercial and industrial zone uses, permit requirements and project review authority.

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Based on the parking demand analysis, the existing parking supply would accommodate the parking demand of existing uses and the proposed retail pad. The proposed parking supply on the site totals 494 spaces. By applying the City's shared parking analysis methodology, the shopping center parking lot is short 3 stalls. By applying the Urban Land lnstitute's Shared Parking 3'd Edition methodology, the shopping center parking lot has 5 surplus stalls. This is in a situation with 100% occupancy and only occurs in the peak hour (about 1 hour a day). In reality, the diversity of the tenants with different business hours and peak periods makes such occurrences unlikely. In addition, historical tenant information supports the fact that it is unlikely for the shopping center to be at 100% occupancy. The 5-year average occupancy rate is 89%, and the current occupancy rate is 85%. Given the overall parking demands and th'e types of adjoining uses, it is reasonable to conclude that the proposed project will be compatible with the other uses in the shopping center and subject site.

F. The proposed project has been reviewed in compliance with the provisions of the California Environmental Quality Act (CEQA) and there would be no potential significant negative effects upon environmental quality and natural resources that would not be properly mitigated and monitored, unless findings are made in compliance with CEQA. The Project is exempt from CEQA pursuant CEQA Guidelines Section 15332, In-Fill Development Projects. Class 32 exempts in-fill development within urbanized areas if it meets certain criteria: consistent with the General Plan and applicable zoning designation and regulations; within city limits on a site no larger than five acres substantially surrounded by urban uses; located on a site that has no value as habitat for rare or endangered species; would not result in significant adverse effects related to traffic, noise air quality or water quality; and located on a site that can be adequately served by all required utilities and public services. The Project involves the demolition of 20 parking spaces and the construction of a 4,500 sq. ft. retail pad building on a 1.61- acre parcel within an existing shopping center. The Project is consistent with the General Plan and Zoning Code, is within the City limits on less than five acres, and the project site has no value for endangered, rare, or threatened species. The site can be served by required utilities and public services. Therefore, based on Environmental Assessment Case No. EA22-0017 and the City's analysis, no further environmental review is required.

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ATTACHMENT 5
~ CITY OF RANCHO MIRAGE:

SPECIAL MEETING OF THE PLANNING COMMISSION
THURSDAY, NOVEMBER 30, 2023 - 2:00 P.M.

City Hall - Council Chamber
69-825 Highway 111
Rancho Mirage, CA 92270
CALL TO ORDER - 2:00 P .M.

DRAFT MINUTES
a) Flag Salute: Led by Commissioner Curran.
b) Roll Call: Agostini, Bryant, Chanter, Curran, Grey - All Present.

COMMISSIONER COMMENTS
Commissioner Chanter commented that she hoped everyone had a great Thanksgiving.

Commissioner Curran hoped everybody had a wonderful holiday and the thanked everyone in attendance.

Vice Chair Agostini welcomed everyone and expressed excitement to see the crowds come back into town again.

Commissioner Bryant commented that he was honored to be a part of all the great things happening in the City as projects roll along.

Chair Grey joined in with everyone else to say it was a great time of year and expressed his appreciation for Thanksgiving.

NON-AGENDA PUBLIC COMMENTS
Brad Anderson, resident of Rancho Mirage, commented that he did not agree with the cancellation of the regularly scheduled meeting or holding a special meeting with public hearing items on the agenda.

APPROVAL OF MINUTES - October 26, 2023, Regular Meeting.

Chair Grey reported that the minutes in the packet had been revised, per the request of Commissioner Bryant. (The revised minutes were provided to Planning Commissioners and made available to the public.)
Public Comments - None.

DRAFT 11/30/2023 Special Planning Commission Meeting Minutes Page 1 of 6 16-27
MOVED/SECONDED BY AGOSTINI/CHANTER TO APPROVE THE OCTOBER 26, 2023, REVISED REGULAR PLANNING COMMISSION MEETING MINUTES. MOTION CARRIED 5/0.

PUBLIC HEARINGS

1. Sign Program Amendment Case No. SIPRA23-0003 - Applicant: Signarama on behalf of Les Jardins. Consideration of a s ign program amendment to modify the existing signage criteria for a one-story building. The subject property is located at 72111 Highway 111 (APN:
682-350-008 ).

A. Consider approving the filing of a Notice of Exemption pursuant to the California Environmental Quality Act (CEQA) Section 15311 (Class 11 - Accessory Structures ).

B. Consider approving Sign Program Amendment Case No. SIPRA23-0003, subject to the conditions of approval and based on the content and findings in the staff report.

Lezlee Vasquez, Assistant Planner, presented the staff report.

Public Comments - None.

Commissioner Comments
Commissioner Chanter commented that the signage was attractive and appropriate for the location.

MOVED/SECONDED BY CHANTER/CURRAN TO:

A. APPROVE THE FILING OF A NOTICE OF EXEMPTION PURSUANT TO THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) SECTION 15311 (CLASS 11 - ACCESSORY STRUCTURES); AND

8. APPROVE SIGN PROGRAM CASE NO. SIPR23-0003, SUBJECT TO THE

CONDITIONS OF APPROVAL AND BASED ON THE CONTENT AND FINDINGS IN THE STAFF REPORT.

MOTION CARRIED 5/0.

2. Environmental Assessment Case No. EA23-0011 and Preliminary Development Plan Case No. PDP23-0005 - Cotino Town Center Phase 1. Applicant: DMB Development LLC on behalf of EC Rancho Mirage Holdings LP. Consideration to construct the first phase of the Catino Town Center, which includes two restaurant buildings totaling 9,057 square feet, three in-line retail buildings totaling 25,254 square feet, the Artisan Village, a 4,440 square-foot back of house building, and ancillary structures and uses such as the park, shade structures, and restroom/utility building. The Artisan Village consists of nine small tenant buildings totaling 1,844 square feet. The proposed Project will result in 40,979 square feet of combined commercial and office space. The subject property (Tract No. 38291, Lot 186 and Tract No. 37563, Lot 6) is in the northeastern quadrant of the Section 31 Specific Plan area and can be accessed from Monterey Avenue (APNs: 685-220-032 & 685-220-033).

A. Consider recommending that the City Council find Preliminary Development Plan Case DRAFT 11/30/2023 Special Planning Commission Meeting Minutes Page 2 of 6 16-28
No. PDP23-0005 to be exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Sections 15162 (Subsequent EIRs and Negative Declarations).

B. Consider recommending that the City Council approve Preliminary Development Plan Case No. PDP23-0005, subject to the conditions of approval and based on the content and findings in the staff report.

Joy Tsai, Senior Planner, presented the staff report.

Commissioner Comments
Commissioner Chanter commented that it was exciting to see the plans come to life and she liked the attractive and vibrant design that could be enjoyed by pedestrians.

Commissioner Curran noted his background in the commercial real estate industry and expressed appreciation of the time and effort put into the planning and development of the project. He added that the mix of tenant types would be a great addition to the community.

Commissioner Agostini concurred with Commissioners Chanter and Curran, noting he looked forward to the future progress and advancement of Catino.

Commissioner Bryant commented that the City was fortunate to have an experienced developer, such as DMB Development, involved in the project. He noted the project would be a superb amenity, not only for Catino and Rancho Mirage, but for the entire Coachella Valley. He added that the whole Town Center was going to contribute to an economic boom and be another reason for people to visit and/or move to Rancho Mirage.

Commissioner Bryant commented on the walking areas, the different shade structures, and the road going down the Town Center. He asked the developer to explain 1) the adequacy of the Artisan Village pedestrian corridor shading, and 2) the concept of the parking area and the street, Painted Shore Drive, that was designed to go through the middle of the Town Center.

Paul DePalatis of MSA Consulting and project applicant answered Commissioner Bryant's questions. He explained that Painted Shore Drive was a primary utility and maintenance vehicle access corridor serving the Town Center. He added that parking spaces were provided in front of the in-line retail buildings for "drop-in" customers. He also explained that the shading for the Artisan Village has slightly different design program and intent than the in-line retail buildings and was designed to allow view corridors.

Jarvis Payne, landscape architect from MSA Consulting, further elaborated on the landscape design concept of the Artisan Village. He clarified that the Artisan Village incorporates canopy shade trees, shade structures, and awnings over the kiosk buildings and oriented with sun angles in mind.

Commissioner Bryant asked if the California Department of Real Estate (DRE) required public reports for ground leases in this development.

Eric Brown, general manager for DMB Development, responded that DRE involvement was not required for the subject project.

DRAFT 11/30/2023 Special Planning Commission Meeting Minutes Page 3 of 6 16-29
Chair Grey commented that the proposed project was beautifully designed. He added that reviewing the scope of work and project with staff directly helped him alleviate his concerns. He expressed concern regarding the view from Monterey Avenue, project phasing, and parking lot visibility.

Mr. DePalatis addressed Chair Grey's concerns about the area in question, explaining the existing condition was temporary. He added that the final landscape design could not be determined in the areas outside of the project boundaries until future projects were proposed.

Public Comments
Salvador Amesquita, representing the Western States Regional Council of Carpenters Union, urged the City to require that the project utilize contractors paying a living wage and utilize state certified apprenticeship programs.

MOVED/SECONDED BY BRYANT/CHANTER TO RECOMMEND THAT THE CITY COUNCIL:

A. FIND PRELIMINARY DEVELOPMENT PLAN CASE NO. PDP23-0005 TO BE EXEMPT

FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) PURSUANT TO CEQA GUIDELINES SECTIONS 15162 (SUBSEQUENT EIRS AND NEGATIVE DECLARATIONS); AND
B. APPROVE PRELIMINARY DEVELOPMENT PLAN CASE NO. PDP23-0005,

SUBJECT TO THE CONDITIONS OF APPROVAL AND BASED ON THE CONTENT AND FINDINGS IN THE STAFF REPORT.

MOTION CARRIED 5/0.

3. Environmental Assessment Case No. EA22-0017 and Major Modification Case No.

MOD22-0049 - Westar New Retail Pad Building. Applicant: Connor Best of Westar Associates. Consideration to demolish a portion of a parking lot and construct a new 4,500 square-foot retail pad building in an existing shopping center anchored by Gelson's Market.

The proposed building will be located on a 1.61-acre parcel along the west side of Bob Hope Drive, approximately 375 feet south of the Bob Hope Drive and Gerald Ford Drive intersection. This request also includes related landscaping and site improvements. The subject property is located at 36101 Bob Hope Drive, Rancho Mirage CA 92270 (APN: 674- 600-003).

A Consider recommending that the City Council find Major Modification Case No. MOD22- 0049 to be exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15332 (In-fill Development Projects).

B. Consider recommending that the City Council approve Major Modification Case No.

MOD22-0049, subject to the conditions of approval and based on the content and findings in the staff report.

Joy Tsai, Senior Planner, presented the staff report.

Commissioner Comments
DRAFT 11/30/2023 Special Planning Commission Meeting Minutes Page 4 of 6 16-30
Commissioner Chanter commented that incorporating additional space for retail and office was good, as it would encourage more foot traffic throughout the shopping center and help the retailers.

Commissioner Curran noted he had no issues with the proposed project. He commented that additional amenities would help support the community and Rancho Mirage residents.

Commissioner Agostini spoke in favor of having additional amenities in Rancho Mirage. He noted that the neighborhood shopping center was centrally located and he liked the idea of bringing in new restaurants or retailers to the center.

Commissioner Bryant commended the property owner for having one of the nicest centers in the community . He asked staff if there had been any discussion with Southern California Edison about undergrounding the existing power lines.

Isaiah Hagerman, City Manager, reported that the subject power lines would be undergrounded as part of the Catino project.

Commissioner Bryant commented on the proposed building setback from Bob Hope Drive and made recommendations regarding the landscaping that could go in once the power lines were underground. He spoke regarding parking requirements and asked if the proposed project met the City's parking codes.

Ms. Tsai responded that the applicant has agreed to add additional architectural articulation, such as glazing, on the east elevation facing Bob Hope Drive. She noted that the parking study covered the entire shopping center. She explained that the parking study was completed by traffic engineers and peer reviewed by the City's on-call consultant. She clarified that the parking assessment was based on the center at full occupancy and peak hours, and utilized multiple methodologies. She concluded by noting that the City's on-call consultant agreed with the parking study conclusion that the proposed parking supply was sufficient.

Chair Grey commented that he believed that there was adequate parking for the entire center; however, he expressed concern .about vehicle and pedestrian circulation. He asked what the rationalization was for the placement of the new building pad in the lower corner of the center, as opposed to along the Gerald Ford Drive boundary, between Chase Bank and O'Caine's restaurant buildings.

Connor Best of Westar Associates, property owner representative, responded that electric vehicle chargers would be installed at the Gerald Ford boundary and there was adequate parking for the new building at the proposed location.

Public Comments - None.

MOVED/SECONDED BY AGOSTINI/CURRAN TO RECOMMEND THAT THE CITY COUNCIL:

A. FIND MAJOR MODIFICATION CASE NO. MOD22-0049 TO BE EXEMPT FROM THE

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) PURSUANT TO CEQA GUIDELINES SECTION 15332 (IN-FILL DEVELOPMENT PROJECTS); AND DRAFT 11/30/2023 Special Planning Commission Meeting Minutes Page 5 of 6 16-31
B. APPROVE MAJOR MODIFICATION CASE NO. MOD22-0049, SUBJECT TO THE

CONDITIONS OF APPROVAL AND BASED ON THE CONTENT AND FINDINGS IN THE STAFF REPORT.

MOTION CARRIED 5/0.

ADJOURNMENT
With no further business to consider, the Planning Commission meeting was adjourned at 3:00 P.M.

Prepared by: Deanna Mendoza
Development Services Technician
Date Approved by Planning Commission:

DRAFT 11/30/2023 Special Planning Commission Meeting Minutes Page 6 of 6 16-32
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SHEET INDEX: ATTACHMENT 6
01 Overall Site Plan -
Vehicular Circulation &ADA Pedestrian Path of Travel
02 Enlarged Site Plan
03 Floor Plan - Roof Plan, Trash Enclosure & Sight Line Study
04 Color Elevations & Sections
05 Photo Simulations
06 Color Rendering
07 Photometric Plan
08 Landscape Concept Plan
09 Preliminary and Utility Grading Plan
ADDRESS:

APN#
PROJECT CASE NUMBERS:
36101 BOB HOPE DRIVE
RANCHO MIRAGE, CA 92270
674-600-003
ENVIRONMENTALASSESSMENTCASE NO.
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THE STAFF REPORT FOR AGENDA
ITEM NO. 17 (PACIFIC WEST DDA)

WILL BE PROVIDED UNDER

SEPARATE COVER

17-1
AGE NDA ITEM #

STAFF REPORT
TO: Rancho Mirage Housing Authority Board DATE: December 21, 2023 Chai r and Members
FROM: Marcus J. Aleman II, Housing Manager
SUBJECT: Approval of Disposition and Development Agreement with National Community Renaissance of California and USA Properties Fund Regarding Disposition of Housing Authority Property for Affordable Housing

SPECIFIC REQUEST OR RECOMMENDATION
That
the Housing Authority Board adopt Resolution No. 2023- HA-(Next-in-Order) and execute a disposition and development agreement (“DDA”) with accompanying deeds for the disposition of Parcel A -2 of Assessor’s Parcel Number 685- 090-011 for the development of multi-family affordable housing with National Community Renaissance of California and USA Properties Fund. in accordance with the terms of the DDA subject to final review and approval of Executive Director and General Counsel.

JUSTIFICATION OR INFORMATION

BACKGRO
UND
On August 28, 2023, the Rancho Mirage Housing Authority released a Request for Qualifications (“RFQ”) for the development of at least 200 multi-family affordable housing units on a 10- acre parcel of land on Housing Element Inventory Site B. Site B is an approximately 53.76-acre parcel of land zoned for 28+/ - acres of park land and 25+/ - acres of high density residential with an Affordable Housing Overlay. This Site was selected for the RFQ due to its California Tax Credit Allocation Committee (“CTCAC”) and California Department of Housing and Community Development’s (“HCD”) high resource designation, which makes it competitive in terms of scoring for critical State funding. The deadline for RFQ submission was October 27, 2023. The Housing Authority received 6 responses for review.

During the review process City Staff was made aware that the 2024 CTCAC/HCD Draft Opportunity Maps were made available in late October and that the designation for various sites throughout the City and Coachella Valley would be changed from high resource to moderate resource designations. This change in designation strongly impacts the potential for State funding sources which makes affordable housing development for this site virtually impossible as of January 1, 2024. To help ensure the development of affordable housing, City Staff determined that developing the entire 25+/ - acres and 18-1
DATE: December 21, 2023 Page 2 of 3
National Community Renaissance of California & USA Properties Fund

JUSTIFICATION OR INFORMATION CONTINUED

AGENDA ITEM #

entering into disposition and development agreements (“DDA”) to lock in the high resource designation will give the Housing Authority and selected respondents the greatest opportunity for the development of affordable housing.

On November 21, 2023 , the Housing Authority Board authorized staff and the general counsel to negotiate draft disposition and development agreements with accompanying deeds for the purpose of establishing site control for the development of affordable housing on Housing Element Inventory Site B with Pacific West Communities Inc, , National Community Renaissance of California and USA Properties Fund, and Blieu LLC, for future consideration by the Housing Authority Board before the end of the calendar year.

Given authorization, staff and general counsel began negotiating a draft disposition and development agreement with National Community Renaissance of California and USA Properties Fund. Both parties have collaboratively worked toward producing a draft DDA that is suitable to all involved and provides the best opportunity to achieve the development of a minimum of 150 multi-family affordable housing units.

Simultaneously, staff worked with consultant, Michael Baker International, to map and record the new parcels of the high- density residential portion of Assessor’s Parcel Number 685-090-011. The site being considered is the 5-acre parcel found at the eastern center portion of the larger parcel now known as parcel A-2.

18-2
DATE: December 21, 2023 Page 3 of 3
National Community Renaissance of California & USA Properties Fund

JUSTIFICATION OR INFORMATION CONTINUED

AGENDA ITEM #

SPECIFIC REQUEST OR RECOMMENDATION

That the Housing Authority Board Approve Resolution No. 2023-HA-[Next In Order] and execute a disposition and development agreement (“DDA”) with accompanying deeds for the disposition of Parcel A -2 of Assessor’s Parcel Number 685- 090-011 for the development of multi-family affordable housing with National Community Renaissance of California and USA Properties Fund. in accordance with the terms of the DDA subject to final review and approval of Executive Director and General Counsel.

ENVIRONMENTAL DETERMINATION

This subject request is exempt from environmental review pursuant to CEQA Guidelines Section 15312 (Surplus Government Property Sales) and 15061(b)(3), because (1) the proposed action is a sale of surplus government property, and (2) approval of the action does not have the potential for causing significant effect on the environment, and it can be seen with certainty there is no possibility that the activity in question may have a significant effect on the environment. Further, any subsequent actions subject to CEQA will be subject to future environmental review in accordance with CEQA and CEQA Guidelines.

ATTACHMENT(S)

1. Public Hearing Notice

2. Resolution

18-3

ATTACHMENT 1

PUBLIC HEARING NOTICE

(SEE ATTACHED)

18-4
Rancho Mirage Housing Authority
69-825 Highway 111
Rancho Mirage, CA 92270
Phone 760/328-2266

P U B L I C H E A R I N G N O T I C E

MEETING OF THE

RANCHO MIRAGE CITY COUNCIL

ACTING AS

THE HOUSING AUTHORITY BOARD

Thursday, December 21, 2023 – 1:00 p.m.

Disposition and Development Agreement- National CORE and USA Properties

Request: Consideration of a Disposition and Development Agreement regarding disposition of Housing Authority property for affordable housing

Location: Approximately 5 acres within larger parcel having Assessor Parcel Number 685-090-011, generally located south/southeast of Monterey Marketplace Shopping Center at Dinah Shore Drive and Monterey Avenue, in Rancho Mirage, CA (the “Subject Property”).

NOTICE IS HEREBY GIVEN that a Public Hearing will be held before the City Council acting as the Housing Authority Board pursuant to California Health and Safety Code Section 34312.3 regarding a Disposition and Development Agreement (“DDA”) proposing to dispose of the Subject Property to National CORE and USA Properties, subject to the terms and conditions of a DDA, including the development of affordable housing.

The action is exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15312 (Surplus Government Property Sales) and 15061(b)(3), because (1) the proposed action is a sale of surplus government property, and (2) approval of the action does not have the potential for causing significant effect on the environment, and it can be seen with certainty there is no possibility that the activity in question may have a significant effect on the environment. Further, any subsequ ent actions subject to CEQA will be subject to future environmental review in accordance with CEQA and CEQA Guidelines.

The Public Hearing will be held on Thursday, December 21, 202 3, at 1:00 p.m., in the Council Chamber, 69- 825 Highway 111, Rancho Mirage, California, at which time and place pertinent testimony will be heard. The file, including all environmental information, is available for public inspection at City Hall, Monday through Friday, between 8 a.m. and 5:00 p.m.

18-5
~ CITY OF RANCHO MIRAGE
Disposition and Development Agreement- National CORE and USA Properties December 21, 2023

Written testimony may be submitted to the Housing Authority Board Secretary via email to [email protected], or mailed to Rancho Mirage Housing Authority Board, ATTN: Housing Authority Board Secretary, 69-825 Highway 111, Rancho Mirage, CA 92270. Written testimony must be received no later than 10:00 a.m. on the day of the meeting to be considered by the City Council.

GOVERNMENT CODE § 65009 NOTICE: If you challenge this proposed activity in court, you may be limited to raising only those issues you or someone else raised at the Public Hearing described in this notice, or in written correspondence delivered to the City Council sufficiently prior to the Public Hearing to enable its consideration by them.

V
ICINITY MAP – NOT TO SCALE

18-6
] F ,~LIJJ l --
SITE

R ROGERS RD

ATTACHMENT 2

RESOLUTION

(SEE ATTACHED)

18-7
1 RESOLUTION NO. 2023-HA-____

A RESOLUTION OF THE RANCHO MIRAGE CITY COUNCIL ACTING AS THE HO

USING AUTHORITY BOARD APPROVING THE DISPOSITION AND

DEVELOPMENT AGREEMENT WITH N ATIONAL COMMUNITY RENAISSANCE OF

CALIFORNIA AND USA PROPERTIES FUND AND FINDING THE ACTION EXEMPT

FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT

W HEREAS , on or about August 28, 2023, the City issued a Request for Statement of Qualifications for Multi- Family Affordable Housing Development, with subsequent addenda, seeking qualified, competent, knowledgeable and experienc ed entities to develop multi -family affordable housing projects on certain real proper ty located in the City of Rancho Mirage; and

WHEREAS, staff was made aware that the 2024 CTCAC/HCD Draft Opportunity Maps identify that the Subject Property would be changed from high resource to moderate resource designations; strongly impacting the potential for State funding sources, which makes affordable housing development on the S ubject Property virtually impossible as of January 1, 2024; and

WHEREAS, on November 21, 2023, the City Council acting as the Housing Authority Board, in relevant part, directed staff and its general counsel to negotiate draft disposition and development agreement for the purpose of establishing site control for the development of affordable housing with National Community Renaissance of California and USA Properties Fund prior to January 1, 2024, to help ensure the development of affordable housing on the Subject Property; and

WHEREAS, in accordance with California Health and Safety Code Section 34312.3, the Rancho Mirage Housing Authority (the “Housing Authority”) desires to sell the “Subject Pro perty” to Developer , subject to the terms and conditions of the Disposition and Development Agreement (the “ DDA”), attached hereto and incorporated herein by this reference , with sale proceeds to be used to assist housing for units for persons of low income; and

WHEREAS, the transfer of the Subject Property is for the common benefit and serves a public purpose in that it provides residents of the City affordable housing to address California’s affordable housing supply crisis, provides for public improvements, creates temporary construction jobs for workers in connection with the affordable housing project, creates full -time permanent jobs, and satisfies the City’s Regional Housing Needs Allocation, as set forth in the City’s Housing Element that w as duly certified by the California Department of Housing and Community Development for the 2021-2029 Planning period, which consisted of 430 Very Low units, 318 Low units, and 328 Moderate units; and

WHEREAS, public hearing notice of the Housing Authority’s consideration of the DDA was published twice in the Desert Sun, on December 6, 2023 and December 13, 2023; and
18-8
2 WHEREAS, in accordance with Health and Safety Code Section 34312.3, the Housing Authority held a public hearing prior to the disposition of the Subject Property.

NOW, THEREFORE, THE RANCHO MIRAGE HOUSING AUTHORITY, DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:

SECTION 1.

RECITALS AND INCORPORATION BY REFERENCE

The recitals set forth above are true and correct and any and all documents referenced herein are hereby incorporated herein by this reference.

SECTION 2.

APPROVE DISPOSITION AND DEVELOPMENT

AGREEMENT

T
he Housing Authority hereby approves the Disposition and Development Agreement with National Community Renaissance of California and USA Properties Fund, dated November 21, 2023 (the “ DDA”), thereby approving the disposition of Housing Authority owned property (the “Subject Property”), as described in more detail in the DDA , subject to the terms and conditions set forth therein, including but not limited to, the construction of a multi-family affordable housing project on said property.

SECTION 3
. ENVIRONMENTAL REVIEW

The Housing Authority finds this action exempt from California Environmental Quality Act, California Public Resources Code §21000- §21177, as amended ("CEQA"), including CEQA Guidelines S ection 15312 (Surplus Government Property Sales), and 15061(b)(3), because (1) the proposed action is a sale of surplus government property, (2) and (3) approval of the action does not have the potential for causing significant effect on the environment, and it can be seen with certainty there is no possibility that the activity in question may have a significant effect on the environment. Further, any subsequent actions subject to CEQA will be subject to future environmental review in accordance with CEQA and CEQA Guidelines.

SECTION 4. GENERAL PLAN CONSISTENCY

The Housing Authority finds that the dis position is consistent with the City ’s General Plan.

SE
CTION 5. SEVERABILITY.

That the Housing A uthority declares that, should any provision, section, paragraph, sentence or word of this Resolution be rendered or declared invalid by any final court action in a court of competent jurisdiction or by reason of any preemptive legislation, the remaining provisions, sections, paragraphs, sentences or words of this Resolution as hereby adopted shall remain in full force and effect.

18-9
3 SECTION 6. REPEAL OF CONFLICTING PROVISIONS.

That all the provisions heretofore adopted by the Housing Author ity that are in conflict with the provisions of this Resolution are hereby repealed.

SECTION
7 . EFFECTIVE DATE.

That this Resolution shall take effect immediately upon its adoption.

SEC
TION 8. CERTIFICATION.

That the Housing Authority Secretary shall certify to the passage and adoption of this Resolution and enter it into the book of original resolutions.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

18-10
4 PASSED, APPROVED AND ADOPTED this 21st day of December, 2023.

RANCHO MIRAGE HOUSING AUTHORITY

_________________________________
Steve Downs, Board Chair

ATTEST:

____________________________________
Kristie Ramos, Secretary

APPROVED AS TO FORM:

____________________________________
Colin Kirkpatrick, General Counsel

18-11
5 EXHIBIT “A
”

DISPOSITION AND DEVELOPMENT AGREEMENT

(SEE ATTACHED)
18-12

AFFORDABLE HOUSING

DISPOSITION

AND DEVELOPMENT AGREEMENT

among

THE RANCHO MIRAGE HOUSING AUTHORITY,

NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA,

AND

USA PROPERTIES FUND
18-13
65318.50016\34700316.2

TABLE OF CONTENTS

Page
i

ARTICLE I. DEFINITIONS; REPRESENTATIONS AND WARRANTIES; EFFECTIVE DATE.............................................................................................. 2

1.1 Definitions. ................................................................................................. 2

1.2 City Representations and Warranties. .................................................. 12 ARTICLE II. PROPERTY DISPOSITION ............................................................................. 16

2.1 Purchase and Sale. .................................................................................. 16

2.2 Payment of Purchase Price. ................................................................... 16

2.3 Eminent Domain . .................................................................................... 17

2.4 Title Approval. ........................................................................................ 17

2.5 Developer Investigations. ....................................................................... 18

2.6 Developer to Obtain all Project Entitlements. ..................................... 20

2.7 Delivery of Property Free of Occupants. .............................................. 22

2.8 Project Marketing Plan. ......................................................................... 22 ARTICLE III. ESCROW INSTRUCTIONS ........................................................................... 23

3.1 Opening of Escrow. ................................................................................. 23

3.2 Conditions to Close of Escrow. .............................................................. 23

3.3 Developer’s Escrow Deposits. ................................................................ 26

3.4 Authority’s Escrow Deposits. ................................................................. 27

3.5 Closing Procedure. .................................................................................. 27

3.6 Close of Escrow. ...................................................................................... 28

3.7 Recordation and Distribution of Documents. ....................................... 28

3.8 Escrow Closing Costs, Taxes and Title Policy Premium. .................. 287

3.9 Escrow Cancellation Charges. ............................................................... 29

3.10 Escrow Cancellation. .............................................................................. 29

3.11 Report to IRS........................................................................................... 29 ARTICLE IV. PROJECT DEVELOPMENT .......................................................................... 30

4.1 Developer Covenant to Undertake Project. .......................................... 30

4.2 Construction Contract; Construction Schedule .................................. 30

4.3 Construction Start and Completion of Project. ................................... 30

4.4 Compliance with Laws. .......................................................................... 31

4.5 Schedule of Performance. ....................................................................... 31

4.6 Developer Attendance at City Board Meetings. ................................... 31

4.7 City’s Right to Inspect Project and Property. ...................................... 31

4.8 Cost of Construction. .............................................................................. 32

4.9 Prevailing Wages . .................................................................................... 32

4.10 Efforts to Hire Local Workers ............................................................... 31

4.11 Certificate of Completion. ...................................................................... 33

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65318.50016\34700316.2

TABLE OF CONTENTS

Page
ii

ARTICLE V. DEVELOPER COVENANTS ........................................................................... 34

5.1 Obligation to Refrain from Discrimination. ......................................... 34

5.2 Form of Non-Discrimination and Non-Segregation Clauses. ............. 34

5.3 Environmental Indemnity of the City by the Developer. .................... 35

5.4 Insurance. ................................................................................................ 36 ARTICLE VI. PROJECT FINANCING .................................................................................. 40

6.1 Project Financing. ................................................................................... 40

6.2 Project Loan by City to Developer ....................................................... 39

6.3 Project Budget. ........................................................................................ 41

6.4 Only Permitted Exceptions. ................................................................... 41

6.5 City Right to Discharge Prohibited Encumbrances. ........................... 42

6.6 Rights of Lender and City Regarding Permitted Security Instruments. ............................................................................................. 42 ARTICLE VII. DEFAULTS, REMEDIES AND TERMINATION ...................................... 44

7.1 Defaults - General. .................................................................................. 44

7.2 Developer's Election re: Specific Enforcement of Agreement or Waiver of Right to Specific Performance and Limitation on Recovery of Deamages Prior to Close of Escrow. ................................ 45

7.3 Legal Actions. .......................................................................................... 46

7.4 Rights and Remedies are Cumulative. .................................................. 48

7.5 Developer Indemnification of the City. ................................................. 48 ARTICLE VIII. GENERAL PROVISIONS. ........................................................................... 49

8.1 Incorporation of Recitals. ....................................................................... 49

8.2 Restrictions on Transfers. ...................................................................... 49

8.3 Notices, Demands and Communications Between the Parties. ........... 50

8.4 Conflict of Interest. ................................................................................. 51

8.5 Warranty Against Payment of Consideration for Agreement. ........... 51

8.6 Non-liability of City, Officials and Employees. .................................... 51

8.7 Unavoidable Delay; Extension of Time of Performance. .................... 51

8.8 Inspection of Books and Records. ......................................................... 52

8.9 Real Estate Commissions. ...................................................................... 52

8.10 Binding on Successors and Assigns. ...................................................... 52

8.11 Entire Agreement. ................................................................................... 52

8.12 Execution of this Agreement. ................................................................. 53

8.13 Survival of Indemnity Obligations. ....................................................... 53

8.14 Time Declared to be of the Essence. ...................................................... 53

8.15 Approvals . ................................................................................................ 53

8.16 Further Assurances. ................................................................................ 53

8.17 City Approvals and Actions. .................................................................. 53

8.18 Investor Limited Partner Provisions. .................................................... 54 18-15
65318.50016\34700316.2

TABLE OF CONTENTS

Page
iii

Exhibit A Legal Description
Exhibit B Scope of Development
Exhibit C Schedule of Performance
Exhibit D Form of Quitclaim Deed
Exhibit E Form of Notice of Agreement
Exhibit F Form of Official Action of Developer
Exhibit G Form of Certificate of Completion
Exhibit H Form of Regulatory Agreement
Exhibit I Form of Promissory Note – Land Loan
Exhibit J Form of Deed of Trust – Land Loan

18-16
163\40\2463767.15

TABLE OF CONTENTS

Page

This AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT (“Agreement”) is dated as of December 21, 2023 (“Date of Agreement”), for reference purposes only, and is entered into by and among the RANCHO MIRAGE HOUSING AUTHORITY, a public body located in the County of Riverside, State of California (“Housing Authority ”), NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit public benefit corporation (“NCRC”), and USA PROPERTIES FUND, a California Corporation ( “USA Properties” and, together with NCRC, individually and collectively, as the context implies, “Developer”). The Housing Authority and the Developer are sometimes referred to in this Agreement, each individually, as a “Party,” or collectively, as the “Parties.”

RECITALS
This Agreement is entered into with reference to the following recitals of fact (“Recitals”) that City and Developer believe to be true as of the Effective Date of this Agreement:

A. T he Housing Authority is the owner of that cert ain real property located within the Northeast Quarter of Section 30, Township 4 South, Range 6 East in Rancho Mirage, CA, approximately 5 acres in size, more specifically described in Exhibit A attached hereto and incorporated herein by this reference (“Property”).

B. On or about August 28, 2023, the City issued a Request for Statement of Qualifications for Multi-Family Affordable Housing Development, with subsequent addenda, seeking qualified, competent, knowledgeable and experienced entities to develop multi -family af fordable housing projects on the Subject Property.

C. Consistent with the City of Rancho Mirage General Plan (the "General Plan") and the current zoning designation for the Subject Property, the Parties desire to cause the construction and development of the Subject Property for the primary purposes of providing multi -family affordable rental housing development. The development of the Project shall include the construction of a minimum of 150 units; comprised generally of 30% very low income (30% to 50% AMI) and 70% lower income (50% to 80% AMI), with an average of 60% AMI for the restricted units; plus/in addition to one unit set aside for a property manager. To accommodate the number of units sought, Developer may seek a density bonus and other incentives as allowed under California Government Code 65915, which may include, but is not limited to, a reduction in the number of required parking spaces and a request for the building heights to be up to three-stories.

D. The Housing Authority intends to transfer to the Developer: (1) the fee interest in the Subject Property subject to the terms and conditions of this Agreement and the Regulatory Agreement.
18-17

1 E. Developer intends to finance the costs of the Project with sources that could include and are not limited to the Low Income Housing Tax Credit (LIHTC) program as administered by the California Tax Credit Allocation Committee , the Qualified Residential Rental Project Program (tax-exempt bonds) administered by the California Debt Limit Allocation Committee , and other State and local sources as applicable.

Financing sources will be reflected in the Financing Plan.

F. The Housing Authority has determined that Developer has the necessary expertise, skill and ability to carry out the commitments set forth in this Agreement and that this Agreement is in the best interests, and will materially contribute to the Housing Authority's economic development goals by: (1) creating temporary construction jobs for workers in connection with the construction of the Improvements; (2) creating full - time permanent jobs ; (3) developing and continually operating an affordable housing development, providing affordable housing to City residents; and (4) helping to satisfy the City’s Regional Housing Needs Allocation, as set forth in the City’s Housing Element that was duly certified by the California Department of Housing and Community Development for the 2021- 2029 Planning period, which consisted of 430 Very Low units, 318 Low units, and 328 Moderate units.

G. The Housing Authority finds and determines that the sale of the Property is exempt from California Environmental Quality Act, California Public Resources Code §21000- §21177, as amended ("CEQA"), including CEQA Guidelines Section 15312 (Surplus Government Property Sales), and 15061(b)(3), because (1) the proposed action is a sale of surplus government property, and (2) approval of the action does not have the potential for causing significant effect on the environment, and it can be seen with certainty there is no possibility that the activity in question may have a significant effect on the environment. Further, any subsequent actions subject to CEQA will be subject to future environmental review in accordance with CEQA and CEQA Guidelines.

NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated herein by this reference, the mutual promises set forth in this Agreement and other good and valuable consideration, the receipt and sufficiency of which is acknowledged by Housing Authority and Developer, the Parties agree as follows:
18-18
I

2 TERMS AND CONDITIONS

DEFINITIONS; REPRESENTATIONS AND WARRANTIES;

EFFECTIVE DATE
I.1 Definitions. All initially capitalized terms in this Agreement, including in the Recitals above, that are not otherwise defined in this Agreement shall have the following meanings:

I.1.1 “Additional Insureds ” has the meaning ascribed to such term in Section V.4.

I.1.2 “Affiliate” means and refers to any person or entity, directly or indirectly Controlling or Controlled by or under common Control with the applicable person or entity, whether by direct or indirect ownership of equity interests, by contract or otherwise.

I.1.3 “Agreement” means this Affordable Housing Disposition and Development Agreement.

I.1.4 “Housing Authority ” means the Rancho Mirage Housing Authority, a California public body.

I.1.5 “Housing Authority’s Title Notice Response” means the written response of the Housing Authority to the Developer’s Title Notice, in which the Housing Authority either (a) elects to cause the removal from the Preliminary Report of any matters shown in Schedule B of the Preliminary Report as exceptions to coverage under the proposed Title Policy that were objected to in the Developer’s Title Notice, or (b) elects not to cause the removal of such objected- to items.

I.1.6 “CEQA” means the California Environmental Quality Act, Public R
esources Code Sections 21000, et seq.

I.1.7 “Certificate of Completion ” means the written certification of Housing Authority that the construction of the Project has been completed in compliance with the terms and conditions of this Agreement, substantially in the form of Exhibit G attached to this Agreement.

I.1.8 “City” m eans the City of Rancho Mirage, a charter city and recognized for certain purposes as a political subdivision of the State of California.

I.1.9 “Housing Authority Requirements” has the meaning ascribed to the term in Section 2.6.2.

I.1.10 “Close of Escrow” or “Closing” means the recording of the Quitclaim Deed for the Property in the official records of the Recorder of the County, and completion of each of the actions set forth in ARTICLE III by the Escrow Holder for the Housing Authority to sell the Property to the Developer and the Developer to purchase the Property from the Housing Authority. 18-19
ARTICLE I.

3 I.1.11 “Completion of Construction” when used in this Agreement means, unless otherwise indicated, the issuance of a Certificate of Completion confirming that the final certificate of occupancy for the Project, based on the plans submitted by the Developer to the Housing Authority, has been issued.

I.1.12 “Construction Financing” means one or more loans that Developer shall obtain from one or more Institutional Lenders, the proceeds of which are to be used and applied to pay the reasonable costs of obtaining such loan(s) and either: (a) pay Project Costs; or (b) pay the cost to refinance only the outstanding amount owed under a prior loan obtained by Developer to finance the amount described in subsection (a) of this Section I.1.12 (without any other amounts).

Such loan(s) shall provide for normal and customary disbursement controls for the payment of Project Costs and normal and customary fees and expenses for loan(s) of similar size and purpose.

The Construction Financing is set forth in the Project Budget.

I.1.13 “Construction Financing Documents” means the various documents and instruments made by and between Developer and one or more Institutional Lenders that evidence or perfect the Construction Financing or the security for repayment of the Construction Financing, including any associated Security Instrument.

I.1.14 “Construction Plans” means all construction documentation upon which Developer, and Developer’s several contractors, shall rely in building each and every part of the improvements and shall include, but not necessarily be limited to, final architectural drawings, landscaping plans and specifications, hydrology and drainage plans, grading plans, final elevations, building plans and specifications (also known as “working drawings”) .

I.1.15 “Control” means and refers to possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person or entity, whether by ownership of equity interests, by contract or otherwise.

I.1.16 “Controlling” and “Controlled” mean and refer to exercising or having Control.

I.1.17 “County” means the County of Riverside, California.

I.1.18 “Developer” means National Community Renaissance of California, a California nonprofit public benefit corporation, USA Properties, and the successors and assigns of each that are permitted by this Agreement.

I.1.19 “Developer’s Title Notice” means a written notice from the Developer to the Housing Authority indicating the Developer’s objection to specific matters shown in Schedule B of the Preliminary Report as exceptions to coverage under the proposed Title Policy for the Property, describing in suitable detail the actions that the Developer reasonably beli eves are indicated to cure or correct each of the Developer’s objections.

4 geotechnical suitability of the Property, as deemed appropriate in the reasonable discretion of the Developer, all at the sole cost and expense of the Developer.

I.1.21 “Due Diligence Investigation Rejection Notice” means a written notice of the Developer delivered to the Housing Authority and the Escrow Holder prior to the end of the Due Diligence Period, indicating the Developer’s rejection of the condition of the Property and refusal to accept a conveyance of fee title to the Property, describing in reasonable detail the actions that the Developer reasonably believes are indicated to allow the Developer to accept the condition of the Property.

I.1.22 “Due Diligence Period” means the date commencing on the Effective Date and ending at 5:00 p.m. on the 120
th day following the Effective Date.

I.1.23 “Effective Date” has the meaning ascribed to the term in Section I.2.2.

I.1.24 “Environmental Claims” has the meaning ascribed to the term in Section V.3.

I.1.25 “Environmental Laws” means all federal, state, local, or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, or requirements of any government authority regulating, relating to, or imposing liability of standards of conduct concerning any hazardous substance (as later defined), or pertaining to occupational health or industrial hygiene (and only to the extent that the occupational health or industrial hygiene laws, ordinances, or regulations relate to Hazardous Substances on, under, or about the Property), occupational or environmental conditions on, under, or about the Property, as now or may at any later time be in effect, including without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”) [42 USC Section 9601 et seq.]; the Resource Conservation and Recovery Act of 1976 (“RCRA”) [42 USC Section 6901 et seq.]; the Clean Water Act, also known as the Federal Water Pollution Control Act (“FWPCA”) [33 USC Section 1251 et seq.]; the Toxic Substances Control Act (“TSCA”) [15 USC Section 2601 et seq.]; the Hazardous Materials Transportation Act (“HMTA”) [49 USC Section 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 USC Section 6901 et seq.] the Clean Air Act [42 USC Section 7401 et seq.]; the Safe Drinking Water Act [42 USC Section 300f et seq.]; the Solid Waste Disposal Act [42 USC Section 6901 et seq.]; the Surface Mining Control and Reclamation Act [30 USC Section 101 et seq.] the Emergency Planning and Community Right to Know Act [42 USC Section 11001 et seq.]; the Occupational Safety and Health Act [29 USC Section 655 and 657]; the California Underground Storage of Hazardous Substances Act [California Health & Safety Code Section 25288 et seq.]; the California Hazardous Substances Account Act [California Health & Safety Code Section 25300 et seq.]; the California Safe Drinking Water and Toxic Enfor cement Act [California Health & Safety Code Section 24249.5 et seq.] the Porter-Cologne Water Quality Act [California Water Code Section 13000 et seq.] together with any amendments of or regulations promulgated under the statutes cited above and any other federal, state, or local law, statute, ordinance, or regulation now in effect or later enacted that pertains to occupational health or industrial hygiene, and only to the extent the occupational health or industrial hygiene laws, ordinances, or regulations relate to Hazardous Substances on, under, or about the Property, or the regulation or protection of the environment, including ambient air, soil, soil vapor, groundwater, surface water, or land use.
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5 I.1.26 “Environmental Matters” has the meaning ascribed to the term in Section V.3.

I.1.27 “Escrow” has the meaning ascribed to the term in Section II.1.

I.1.28 “Escrow Closing Date ” means, subject to extension due to Unavoidable Delay, on or before the 5th business day following the Escrow Holder’s receipt of written confirmation from both Housing Authority and Developer of the satisfaction or waiver of all conditions precedent to the Close of Escrow.

I.1.29 “Escrow Holder ” means Fidelity National Title , Attn: Valerie Rapp, Escrow Officer through its office located at 4400 MacArthur Blvd., Suite 200, Newport Beach, CA 92660, or such other escrow holder mutually agreed upon in writing by both Housing Authority and Developer.

I.1.30 “Escrow Opening Date” has the meaning ascribed to the term in Section III.1.

I.1.31 “Event of Default” has the meaning ascribed to the term in Section VII.1.

I.1.32 “Housing Authority Executive Director” means the Executive Director of the Rancho Mirage Housing Authority or his or her designee or successor in function.

I.1.33 “FIRPTA Affidavit” means an affidavit complying with Section 1445 of the United States Internal Revenue Code.

I.1.34 “Governmental Agency” or “Governmental Agencies” means any and all courts, boards, agencies, commissions, offices, or authorities of any nature whatsoever for any governmental unit (federal, state, county, district, municipal, City, or otherwise) whether now or later in existence.

I.1.35 “Governmental Requirements ” means all codes, statutes, ordinances, laws, permits, orders, and any rules and regulations promulgated thereunder of any Governmental Agency.

6 substances designated as a hazardous substance pursuant to 33 USC Section 1321 or listed pursuant to 33 USC Section 1317. Notwithstanding the foregoing, “Hazardous Substances” shall not include such products in quantities as are customarily used in the construction, maintenance, development or management of residential developments or associated buildings and grounds, or typically used in residential activities in a manner generally used in other comparable residential developments, or substances commonly ingested by a significant population living within the Project including, without limitation, alcohol, aspirin, tobacco and saccharine.

I.1.37 “Indemnified Parties ” means Housing Authority and its commissions, agents, attorneys, officers, employees, and authorized representatives.

I.1.38 “Institutional Lender ” means any of the following: (a) a bank (State, Federal or foreign), trust company (in its individual or trust capacity), insurance company, credit union, savings bank (State or Federal), pension, welfare or retirement fund or system, real estate investment trust (or an umbrella partnership or other entity of which a real estate investment trust is the majority owner), Federal or State agency regularly making or guaranteeing mortgage loans, investment bank or a subsidiary of a Fortune 500 company; or (b) any person or entity that is an Affiliate of or is a combination of any one or more of the persons or entities described in subparagraph (a) of this Section ; or (c) a joint powers authority the membership of which is composed of Governmental Agencies; or (d) a Governmental Agency acceptable to the Housing Authority.

I.1.39 “Lender” means the holder of any debt, obligation and Security Instrument and its successors and assigns.

I.1.40 “N
otice of Agreement ” means the notice in the form of Exhibit E to this Agreement to be recorded against the Property at the Close of Escrow to provide constructive record notice of the existence and application of this Agreement to the Property.

I.1.41 “P
arties ” means, collectively, the Housing Authority and the Developer.

I.1.42 “Party” means, individually, the Housing Authority or the Developer, as applicable.

I.1.43 “PCO Statement ” means a preliminary change of ownership statement provided for in California Revenue and Taxation Code Section 480.3.

I.1.44 “Permanent Loan” means any loan that the Developer shall obtain from an Institutional Lender and Subordinate Loan Lender , the proceeds of which are to be used and applied solely to pay: ( a) the reasonable costs of obtaining such loan; ( b) the then current outstanding principal, interest, fees and charges under any Construction Financing; and ( c) any Project Costs then unpaid. A Subordinate Loan recorded at the Close of Escrow may become a Permanent Loan if, according to its terms, it is not to be paid in full when the Construction Financing is paid off. The Permanent Loans are set forth in the Project Budget.

7 Title Policy; ( c) non- delinquent property taxes and assessments; ( d) this Agreement; ( e) the Quitclaim Deed; ( f) the Notice of Agreement; ( g) the Regulatory Agreement; ( h) any Permitted Security Instrument; (k) any agreement restricting occupancy and rents of the Project required by an Institutional Lender or a Subordinate Loan Lender, if any; and ( i) any other document or encumbrance expressly required to be recorded against the Property or the Project pursuant to the terms of this Agreement.

I.1.46 “Permitted Security Instrument” means any Security Instrument that: (a) encumbers only the Property or any interest in the Property; (b) is held by a Lender that is an Institutional Lender, the Housing Authority or another Subordinate Loan Lender, subject to the jurisdiction of the courts of the State, not immune from suit and cannot elect to be immune from suit; and (c) only secures: (i) the repayment of money used to pay or reimburse Project Costs , including, but not limited to, payment of the purchase p rice of the Property ; (ii) a bona fide Permanent Loan; (iii) a bona fide Subordinate Loan; (iv) a bona fide Refinancing; or (v) a delivery assurance fee regarding a Permanent Loan that is refundable to Developer at the close of the Permanent Loan. If the Housing Authority approves a loan structure for the Project where, in order to avoid triggering prevailing wages for the Project, a loan is made to Developer and then is immediately made by Developer to the Project, then a Security Instrument securing such a loan will be deemed a Permitted Security Instrument. Promptly after execution, Developer shall promptly deliver a copy of any Security Instrument to the Authority, with the Lender’s name and notice address.

I.1.47 “Permitted Transfer” means any of the following types of Transfer by Developer, which unless otherwise provided do not require the Housing Authority’s prior written approval and where, except for a Transfer described in subsections .1, .2, .3, .4, .6, .7 and .9 below, the person or entity to which such Transfer is made expressly and unconditionally assumes in a written assignment and assumption agreement between such person or entity, Developer and Housing Authority that is in a form reasonably acceptable to Housing Authority (as evidenced by execution of such assignment and assumption agr eement by the Housing Authority Executive Director), all obligations of Developer under this Agreement:

I.1.47.1 Any Transfer to an Institutional Lender or
Subordinate Loan Lender: (a) pursuant to a Permitted Security Instrument as collateral for bona fide Construction Financing to pay all or any part of the Project Costs; or (b) pursuant to a Permitted Security Instrument as collateral for a bona fide Permanent Loan or bona fide Refinancing.

I.1.47.2 Any Transfer directly resulting from the foreclosure or deed in lieu of foreclosure of a Permitted Security Instrument as permitted under Section VI.6.7.

I.1.47.3 Any Transfer of stock or equity in a Party that does not change management or operational Control of the Project, with no material change in beneficial ownership (with the exception of any conveyance to member(s) of the immediate family(ies) of the transferor(s) or trusts for their benefit), and which constitutes a tax-free transaction under Federal income tax law and California real estate transfer tax. 18-24
I

8 I.1.47.4 The lease of residential apartment units in the Project consistent with the Regulatory Agreement.

I.1.47.5 The Transfer of Developer’s interest in the Property or Developer’s interest hereunder to a limited partnership, the general partner of which is Developer, a nonprofit entity affiliated with Developer, or a limited liability company of which Developer or a nonprofit entity affiliated with Developer is the manager , which limited partnership has been formed to be an entity to receive capital contributions resulting from the syndication of Tax Credits.

I.1.47.6 The Transfer and sale of limited partnership interests in Developer while the Developer is in the form of a limited partnership.

I.1.47.7 In the event that any general partner of the
Developer, while the Developer is in the form of a limited partnership, is removed by the limited partner of such limited partnership for cause following default under applicable provisions of the limited partnership agreement, the Transfer of the general partner interest to a 501(c)(3) tax exempt nonprofit corporation or its Affiliate selected by the limited partner and approved by the Housing Authority, which approval will not be unreasonably withheld, delayed or conditioned.

I.1.47.8 The Transfer of the Project from Developer, while the Developer is in the form of a limited partnership, to one or more of the general partners of the Developer or their Affiliates at the end of the tax credit compliance period for the Project and the grant of an option or right of first refusal to do so contained in or ancillary to the limited partnership agreement.

I.1.47.10 The Transfer of an easement in the Property done in connection with an approved parcel map or approved Plans and Specifications.

I.1.48 “Plans and Specifications” has the meaning ascribed to the term in Section II.6.1
I.1.49 “Preliminary Report ” means a preliminary report issued by the Title Company in contemplation of the issuance of the Title Policy, accompanied by legible copies of all documents listed in Schedule B of the report as exceptions to coverage under the proposed Title Policy. The Parties acknowledge that they may prepare one or more Preliminary Reports for each parcel, or group of parcels, comprising the Property. In such case, all reports, notices, and objection letters which pertain to the Preliminary Report for the entirety of the Property will apply separately to each Preliminary Report associated with a parcel or a group of parcels.

I.1.50 “Project” means the construction and development of the Property as an affordable multi-family rental housing development, including all required or associated on -site and off-site improvements, all hardscape and all landscaping, all as described generally in the 18-25
I

9 Scope of Development, and all to be developed in accordance with the Plans and Specifications to be approved by the Housing Authority in its reasonable discretion and with any conditions imposed by the Housing Authority in its approval of the Plans and Specifications. The primary purposes of the Project shall be to provide multi-family affordable housing development. The development of the Project shall include the construction of a minimum of 150 units; comprised generally of 30% very low income (30% to 50% AMI) and 70% lower income (50% to 80% AMI), with an average of 60% AMI for the restricted units; and one unit set aside for a property manager. To accommodate the number of units sought, Developer may seek a density bonus, incentives to reduce the number of parking spaces, and request for the buildings to be up to three-stories.

I.1.51 “Project Budget” means the Project Costs and anticipated sources of funds to pay the Project Costs as set forth in the Project proforma, which is subject to approval by the Housing Authority Executive Director, as may be modified from time to time pursuant to Section VI.3.

I.1.52 “Project Commencement Date” means no later than the date 30 days after the Escrow Closing Date.

I.1.53 “Project Completion Date” means that date by which a Certificate of Completion must be issued for the Project, as more particularly provided in the Schedule of Performance. The Project Completion Date shall be no later than February 2029.

I.1.54 “Project Costs ” means all of the costs of acquiring the Property and developing, constructing and equipping the Project.

I.1.55 “P
roperty ” means that real property, and all current and future improvements thereon (including, without implied limitation, the Project), legally described in Exhibit A.

I.1.56 “Property Transfer” means and refers to any “change in ownership,” as defined in Revenue and Taxation Code Sections 60, 61(a)- (i), 65(a) and 67, of all or any portion of the Property.

I.1.57 “Purchase Price” means the purchase price for the Property in an amount to be determined by a third-party appraisal, as mutually agreed to among the Parties, as provided in this Agreement.

I.1.58 “Qualifying Units” will have the meaning ascribed thereto in the Regulatory Agreement.

I.1.59 “Qu itclaim Deed ” means a deed substantially in the form of Exhibit D to this Agreement, conveying Housing Authority’s interest in the Property to the Developer.

I.1.60 R ecord ”, “recorded”, “recording” or “recordation” each mean and refer to recordation of the referenced document in the official records of the Recorder of the County of Riverside, California.
18-26

10 I.1.61 Refinancing. Any loan secured by a Permitted Security Instrument that the Developer obtains from an Institutional Lender subsequent to recordation of the Permanent Loan for a loan amount which, when combined with the then balances of all Subordinate Loans encumbering the Property, does not exceed 90% of the appraised value of the Property plus the value of Tax Credits allocated to the Project by TCAC, with said values evidenced by an appraisal or other evidence acceptable to the Housing Authority.

I.1.62 “R egulatory Agreement ” means the Regulatory Agreement and Declaration of Restrictive Covenants, Conditions and Restrictions Restricting the Use of Property for Affordable Housing in substantially the form of Exhibit H attached to this Agreement, which shall be recorded against the Property at the Close of Escrow.

I.1.63 “Schedule of Performance” means the schedule of dates to complete p
erformance of certain critical actions by the Parties pursuant to this Agreement, attached to this Agreement as Exhibit C.

I.1.64 “Scope of Development ” means the detailed description of the Project attached to this Agreement as Exhibit B.

I.1.65 “Security Instrument ” means any security instrument, deed of trust, security deed, contract for deed, deed to secure debt, or other voluntary real property (including leasehold) security instrument(s) or agreement(s) intended to encumber the Property (including leasehold) to provide security for any obligation (including a purchase-money or other promissory note) arising from or relating to financing for the Project, as entered into, renewed, modified, consolidated, increased, decreased, amended, extended, restated, assigned (wholly or partially), collaterally assigned, or supplemented from time to time, unless and until paid, satisfied, and discharged of record. If two or more such security instruments are consolidated or restated as a single lien or held by the same Lender (as applicable), then all such security instruments so consolidated or restated shall constitute a single Security Instrument. A participation interest in a security instrument (or partial assignment of the secured loan) does not itself constitute a Security Instrument.

I.1.66 “Senior” means, referring to multiple Security Instruments, the Security Instrument that has the greatest priority in lien of the same type. Where Senior is used as a comparative term as against any specified Security Instrument, such term refers to any Security Instrument of the same type that is prior in interest to the other specified Security Instrument. If only one Security Instrument of a particular type exists, then it shall be deemed the Senior Security Instrument of such type.

I.1.67 “Senior Loan” has the meaning as set forth in Section II.2.4.

I.1.68 “State” means the State of California.

I.1.69 “Subordinate Loan” means any loan shown in the Project Budget or through revisions to the Project Budget approved by the Housing Authority Executive Director pursuant to Section 6.2, and which is secured by a Permitted Security Instrument. 18-27

11 I.1.70 “Tax Credit Equity ” means the equity investment toward the cost of development and construction of the Project contributed to the Developer (when in the form of a limited partnership) by the Tax Credit Investor, in the amount set forth in the Project Budget.

I.1.71 “Tax Credit Investor” means the limited partner in Developer (when in the form of a limited partnership) that provides the Tax Credit Equity for the development and construction of the Project.

I.1.72 “Tax Credits ” means an allocation from TCAC of federal low income housing tax credits to finance a portion of the Project Costs, all in accordance with Section 42 of the Internal Revenue Code of 1986, as amended, all associated Internal Revenue Service regulations and all associated TCAC regulations.

I.1.73 “TCAC” means the California Tax Credit Allocation Committee or successor in function.

I.1.74 “TCAC Regulatory Agreement” means the extended low income housing commitment within the meaning of Internal Revenue Code Section 42(h)(6)(B) in favor of TCAC, required by TCAC to be recorded against the Property in connection with the award of Tax Credits to the Project.

I.1.75 “Title Company” means Fidelity National Title, Attn: Andrew Margo, VP, Title Officer through its office located at 4210 Riverside, CA 92505, or such other title company mutually agreed upon in writing by both Housing Authority and Developer I.1.76 “Title Policy” means an ALTA owner ’s standard coverage policy of title insurance issued by the Title Company, with coverage in the full amount of the Purchase Price and insuring Developer’s fee title to the Property, subject only to the Permitted Exceptions and, as applicable, an ALTA extended lender’s policy of title insurance, insuring against any loss of priority for sitework liens, among other coverages, in the liability amount of the Promissory Note – Land Loan given for the Purchase Price . If requested by Housing Authority, Developer shall provide to Housing Authority, at Developer’s expense, a foundation endorsement to the title policy upon the completion of each foundation for the improvements, showing no encroachments, and upon completion an endorse ment which insures the lien -free completion of the improvements. Specifically, Developer shall provide to City the following title insurance endorsements: 8.2, 100, 116, 102.5, 102.7, 111.5, 101.2, 122(15), or their equivalent). Developer shall pay for the Title Policy.

I.1.77 “Transfer” means any of the following:

I.1.77.1 Any assignment, conveyance, grant, hypothecation, mortgage, pledge, sale, or other transfer, whether direct or indirect, of all or any part of such property, right or obligation, or of any legal, beneficial, or equitable interest or estate in such property, right or obligation or any part of it (including the grant of any easement, or non-monetary lien or encumbrance); or
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12 I.1.77.2 Any conversion, exchange, issuance, modification, reallocation, sale, or other transfer of any direct or indirect equity interest(s) in the owner of such property, right or obligation by the holders of such equity interest(s); or I.1.77.3 Any merger, consolidation, sale, or lease of all or substantially all of the assets of the Developer or a series of such sales, assignments and the like that, in the aggregate, result in a disposition of more than a 49% interest of all or substantially all of the assets of the Developer; or
I.1.77.4 Any Permitted Transfer; or except for a Permitted Security Instrument, the recordation of any deed of trust, mortgage, lien or similar encumbrance against all or any portion of the Property or the Project.

I.1.78 “Unavoidable Delay” means any delay that is caused in all material respects by the other Party or that is beyond the control of the Housing Authority or the Developer, including delay caused by strikes, acts of God, pandemics, epidemics, declarations or proclamations of emergency by either the Housing Authority, the State, or the Federal government, weather, inability to obtain labor or materials, inability to obtain governmental permits or approvals, governmental restrictions, civil commotion, fire or similar causes, but excluding circumstances subject to Section VIII.7.1.

I.2 R
epresentations and Warranties.

I.2.0 Housing Authority Representations and Warranties . The representations and warranties of Housing Authority contained in this Section I.2.00 will be based upon the actual knowledge of the Housing Authority Executive Director as of the Effective Date.

All representations and warranties contained in this Section I.2.00 are true and correct as of the Effective Date. Housing Authority’s liability for misrepresentation or breach of warranty, representation or covenant, wherever contained in this Agreement, shall survive the execution and delivery of this Agreement and the Closing. Housing Authority hereby makes the following representations, covenants and warranties and acknowledges that the execution of this Agreement by Developer has been made in material reliance by Developer on such covenants, representations and warranties:

I.2.0.0 Housing Authority is a public body. Housing
Authority has the legal power, right and authority to enter into this Agreement, to execute the instruments and documents referenced herein, and to consummate the transactions contemplated hereby.

I.2.0.1 The persons executing any instruments for or on behalf of Housing Authority have been authorized to act on behalf of Housing Authority and this Agreement is valid and enforceable against Housing Authority in accordance with its terms and each instrument to be executed by Housing Authority pursuant hereto or in connection herewith shall, when executed, be valid and enforceable against Housing Authority in accordance with its terms. No approval, consent, order or authorization of, or designation or declaration of any other person, is required in connection with the valid execution and delivery of and compliance with this Agreement by Housing Authority. 18-29

13 I.2.0.2 Housing Authority has taken all requisite action and obtained all requisite consents for agreements or matters to which Housing Authority is a party in connection with entering into this Agreement and the instruments and documents referenced herein and in connection with the consummation of the transactions contemplated hereby.

I.2.0.3 On the Effective Date, the Property is composed of and contains a single legally formed parcel containing a total of approximately 5 acres.

I.2.0.4 Housing Authority is the owner of the entire right, title and interest in and to the Property.

I.2.0.5 There are no pending or, to the best of Housing Authority’s knowledge, threatened claims, allegations or lawsuits of any kind that could materially and adversely affect the value of the Property or prohibit the sale thereof, nor to the best of Housing Authority’s knowledge, is there any governmental investigation of any type or nature pending or threatened against or relating to the Property or the transactions contemplated hereby.

I.2.0.6 To the best of Housing Authority’s actual knowledge, and without independent investigation having been made by Housing Authority, the Housing Authority has received no written notice of any Hazardous Materials located on, under, or about the Property.

I.2.0.7 If the Housing Authority becomes aware of any act or circumstance that would change or render incorrect, in whole or in part, any representation or warranty made by the Housing Authority under this Agreement, whether as of the date given or any time thereafter, whether or not such representation or warranty was based upon the Housing Authority’s knowledge and/or belief as of a certain date, the Housing Authority will give written notice of such changed fact or circumstance to the Developer.

I.2.1 D
eveloper Representations and Warranties . The representations and warranties of Developer contained in this Section I.2.1 s hall be based upon the actual knowledge of Michael Ruane, President of National Community Renaissance of California and Geoffrey Brown, President and CEO of USA Properties Fund, as of the Effective Date. All representations and warranties contained in this Section I.2.1 are true and correct as of the Effective Date. The Developer’s liability for misrepresentation or breach of warranty, representation or covenant, wherever contained in this Agreement, shall survive the execution and delivery of this Agreement and the Closing. The Developer hereby makes the following representations, covenants and warranties and acknowledges that the execution of this Agreement by Housing Authority has been made in material reliance by Housing Authority on such covenants, representations and warranties:

I.2.1.1 The Developer is lawfully entitled to do business in the State of California. The Developer has the legal right, power and authority to enter into this Agreement and the instruments and documents referenced herein and to consummate the transactions contemplated hereby. The person(s) executing this 18-30

14 Agreement and the instruments referenced herein on behalf of the Developer hereby represent and warrant that such person(s) have the power, right and authority to bind the Developer.

I.2.1.2 The Developer has taken all requisite action and obtained all requisite consents in connection with entering into this Agreement and the instruments and documents referenced herein and the consummation of the transactions contemplated hereby, and no consent of any other party is required for the Developer’s authorization to enter into Agreement.

I.2.1.3 Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby wi ll result in a breach of or constitute a default under any other agreement, document, instrument or other obligation to which the Developer is a party or by which the Developer may be bound, or under law, statute, ordinance, rule, governmental regulation or any writ, injunction, order or decree of any court or governmental body applicable to the Developer or to the Property.

I.2.1.4 This Agreement is, and all agreements, instruments and documents to be executed by the Developer pursuant to this Agreement wi ll be duly executed by and will be valid and legally binding upon the Developer and enforceable in accordance with their respective terms, subject only to applicable bankruptcy, insolvency, reorganization, or similar laws or equitable principles affecting or limiting the rights of contracting parties generally . No approval, consent, order or authorization of, or designation or declaration of any other person, is required in connection with the valid execution and delivery of in compliance with this Agreement by the Developer.

I.2.1.5 If the Developer becomes aware of any act or
circumstance that would change or render incorrect, in whole or in part, any representation or warranty made by the Developer under this Agreement, whether as of the date given or any time thereafter, whether or not such representation or warranty was based upon the Developer’s knowledge and/or belief as of a certain date, the Developer must give immediate written notice of such changed fact or circumstance to the Housing Authority.

I.2.2 E
ffective Date. This Agreement is dated December 21, 2023, for reference purposes only. This Agreement shall not become effective until the date on which all of the following are true (“Effective Date”) and no later than December 29, 2023: (a) this Agreement is approved and executed by the appropriate authorities of Developer and delivered to Housing Authority; (b) Developer has delivered to Housing Authority a certified copy of the official action taken by all of the entities comprising the Developer approving this Agreement, substantially in the form attached to this Agreement as Exhibit F; (c) following all legally required notices and hearings, this Agreement is approved by the Housing Authority Board; and (d) this Agreement is executed by the authorized representatives of Housing Authority.

I.2.3 Exhibit List . The following is a list of the Exhibits attached to this Agreement. Each of the Exhibits is incorporated by this reference into the text of this Agreement.

Exhibit A Le gal Description of Property
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15 Exhibit B Scope of Development
Exhibit C Schedule of Performance
Exhibit D Form of Quitclaim Deed
Exhibit E Form of Notice of Agreement
Exhibit F Form of Official Action of Developer
Exhibit G Form of Certificate of Completion
Exhibit H Form of Regulatory Agreement
Exhibit I Form of Promissory Note – Land Loan
Exhibit J Form of Deed of Trust – Land Loan

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16 PROPERTY DISPOSITION
II.1 Purchase and Sale. In exchange for Developer’s payment of the Purchase Price and performance of Developer’s other covenants and undertakings set forth in this Agreement, the Housing Authority shall sell the Property to the Developer and the Developer shall purchase the Property from the Housing Authority pursuant to the terms and conditions of this Agreement.

For the purposes of exchanging funds and documents to complete the sale from the Housing Authority to the Developer and the purchase by the Developer from the Housing Authority of the Property pursuant to the terms of this Agreement, the Housing Authority and the Developer agree to open an escrow (“Escrow”) with the Escrow Holder. ARTICLE III o f this Agreement
constitutes the joint escrow instructions of the Parties to the Escrow Holder for completion of the Escrow for the sale of the Property, as contemplated by this Agreement. The Developer and the Housing Authority shall execute such further escrow instructions, consistent with the provisions of this Agreement, as may be reasonably requested by the Escrow Holder. In the event of any conflict between the provisions of this Agreement and any other escrow instructions requested by the Escrow Holder, as between the Housing Authority and the Developer, the provisions of this Agreement shall control.

II.2 Calculation of and Payment of Purchase Price
II.2.2.1 Appraisal. The fair market value to be used to establish the Purchase Price of the Property shall be established by a third-party appraisal. At a time prior to the Close of Escrow reasonably sufficient to permit an appraisal to be completed, the Housing Authority and the Developer must meet and confer in order to select an appraiser reasonably acceptable to the Housing Authority. Once the identity of the appraiser has been established, the Housing Authority or the Developer, as the Parties may agree, will engage the appraiser to establish the fair market value of the Property. The Housing Authority will supply any data concerning the Property reasonably requested by the appraiser for the purposes of completing the appraisal. The appraiser must promptly supply a copy of the completed appraisal to each of the Parties. The cost of the appraisal will be paid by the Developer. The fair market value of the Property established by appraisal will be the Purchase Price; provided, however, the Purchase Price shall be subject to the approval of all Parties.

II.2.2 Note and Deed of Trust. No
later than the Close of Escrow, the Developer
will pay the Purchase Price by depositing the fully executed and notarized, as applicable, Promissory Note – Land Loan in the form of Exhibit I and the Deed of Trust – Land Loan in the form of Exhibit J into the Escrow, at least 1 business day preceding the Escrow Closing Date. The principal balance of the Promissory Note – Land Loan will be the appraised fair market value of the Property, subject to Section II.2.2.1 (Appraisal) . The Parties will cooperate to complete any missing information in such instruments in sufficient time so that the final form thereof may be reviewed and approved by the Parties and executed and deposited with the Escrow Holder as required by the provisions of this Agreement.

II.2.3
Non-Recourse. The Developer will not have any direct or indirect personal liability for payment of the principal of, or interest on, the Promissory Note – Land Loan or the performance of the covenants of the Developer under the Deed of Trust – Land Loan, except as 18-33
ARTICLE II.

17 specifically provided in the provisions thereof in the event of the occurrence of fraud, bad faith waste and as otherwise specified. The sole recourse of the Housing Authority with respect to the principal of, or interest on, the Promissory Note – Land Loan and defaults by Developer in the performance of its covenants under the Deed of Trust – Land Loan will be to the Property, as is further described in both of such instruments.

II.2.4 Subo
rdination. The Deed of Trust – Land Loan will be subordinated only to Construction Financing/construction loan, a Permanent Loan, the Permitted Security Instruments securing each of such loans made by qualifying Lenders and in amounts which are consistent with the Project Budget (in each case, a “Senior Loan”) and to any Subordinate Loan and the Permitted Security Instrument securing each of such loans, which might be shown in the Project Budget, as revised from time to time, as approved by the Housing Authority Executive Director. The Executive Director or his or her designee on behalf of the Housing Authority is authorized to execute any subordination agreements documenting such subordination without the necessity of any further action or approval, providing that the form of such subordination shall be subject to the approval of the Executive Director and counsel for the Housing Authority.

II.3 E
minent Domain.

If any portion of the Property or any interest in any portion of the Property, becomes the subject of any eminent domain proceeding prior to Close of Escrow including the filing of any notice of intended condemnation or proceedings in the nature of eminent domain commenced by any Governmental Agency, the Housing Authority will immediately give the Developer notice of such occurrence, and the Developer will have the option, exercisable within 10 business days after receipt of such notice from the Housing Aut hority, to either: (a) cancel the Escrow and terminate this Agreement and the Escrow, in which case the Parties and the Escrow Holder shall proceed in accordance with Section 3.10; or ( b) continue with this Agreement in accordance with its terms, in which event the Housing Authority will assign to the Developer any right of the Housing Authority to receive any condemnation award attributable to the Property.

II.4 T
itle Approval. As soon as practicable following the Effective Date, the Housing Authority will obtain a Preliminary Report from Title Company and deliver a copy thereof to the Developer. Within 30 days following the Developer’s receipt of a Preliminary Report for the entire Property, the Developer will deliver the Developer’s Title Notice to the Housing Authority. If the Developer fails to deliver the Developer’s Title Notice to the Housing Authority within such 30-day period, the Developer will be deemed to approve the status of title to the Property. Within 20 days following receipt by the Housing Authority of Developer’s Title Notice, if any, the Housing Authority shall serve Housing Authority’s Title Notice Response. If the Housing Authority does not serve Housing Authority’s Title Notice Response, if necessary, within such 20-day period, the Housing Authority will be deemed to elect not to remove from the Preliminary Report any matter objected to in Developer’s Title Notice. If the Housing Authority elects in Housing Authority’s Title Notice Response to cause the removal of any item objected to in Developer’s Title Notice from title to the Property, the Housing Authority will cause the removal of each such objectionable matter not later than the Escrow Closing Date. If the Housing Authority is unwilling or unable to cause the removal of any item objected to in Developer’s Title Notice, then, within 10 days following the Developer’s receipt of Housing Authority’s Title Notice Response stating that the Housing Authority is unwilling or unable to 18-34

18 remove or cause the removal of any such objected-to item, the Developer may either (a) refuse to accept the title to and conveyance of the Property, in which case the Parties will have the right, subject to Section II.4.2, to cancel the Escrow and terminate this Agreement without liability to either Party or any other person, by delivery of a written notice of termination to the other Party and to the Escrow Holder, or (b) if no notice is duly provided to Housing Authority within the 10 days, Developer shall be deemed to waive its objection to any items set forth in Developer’s Title Notice.

II.4.1 If at any time prior to the Close of Escrow the Title Company issues an updated Preliminary Report containing any previously undisclosed matter affecting title to the Property, or the Housing Authority becomes aware of any previously undisclosed matter affecting title to the Property following the delivery of the Developer’s Title Notice, the Housing Authority must provide written notice to the Developer of such matter, together with any updated Preliminary Report related to such matter. Subject to the Housing Authority’s obligations under Section II.4.3 below, the Housing Authority and the Developer will have such rights and obligations with respect to such previously undisclosed title matters as they did with respect to any title matters set forth in the original Preliminary Report as set forth in Section II.4.

II.4.2 Before exercising any right a Party may have under this Section II.4 to cancel the Escrow and terminate this Agreement, such Party must notify the non- terminating Parties in writing of its election to terminate and must , upon a non- terminating Party’s request, which must be delivered, if at all, within 3 days following its receipt of the terminating Party’s notice of election to terminate, meet and confer with the non- terminating Party for a period of 30 days. During such time, the Parties wi ll meet as often as reasonably requested by any Party to negotiate, in good faith, methods and means by which the objectionable title matter may be eliminated or mitigated. Nothing herein wi ll constitute an agreement, representation, or warranty by any Party that an acceptable resolution of the objectionable title matter will be achieved, nor will any Party be obligated to expend any funds or undertake any other action whatsoever with respect to such title matter unless such agreement is reduced to a writing which is approved by the Parties, in their sole and absolute discretion. If, at the end of such 30 day period, the Parties have not been able to agree on a mutually acceptable method of resolving such title matter, or if any proposed agreement is disapproved by the Housing Authority Board, the Escrow will be cancelled, this Agreement shall be terminated without liability to any Party, and the Parties must proceed as provided in Section III.10.

II.4.3 The Housing Authority agrees not to place any matters of record against the Property (other than Permitted Exceptions and any matters arising from Housing Authority’s issuance or exercise of any remedy related to any approval for the Project), prior to the Close of Escrow, without the prior written consent of Developer.

II.5 D
eveloper Investigations. The Developer shall have until the expiration of the Due Diligence Period to complete, at its sole expense, all of its Due Diligence Investigations with respect to the entirety of the Property. The Developer will rely solely and exclusively upon the results of its Due Diligence Investigations of the Property, including, without limitation, investigations regarding geotechnical soil conditions, compliance with applicable laws pertaining to the use of the Property by the Developer and any other matters relevant to the condition or suitability of the Property for the Project, as the Developer may deem necessary or appropriate. 18-35

19 Housing Authority makes no representation or warranty to the Developer relating to the condition of the Property or suitability of the Property for any intended use or development by the Developer. If the Developer does not timely deliver its Due Diligence Investigation Rejection Notice prior to the end of the Due Diligence Period, the Developer will be deemed to have accepted the Property in its current condition. If the condition of the Property is rejected, then either Party will have the right, subject to Section 2.5.3, to cancel the Escrow and terminate this Agreement, in its sole discretion, without liability to the other Party or any other person, by delivery of a written notice of termination to the other Party and Escrow Holder. By its failure to timely deliver its Due Diligence Investigation Rejection Notice, the Developer will accept the condition of the Property in its existing “AS IS,” “WHERE IS” and “SUBJECT TO ALL FAULTS” condition, without any liability of the Housing Authority whatsoever. During the Due Diligence Period the Developer will conduct such environmental assessment(s) of the Property as the Developer deems appropriate. If such assessment(s) do not reveal the presence of any Hazardous Substances on the Property in levels that exceed applicable Governmental Requirements, then the Housing Authority must promptly and at its sole cost and expense install security fencing around the Property. If such assessment(s) do reveal the presence of any Hazardous Substances on the Property in levels that exceed applicable Governmental Requirements, then the Housing Authority and the Developer shall negotiate in good faith in an effort to reach agreement as to the allocation of responsibility and cost of remediation thereof.

II.5.0 Any Due Diligence Investigations of the Property by the Developer shall not unreasonably disrupt any then existing use or occupancy of the Property, if any, or the operations of the Housing Authority. The Developer will be liable for any damage or injury to any person or property arising from the acts of the Developer, its employees, agents or representatives during the course of any Due Diligence Investigations on the Property and the Developer will indemnify, defend with counsel reasonably acceptable to the Housing Authority and hold harmless the Housing Authority and its elected officials, officers, directors, attorneys, contractors, agents and employees from any and all actual or alleged liens, claims, demands or liability arising from any Due Diligence Investigations by the Developer on the Property other than from discovery of existing conditions on the Property. Prior to commencing any Due Diligence Investigations on the Property, the Developer must deliver copies of policies or certificates of insurance to the Housing Authority evidencing compliance by the Developer with the liability insurance requirements of Section V.3.

II.5.1 Before exercising any right a Party may have under this Section II.5 to cancel the Escrow and terminate this Agreement, such Party must notify the non-terminating Party in writing of its election to terminate and must , upon a non- terminating Party’s request, which must be delivered, if at all, within 3 days following its receipt of the terminating Party’s notice of election to terminate, meet and confer with the non- terminating Party for a period of 30 days.

During such time, the Parties will meet as often as reasonably requested by any Party to negotiate, in good faith, methods and means by which the objectionable due diligence matter may be eliminated or mitigated. Nothing herein will constitute an agreement, representation, or warranty by any Party that an acceptable resolution of the objectionable due diligence matter will be achieved, nor will any Party be obligated to expend any funds or undertake any other action whatsoever with respect to such due diligence matter unless such obligation is reduced to a writing which is approved by the Parties, in their sole and absolute discretion. If, at the end of such 30-day period, the Parties have not been able to agree on a mutually acceptable method of resolving the 18-36
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20 objectionable due diligence matter, or if any proposed agreement is disapproved by the Housing Authority Board, the Escrow shall be cancelled, this Agreement shall be terminated without liability to any Party, and the Parties shall proceed pursuant to Section III.10.

II.6 D eveloper to Obtain all Project Entitlements. Within the time provided in the Schedule of Performance, as the same may be revised from time to time in accordance with this Agreement, Developer shall develop and present to Housing Authority staff, for review, the following (collectively, the “Plans and Specifications”), all of which are subject to the Housing Authority’s approval in the Executive Director’s sole and absolute discretion:

II.6.1.1 A complete conceptual development plan for the Project on the Property that describes and depicts: ( a) the location and placement of proposed buildings and (b) the architecture and elevations of the proposed buildings; II.6.1.2 The proposed unit mix consistent with this
Agreement, showing unit size and affordability levels, including one manager’s unit, for the Project;
II.6.1.3 A proposed time schedule and cost estimates for the development of the Project on the Property;
II.6.1.4 A proposed financing plan identifying financing sources for all private and public improvements proposed for the Project; and II.6.1.5 Any and all Construction Plans and all other plans required to satisfy applicable requirements of the ordinances of the City.

II.6.2 The City of Rancho Mirage’s zoning, building and land use regulations (whether contained in ordinances, the City’s municipal code, conditions of approval, policies, practice or elsewhere, collectively, the “Housing Authority Requirements”) will be applicable to the use and development of the Project on the Property by the Developer. The Developer acknowledges that all Plans and Specifications and any changes to the Plans and Specifications will be subject to the Housing Authority Requirements. No action by the Housing Authority with reference to this Agreement or any related documents shall be deemed to constitute a waiver of any Housing Authority Requirements regarding the Property, the Project, the Developer, any successor-in-interest of the Developer or any successor-in-interest to the Property. No entitlement, permit or other approval from the Housing Authority for development of the Project on the Property will attach to any portion of the Property or otherwise become effective to allow the Developer to develop the Project on the Property until after the Developer owns fee title to that portion of the Property to which such entitlement, permit or other approval pertains. Under no circumstances may the Developer commence construction of any portion of the Project on the Property prior to the Developer owning fee title to the Property.

II.6.3 The discretionary approval by Housing Authority of the Scope of Development and Construction Plans, as set forth herein, will not be binding on the Rancho Mirage Planning Commission, or the City, regarding any approvals of the Project required by such bodies.

Housing Authority’s review and disapproval/approval of such Scope of Development and 18-37

21 Construction Plans is outside the context of any review City performs in its regulatory/permitting capacity, and Housing Authority’s review shall be at its sole and absolute discretion. The Developer obtains no right to develop the Project on the Property or any portion of the Property by virtue of this Agreement, except that following the Close of Escrow, the Developer will possess the same rights as any other owner of property within the City that desires to develop its property in a manner consistent with the City’s General Plan. If any revisions of the Scope of Development are required by a Governmental Agency (other than the Housing Authority) having jurisdiction over the Property or the Project, the Developer will promptly make any such revisions that are generally consistent with the Scope of Development.

II.6.4 Notwithstanding any provision to the contrary in this Agreement, following the Close of Escrow, the Developer agrees to accept and comply fully with any and all conditions of approval applicable to all approvals, permits and other governmental actions regarding the development or operation of the Project on the Property, so long as such conditions of approval are consistent with the Scope of Development and this Agreement in all material respects.

II.6.5 Developer to Pay All Costs and Expenses. Except for the Promissory Note – Land Loan and as may otherwise be provided herein and in Article VI of this Agreement, the Parties agree that the Housing Authority is under no obligation to provide any financial assistance to the Developer in connection with the Project. The Developer will be solely responsible for paying for the costs of all design work, construction, labor, materials, fees and permit expenses associated with the Project. The Developer must pay any and all fees pertaining to the review and approval of the Project by the Housing Authority, Planning Commission and/or City Council, any other Governmental Agency and utility service providers, including the costs of preparation of all required construction, planning and other documents reasonably required by a Governmental Agency pertinent to the development or operation of the Project on the Property, including, but not limited to, specifications, drawings, plans, maps, permit applications, land use appl ications, zoning applications, environmental review and disclosure documents and design review documents. The Developer must pay for any and all costs, including, but not limited to, the costs of design, construction, relocation and securing of permits for sewer or utility improvements and connections that may be required in development of the Project, whether located on or off of the Property. The Developer must obtain any and all necessary approvals prior to the commencement of applicable portions of construction, and the Developer must take reasonable precautions to ensure the safety and stability of surrounding properties during said construction. In accordance with this Section II.6.5, Developer will be responsible for the payment of the costs, or immediate reimbursement to the Housing Authority upon delivery of an invoice for the costs, of the following:

II.6.5.1 all fees or expenses of engineers, architects, financial consultants, legal, planning or other consultants or contractors, retained by the Developer for any study, analysis, evaluation, report, schedule, estimate, environmental review, planning and/or design activities, drawings, specifications or other activity or matter relating to the Property or the Project or the negotiation of this Agreement that may be undertaken by the Developer; and
II.6.5.2 all fees, charges and costs, make all deposits and provide all bonds or other security associated with the submission to and processing by the Housing Authority of any and all applications and other documents and information 18-38
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22 to be submitted to the Housing Authority or City by the Developer pursuant to this Agreement or otherwise associated with the Project.

II.6.6 The Developer must obtain all entitlements, permits and other approvals for use and development of the Project on the Property from each Governmental Agency, within the time period for such actions specifically set forth in the Schedule of Performance, subject to any extensions of time authorized by this Agreement upon the occurrence of an Unavoidable Delay.

As used herein, the term “entitlements” will include but not be limited to land use approvals required by the City for the Project including, but not limited to, site plan, design review approval, density bonus agreement, grading and building plans, and any necessary California Environmental Quality Act compliance.

8.19.2 F
ee Waivers . In the event that the City agrees to waive any fees or costs otherwise required for the processing of entitlements, review and approval of Plans and Specifications or issuance of a building permit (a “fee waiver” ), and if Developer reasonably determines that such a fee waiver could reasonably subject construction of the Project to the requirement of payment of prevailing wages under applicable provisions of California Labor Code Section 1720, et seq., then the Housing Authority and the Developer will meet and confer in order to agree upon a structure of documenting such fee waiver in a way that the grant of the same will not obligate the payment of prevailing wages for construction. By way of example, the Parties could agree to document the repayment of some or all of the fee waiver by a promissory note from Developer to the Housing Authority or to the City, as applicable, in a form similar to the Promissory Note – Land Loan, secured by a Permitted Security Instrument recorded against Developer’s title to the Property in a priority position junior to all other Permitted Security Instruments, including the Deed of Trust – Land Loan.

II.7 D
elivery of Property Free of Occupants At the Close of Escrow, the Housing Authority must deliver possession of the Property to Developer free and clear of occupancy by any persons and of any contractual rights created by or with the consent of the Housing Authority for any person or entity (other than Developer) to use or occupy the Property.

II.8 Project Marketing Plan.

At least 45 calendar days prior to the Close of Escrow, Developer must submit to the Housing Authority an affirmative fair housing marketing plan for the Project. Within 10 calendar days after the Housing Authority receives such marketing plan submitted by Developer, the Housing Authority will approve or disapprove such marketing plan. The marketing plan must include provisions to ensure that Developer will use commercially reasonable efforts to market the Project to eligible residents of the City, including but not limited to (a) no later than 90 days prior to completion of construction of the Project, notifying local government and nonprofit agencies serving Low, Very-Low, and Extremely Low Income Households in the City (a list of suggested organizations will be provided to Developer by the Housing Authority) of the availability of the Qualifying Units and requesting that these organizations assist in publicizing the availability of the Qualifying Units to their members and clients; (b) placing a sign on the Property advertising 18-39

23 the availability of the Qualifying Units and providing contact information throughout the marketing period. The Housing Authority’s failure to approve such marketing plan within the specified 10 calendar day period will constitute Housing Authority’s deemed approval of such marketing plan.

ESCROW INSTRUCTIONS
III.1 Opening of Escrow. For purposes of this Agreement, the opening of Escrow will be the first date on which a fully executed copy of this Agreement is deposited with Escrow Holder (“Escrow Opening Date”) (which may be deposited with Escrow Holder by electronic transmission, if acceptable to Escrow Holder). The Developer must cause the Escrow to be opened within 5 business days following the Effective Date. Escrow Holder must promptly confirm in writing to each of the Parties the escrow number assigned to this transaction and the Escrow Opening Date. This ARTICLE III w
ill constitute the joint escrow instructions of the
Housing Authority and the Developer to Escrow Holder for conduct of the Escrow to complete the purchase and sale of the Property between them, as contemplated in this Agreement.

III.2 Conditions to Close of Escrow. The conditions set forth below must be satisfied or waived in writing by the respective benefited Party on or before the Escrow Closing Date or the Party benefited by any unsatisfied condition will not be required to proceed to close Escrow.

III.2.1 Developer’s Conditions to Close of Escrow . T
he Developer’s obligation
to purchase the Property from the Housing Authority on the Escrow Closing Date will be subject to the satisfaction of the following conditions precedent, each of which can only be waived in writing by the Developer:

24 III.2.1.6 Developer approves the Escrow Holder’s estimated Escrow closing/settlement statement;
III.2.1.7 The representations, warranties and covenants of the Housing Authority set forth in Section I.2.0 are true and correct in all material respects on the Effective Date and on the Escrow Closing Date;
III.2.1.8 The Developer has obtained all entitlements required in connection with the development of the Property, including but not limited to all Plans and Specifications for on-site and off-site construction of the Project having received final review and approval from the City and building permits for the Project are confirmed by the City as ready to be issued upon payment by Developer of all necessary and required fees and costs , subject to conditions of approval reasonably acceptable to Developer (provided, however, nothing herein shall be interpreted or deemed to prevent or limit the City’s regulatory authority to impose conditions of approval of entitlement), any applicable appeal period has expired without appeal having been filed or, if an appeal is filed, such appeal has been denied, and no legal action has been instituted against Developer or the Housing Authority alleging the invalidity of such entitlements; III.2.1.9 The Housing Authority has completed all of its material obligations required by this Agreement to be completed prior to the Close of Escrow; and
III.2.1.10 The Housing Authority deposits the items into the Escrow required by Section III.3.

III.2.2 Housing Authority ’s Conditions to Close of Escrow. The Housing Authority’s obligation to sell the Property to the Developer on or before the Escrow Closing Date will be subject to the satisfaction of the following conditions precedent, which can only be waived in writing by the Housing Authority:

III.2.2.1 The Developer agrees, or is deemed to agree, to accept the title to and conveyance of the Property, pursuant to Section II.4; III.2.2.2 The Developer fails to deliver a Due Diligence Investigation Rejection Notice to the Housing Authority prior to the expiration of the Due Diligence Period;
III.2.2.3 Developer has obtained all approvals of City and Housing Authority, including but not limited to approval of the e ntitlement and Construction Plans, which are subject to Housing Authority’s sole and absolute discretion, and subject to City’s review in accordance with its police powers and all applicable federal, state and local laws, rules and regulations.

25 Authority, including a grading permit ready-to-issue upon the payment of necessary fees and costs, which must be accomplished no later than seven years after the effective date of this Agreement, as set forth in the Schedule of Performance; III.2.2.5 The Developer has completed all of its material obligations required by this Agreement to be completed prior to the Close of Escrow; III.2.2.6 The Developer submits to the Housing Authority the Developer’s organizational documents;
III.2.2.7 The Developer submits to the Housing Authority the marketing plan for the Project pursuant to Section II.8; III.2.2.8 The Developer submits to the Housing Authority a copy of the construction contract for the Project in substantially final form (with a copy of the final construction contract being delivered to the Housing Authority by Close of Escrow);
III.2.2.9 The Developer submits to the Housing Authority copies of the Construction Financing Documents in substantially final form and the Housing Authority has reviewed and approved the form of an amended and restated agreement of limited partnership for the entity established to receive the capital contributions of the Tax Credit Investor (with copies of the final instruments for both being delivered to the Housing Authority through Close of Escrow); III.2.2.10 The Developer submits to the Housing Authority a document evidencing a commitment from the Tax Credit Investor to Developer to provide the Tax Credit Equity;
III.2.2.11 The Developer submits to the Housing Authority documents evidencing a commitment from an Institutional Lender to Developer to provide the Permanent Loan;
III.2.2.12 The Developer submits to the Housing Authority documents evidencing a commitment from the Lender(s) of all Subordinate Loan(s), if any, to Developer to provide the Subordinate Loan(s);
III.2.2.13 Developer has received any other commitments for funding to make the construction and operation of the Project financially feasible consistent with the Project Budget;
III.2.2.14 The representations, warranties and covenants of the Developer set forth in Section I.2.1 are true and correct in all material respects on the Effective Date and on the Escrow Closing Date;
III.2.2.15 The Developer deposits the items into the Escrow required by Section III.3; and
18-42
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26 III.2.2.16 Housing Authority approves in writing the Purchase Price, at its sole and absolute discretion.

III.3 D eveloper’s Escrow Deposits. Following satisfaction or waiver of each of the Developer’s conditions to Close of Escrow set forth in Section III.2.1, the Developer shall de
posit the following funds and documents into Escrow at least 1 business day prior to the Escrow Closing Date:

III.3.1 P CO Statement. A PCO Statement executed by an authorized representative of the Developer.

III.3.2 I ntentionally Omitted.

III.3.3 N otice of Agreement . The Notice of Agreement executed by an authorized representative of the Developer , in recordable form, to be recorded against the Property at the Close of Escrow.

III.3.4 Regulatory Agreement . T he Regulatory Agreement executed by an authorized representative of Developer, in recordable form, to be recorded against the Property at the Close of Escrow.

III.3.5 Construction Financing Security Instrument(s) .

Permitted Security
Instrument(s) securing repayment of the Construction Financing, executed by an authorized representative of Developer, in recordable form, to be recorded against the Property at the Close of Escrow.

III.3.6 Subor dinate Loan(s) Security Instrument(s) . The Promissory Note – Land Loan, the Deed of Trust – Land Loan, and all Permitted Security Instrument(s) securing repayment of such of the Subordinate Loan(s) closing and funding at the Close of Escrow, if any, executed by an authorized representative of Developer, in recordable form, to be recorded against the Property at the Close of Escrow.

III.3.7 Subor
dinate Loan Land Use Restriction Agreement(s) . Agreement(s) restricting occupancy and rents in the Project as required by the makers of one or more of the Subordinate Loans, if any, executed by an authorized representative of Developer , in recordable form, to be recorded against the Property at the Close of Escrow.

III.3.8 Subor
dination Agreements . Subordination agreement(s) subordinating any financing to this Agreement and the Regulatory Agreement, reasonably approved by the Housing Authority and executed by an authorized representative of Developer, in recordable form, to be recorded against the Property at the Close of Escrow. For the avoidance of doubt, the Regulatory Agreement will be Senior to any lien placed upon the Property or any portion thereof, including the lien of any mortgage.

III.3.9 Other Funds and Documents . S
uch documents required from Developer
under the terms of this Agreement to close the Escrow, including funds required to pay all Escrow closing costs charged by the Escrow Holder in the performance of the Escrow Holder’s contractual 18-43

27 or statutory obligations relating to the Escrow, payment of which will be the sole responsibility of Developer.

III.4 H ousing Authority ’s Escrow Deposits Following satisfaction or waiver of each of the Housing Authority’s conditions to Close of Escrow set forth in Section III.2.2, t he Housing Authority must deposit the following documents into Escrow at least 1 business day prior to the Escrow Closing Date:

III.4.1 Qu itclaim Deed . The Quitclaim Deed executed by the authorized representative(s) of the Housing Authority in recordable form.

III.4.2 FIRPTA Affidavit. The FIRPTA Affidavit completed and executed by the authorized representative(s) of the Housing Authority.

III.4.3 Notice of Agreement. The Notice of Agreement executed by the authorized representative(s) of the Housing Authority in recordable form.

III.4.4 Regulatory Agreement . T he Regulatory Agreement signed by the authorized representative(s) of the Housing Authority in recordable form.

III.4.5 Other Documents . S uch other documents required from the Housing Authority under the terms of this Agreement to close the Escrow or by the Escrow Holder in the performance of the Escrow Holder’s contractual or statutory obligations regarding the Escrow.

III.5 Closing Procedure Wh en each of the Developer’s Escrow required deposits specified in Section III.3 an d each of the Housing Authority’s Escrow required deposits specified in Section III.4 are deposited into Escrow, Escrow Holder must request confirmation in writing from both the Housing Authority and the Developer that each of their respective conditions to the Close of Escrow, as set forth in Section III.2, are satisfied or waived. Upon Escrow Holder’s receipt of such written confirmation from both the Housing Authority and the Developer, Escrow Holder will close the Escrow by doing all of the following:

III.5.1 Recordation of Documents . File the documents set forth in Section III.7 with the Office of the Recorder of the County, for recordation in the order set forth in Section III.7.

III.5.2 D istribution of Recorded Documents . Distribute each recorded document to the Party or person designated for such distribution in Section III.7.

III.5.3 P CO Statement . File the PCO Statement with the appropriate office of the County.

III.5.4 FIRPTA Affidavit . File the FIRPTA Affidavit with the United States Internal Revenue Service.

III.5.5 Title Policy. Obtain and deliver A n ALTA owner’s standard title policy showing only Permitted Exceptions to the Developer and an ALTA extended lender’s policy, insuring against any loss of priority for sitework liens, among other coverages, in the liability amount of the Promissory Note – Land Loan, subject only to Permitted Exceptions acceptable to 18-44

28 the Housing Authority, to the Housing Authority (the cost of this policy will be paid by the Developer).

III.5.6 F unds . Deliver all funds held by the Escrow Holder for the account of Housing Authority to Housing Authority, less any charges to the account of Housing Authority pursuant to the Escrow closing statement approved by the Housing Authority and the terms of this Agreement, and all other remaining funds held by the Escrow Holder for the account of Developer to Developer and less any other charges to the account of Developer pursuant to the Escrow closing statement approved by the Developer and to the terms of this Agreement.

III.6 Close of Escrow T
he Close of Escrow must occur on or before the Escrow Closing Date. The Housing Authority and the Developer may mutually agree to change the Escrow Closing Date by joint written instruction to the Escrow Holder. The Housing Authority Executive Director is authorized to agree to one or more extensions of the Escrow Closing Date on behalf of the Housing Authority, in the Housing Authority Executive Director’s sole and absolute discretion. If for any reason the Close of Escrow has not occurred by the Escrow Closing Date, as it may have been extended, then any Party not then in default of this Agre ement may cancel the Escrow and terminate this Agreement, subject to the notice and cure provisions of Section VII.1 ( to the extent
applicable), without liability to any other Party or any other person for such termination and cancellation, by delivering written notice of termination to the other Party and Escrow Holder and, thereafter, the Parties shall proceed pursuant to Section III.10 if the non-terminating Party is not in default or pursuant to Section 7.1 or 7.1.4 (as applicable) if the non -terminating Party is in default. Without limiting the right of any Party to terminate this Agreement pursuant to the preceding sentence, if Escrow does not close on or before the Escrow Closing Date and if no Party has exercised its contractual right to cancel Escrow and terminate this Agreement before such time, then Escrow may close as soon as reasonably possible following the first date on which Escrow Holder is in a position to close the Escrow pursuant to the terms and conditions of this Agreement.

III.7 R
ecordation and Distribution of Documents. As applicable, Escrow Holder must cause the following documents to be recorded in the official records of the Recorder of the County in the following order of priority at the Close of Escrow: (a) the Quitclaim Deed ; (b) Permitted Security Instrument(s) securing the Construction Financing; (c) the Regulatory Agreement; (d) the Deed of Trust – Land Loan; I the Notice of Agreement; (f ) the Subordination Agreements described in Sections 3.3.8; and (g) any other documents to be recorded through the Escrow upon the joint instructions of the Housing Authority and the Developer. The Escrow Holder will deliver the original, executed Promissory Note – Land Loan and conformed copies of all documents filed for recording to the Housing Authority, and copies of recorded documents to the Developer and any other entity or person designated in the written closing escrow instructions of the Parties to receive an original or conformed copy of each such document. Each copy of a document filed for recording shall show all recording information. The Parties intend and agree that this Section 3.7 shall establish the relative priorities of the documents to be recorded in the official records of the County through the Escrow, by providing for recordation of Senior interests prior in time to junior interests, as provided in this Section 3.7.

29 borne by Developer at the Close of Escrow by delivering the Escrow Holder’s estimated closing/settlement statement to both the Housing Authority and the Developer at least 4 business days prior to the Escrow Closing Date. The Developer must pay the premium charged by the Title Company for the title policies issued to both the Developer and the Housing Authority, as well as all recording fees charged as reflected in the approved closing statement, all documentary transfer taxes, all Escrow fees, and any and all other charges, fees and taxes levied by a Governmental Agency arising from the conveyance of any portion of the Property through the transaction contemplated in this Agreement.

III.9 E
scrow Cancellation Charges. If the Escrow fails to close due to the Housing Authority’s material default under this Agreement and the Escrow is cancelled and this Agreement is terminated, the Housing Authority must pay all ordinary and reasonable Escrow and title order cancellation charges. If the Escrow fails to close due to the Developer’s material default under this Agreement and the Escrow is cancelled and this Agreement is terminated, the Developer must pay all ordinary and reasonable Escrow and title order cancellation charges. If the Escrow fails to close for any reason other than the material default of either the Developer or the Housing Authority and the Escrow is cancelled and this Agreement is terminated, the Developer and the Housing Authority shall each pay one-half of any ordinary and reasonable Escrow and title order cancellation charges.

III.10 Escrow C
ancellation. If this Agreement is terminated and the Escrow cancelled pursuant to a contractual right granted to a Party in this Agreement to terminate this Agreement and cancel the Escrow, other than due to the material default of another Party, the Parties must do each of the following:

III.10.1 Ca
ncellation Instructions. The Parties will, within 3 business days of receipt of Escrow Holder’s written request, execute any reasonable Escrow cancellation instructions requested by Escrow Holder;
III.10.2 Re
turn of Funds and Documents. Within 10 days of receipt by the Parties of a statement of Escrow and title order cancellation charges from Escrow Holder: (a) the Developer or Escrow Holder shall return to the Housing Authority any documents previously delivered by the Housing Authority to the Developer or Escrow Holder, (b) the Housing Authority or Escrow Holder must return to the Developer all documents previously delivered by the Developer to the Housing Authority or Escrow Holder; (c) Escrow Holder shall return to the Developer any funds deposited by Developer into Escrow, less the Developer’s share of customary and reasonable Escrow and title order cancellation charges as provided in Section III.9, if any; and (d) Escrow Holder shall return to the Housing Authority any funds deposited by Housing Authority into Escrow if it has already been deposited, less the Housing Authority’s share of customary and reasonable Escrow and title order cancellation charges as provided in Section III.9, if any.

III.11 Report to IRS.

Following the Close of Escrow and prior to the last date on which such report is required to be filed with the Internal Revenue Service, if such report is required pursuant to Section 6045(e) of the Internal Revenue Code, Escrow Holder must report the gross proceeds of the purchase and sale of the Property to the Internal Revenue Service on Form 1099- B, W-9 or such other form(s) as may be specified by the Internal Revenue Service pursuant to Section 6045(e). Upon the filing of such reporting form with the Internal Revenue Service, 18-46

30 Escrow Holder must deliver a copy of the filed form to the Housing Authority and the Developer.

PROJECT DEVELOPMENT
IV.1 Developer Covenant to Undertake Project. The Developer covenants for itself, its successors and assigns, to and for the benefit of the Housing Authority, that the Developer will commence and complete the development of the Project on the Property within the time period for such actions set forth in the Schedule of Performance. The Developer covenants and agrees for itself, its successors, and assigns, that the Property will be improved and developed with the Project in substantial conformity with the terms and conditions of this Agreement, the Scope of Development, the Schedule of Performance, any and all Construction Plans, and Plans and Specifications and similar development documents required by this Agreement, except for such changes as may be mutually agreed upon in writing by and among the Parties, and all applicable laws, regulations, orders and conditions of each Governmental Agency with jurisdiction over the Property or the Project. The covenants of this Section IV.1 s hall run with the
land of the Property until released by recordation of the Certificate of Completion.

IV.2 Construction Contract; Construction Schedule. Prior to commencing construction of the Project, Developer shall provide the Housing Authority with a copy of a stipulated sum-based construction contract or guaranteed maximum price construction contract between Developer and its general contractor for all of the improvements required to be constructed by Developer hereunder, certified by Developer to be a true and correct copy thereof. Developer shall obtain building permits, and commence and complete construction of the Project, by the respective times established therefor in the Schedule of Performance.

IV.4 Construction Start and Completion of Project.

The Developer shall commence construction of the Project no later than the Project Commencement Date, and thereafter to be completed in a good and workmanlike manner in substantial conformity with the approved Plans and Specifications and conditions for the Project approved by the Housing Authority and the Schedule of Performance, subject to Unavoidable Delays. Promptly upon Completion of Construction of the Project, Developer must request that the Housing Authority issue an executed Certification of Completion and if the Housing Authority determines that the final Certificate of Occupancy for the Project has been issued, the Housing Authority must execute and deliver a Certificate of Completion to the Developer. The Developer will, promptly upon completion of the work of improvement(s) for the Project , cause the Project to be inspected by each Governmental Agency with jurisdiction over the Project, must correct any defects and deficiencies that may be disclosed by any such inspection and must cause all occupancy certificates and other licenses, permits and authorizations necessary for the operation and occupancy of the completed Project to be promptly issued. The Developer shall do and perform all of the foregoing acts and things and cause all such occupancy certificates, licenses, and authorizations for the Project to be issued on or before the date set forth therefor in the Schedule of Performance as the completion date for the Project. After construction of the Project has 18-47
ARTICLE IV.

31 commenced, the Developer shall not permit construction of the Project to cease or be suspended for a time period in excess of 30 consecutive calendar days, subject to Unavoidable Delays.

IV.5 Co mpliance with Laws. All work performed in connection with the development and construction of the Project shall comply with all Governmental Requirements.

IV.6 Schedule of Performance. The Schedule of Performance establishes various dates and times for the Developer and the Housing Authority the conditions precedent to the Close of Escrow. The Parties agree that time is of the essence in the performance of such tasks and the satisfaction of conditions precedent, in view of the large investment of resources that all Parties recognize will be required for the Project. If Developer recognizes that the date or time for the performance of a task or the satisfaction of a condition set forth in either the text of this Agreement or in the Schedule of Performance might not be achieved, then prior to such date or time Developer must notify the Housing Authority of the same and the Parties shall consider whether a modification to the text of this Agreement or to the Schedule of Performance is indicated. Any decision to approve a modification to a time or date established in either the text of this Agreement or the Schedule of Performance shall be subject to the sole discretion of the Housing Authority. Any modification of a time or date for performance of a particular task or satisfaction of a particular condition may be approved on behalf of the Housing Authority by the Housing Authority Executive Director, in his or her reasonable discretion. If performance of a task or satisfaction of a condition in the Schedule Performance is prevented or delayed by Unavoidable Delays, the deadline for completion of such task or satisfaction of such condition will be extended on a day-for-day basis equal to the delay caused by such Unavoidable Delays.

IV.7 Developer Attendance at Housing Authority
Board Meetings. The Developer
agrees to have one or more of its employees or consultants who are knowledgeable regarding this Agreement and the development of the Project, such that such person(s) can meaningfully respond to Housing Authority questions regarding the progress of the Project, attend meetings of the Housing Authority Board when requested to do so on not less than 10 days prior written notice by Housing Authority staff.

IV.8 Housing Authority’
s Right to Inspect Project and Property. Officers,
employees, agents and representatives of the Housing Authority designated by the Housing Authority Executive Director will have the right of reasonable access to the Property, without the payment of charges or fees, during normal construction hours during construction of the Project.

32 further right, from time to time, to retain one or more consultants to inspect the Project and verify compliance by the Developer with the provisions of this Agreement. The Developer acknowledges and agrees that any such inspections are for the sole purpose of protecting the Housing Authority’s rights under this Agreement, are made solely for the Housing Authority’s benefit, and that all such inspections may be superficial and general in nature made for the purpose of informing the Housing Authority of the progress of the Project and the conformity of the Project with the terms and conditions of this Agreement. As a consequence of the foregoing, Developer acknowledges and agrees that it will not be entitled to rely on any such inspection(s) as constituting an approval, satisfaction or acceptance of any materials, workmanship, conformity of the Project with this Agreement or otherwise. The Developer agrees to make its own regular inspections of the Project to determine that the quality of the Project and all other requirements of the work of construction of the Project are being performed in a manner satisfactory to the Developer. The Developer also agrees to immediately notify the Housing Authority in writing should the Developer’s inspections or those of the Lender supplying the Construction Financing show any matters that will prevent the entire Project from being completed by the Project Completion Date set forth in the Schedule of Performance. Without limiting the foregoing, the Developer will permit the Housing Authority upon reasonable notice to examine and copy all books and account records and other papers relating to the Property and the construction of the Project. The Developer will use commercially reasonable efforts to cause all contractors, subcontractors and materialmen to cooperate with the Housing Authority to enable such examination.

IV.9 C
ost of Construction. The cost and expense of completing the Project, including, without limitation, constructing all legally imposed on- and off-site improvements and providing all utilities and of applying for all required land use, construction, inspection, plan check and development impact fees imposed by the Housing Authority or City, will be borne by Developer at its sole cost, expense and liability except as otherwise provided in this Agreement. Developer will bear all costs and expenses incurred to process and obtain all entitlements and must bear all costs and expenses (except to the extent expressly set forth otherwise in this Agreement), associated with satisfaction of any and all terms, conditions, requirements, mitigation measures and other exactions imposed on, or required in connection with, such entitlements. Developer shall benefit from a reduction and deferral of development impact fees in accordance with applicable provisions of this Agreement.

IV.10 Prevailing Wages. The Developer acknowledges that the Housing Authority has not made any representation, express or implied, to the Developer or any person associated with the Developer regarding whether laborers employed to construct the Project must be paid the prevailing per diem wage rate for their labor classification, pursuant to Labor Code Sections 1720, et seq. The Developer agrees with the Housing Authority that the Developer will be solely responsible to determine whether construction of the Project must be done at prevailing wage rates.

IV.10.0 T he Developer, on behalf of itself, its successors, and assigns, waives and releases the Housing Authority from any right of action that may be available to it pursuant to Labor Code Sections 1726 and 1781. The Developer acknowledges the protections of Civil Code Section 1542 relative to the waiver and release set forth below, which reads as follows:
18-49

33 “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS

WHICH 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.”

BY INITIALING BELOW, THE DEVELOPER KNOWINGLY AND VOLUNTARILY WAIVES THE PROVISIONS OF SECTION 1542 SOLELY IN CONNECTION WITH THE WAIVERS AND RELEASES OF THIS SECTION IV.10.0.
_________________
Developer’s Initials
IV.10.1 Additionally, in accordance with Section VII.8, the Developer shall indemnify, defend with counsel acceptable to the Housing Authority and hold the Housing Authority harmless against any claims pursuant to Labor Code Sections 1726 and 1781 arising from this Agreement or the construction or operation of the Project IV.11 I
ntentionally Omitted.

IV.12 Certificate of Completion. Following the substantial Completion of Construction of the Project, and upon written request from the Developer for issuance of a Certificate of Completion for the Project, the Housing Authority shall inspect the Project to determine whether or not the Project has been substantially completed in compliance with this Agreement. If the Housing Authority determines that the conditions of Section IV.4 have been satisfied and that the Project is complete and in compliance with this Agreement, the Housing Authority Executive Director will furnish the Developer with a Certificate of Completion for the Project. If the Housing Authority determines that the Project is not in compliance with this Agreement, the Housing Authority Executive Director must send written notice specifying each non-conformity to the Developer. Upon issuance by the City of the final certificate of occupancy for the Project, the Housing Authority must furnish the Developer with a Certificate of Completion for the Project.

IV.12.0 T
he Certificate of Completion, upon issuance, will be evidence of the Housing Authority’s conclusive determination of Developer’s satisfactory substantial completion of the entirety of the Project pursuant to the terms of this Agreement.

IV.12.1 The Housing Authority will not unreasonably withhold the issuance of a Certificate of Completion. After recordation of a Certificate of Completion, any person then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the Propert y improved with the Project will not (because of such ownership, purchase, lease or acquisition) incur any obligation or liability under this Agreement regarding construction or installation of the Project except that such person will be bound by any reservations, covenants, conditions, restrictions and other interests recorded against the Property pursuant to this Agreement. 18-50

34 IV.12.2 A Certificate of Completion will not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of a mortgage, or any insurer of a mortgage securing money loaned to finance the Project, or any party thereof. A Certificate of Completion shall not be deemed to constitute a notice of completion under Section 3093 of the California Civil Code, nor shall it act to terminate the continuing covenants, restrictions or conditions contained in any instruments recorded against the Property pursuant to this Agreement. A Certificate of Completion is not evidence of the compliance of the Project with any Housing Authority Requirements or any building code, conditions of approval, land use, zoning or other requirements of the Housing Authority or any Governmental Agency with jurisdiction over the Property, other than the Housing Authority.

DEVELOPER COVENANTS
V.1 Obligation to Refrain from Discrimination. The Developer for itself, its successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that there shall be no discrimination against or segregation of any person, or group of persons, on account of sex, marital status, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall the Developer, itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sub-tenants, sub-lessees or vendees of the Property, except only as may be necessary for Developer to comply with regulatory agreements, covenants and other agreements regulating occupancy of the Project. Subdivision (d) of Section 51 of the Civil Code and subdivision (n), (o), and (p) of Section 12955 of the Government Code shall apply to this Section 5.1 and to Section 5.2.1 below. The covenant of this Section V.1 s hall
run with the Property and shall be enforceable against the Developer and its successors and assigns in perpetuity.

V.2 Form of Non-Discrimination and Non-Segregation Clauses. The Developer for itself, its successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that:

V.2.1 The Developer an
d such successors and such assigns shall refrain from
restricting the sale, lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of the Property (or any portion thereof) on the basis of sex, marital status, race, color, religion, creed, ancestry or national origin of any person.

V.2.2 All deeds, leases or contracts pertaining to the Property shall contain or be subject to substantially the following non-discrimination or non-segregation covenants:

V.2.2.1 In deeds: “The grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises 18-51
ARTICLE V.

35 herein conveyed, nor shall the grantee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sub- tenants, sub- lessee, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land.”
V.2.2.2 In leases: “The lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein le ased nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants lessees, sub- lessee, sub-tenants, or vendees in the premises herein leased.” V.2.2.3 In contracts: “There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed or leased, nor shall the transferee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sub- lessees, sub -tenants, or vendees of the premises herein transferred.” The foregoing provision shall be binding upon and shall obligate the contracting party or parties and any subcontracting party or parties, or other transferees under the instrument.

The covenant of this Section V.2 will run with title to the Property in perpetuity, shall be enforceable against the Developer and its successors and assigns, and shall be covenants set forth in the Quitclaim Deed.

V.3 E
nvironmental Indemnity of the Housing Authority by the Developer. The Developer agrees, at its sole cost and expense, to fully indemnify, protect, hold harmless, and defend (with counsel selected by the Developer and reasonably approved by the Housing Authority) the Housing Authority and its commissions, agents, attorneys, officers, employees, and authorized representatives (collectively, the “Indemnified Parties”) from and against any and all claims, demands, damages, losses, liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits, proceedings, costs, disbursements and expenses, including, without limitation, attorney fees, disbursements and costs of attorneys, environmental consultants and other experts, and all foreseeable and unforeseeable damages or costs of any kind or of any nature whatsoever (collectively, “Environmental Claims”) that may, at any time, be imposed upon, incurred or suffered by, or claimed, asserted or awarded against, the Indemnified Parties, relating to or arising from any of the following “Environmental Matters” existing or occurring 18-52

36 during or arising from the Developer’s ownership of the Property or construction or operation of the Project:

V.3.1 The presence of Hazardous Substances on, in, under, from or affecting all or any portion of the Property or the Project.

V.3.2 The storage, holding, handling, release, threatened release, discharge, generation, leak, abatement, removal or transportation of any Hazardous Substances on, in, under, from or affecting the Property or the Project.

V.3.3 The violation of any law, rule, regulation, judgment, order, permit, license, agreement, covenant, restriction, requirement or the like by the Developer, its agents or contractors, relating to or governing in any way Hazardous Substances on, in, under, from or affecting the Property or the Project.

V.3.4 The failure of the Developer, its agents or contractors, to properly complete, obtain, submit and/or file any and all notices, permits, licenses, authorizations, covenants and the like relating to Hazardous Substances on, in, under, from or affecting the Property or the Project in connection with the Developer’s activities on the Property or regarding the Project.

V.3.5 The implementation and enforcement by the Developer, its agents or contractors of any monitoring, notification or other precautionary measures that may, at any time, become necessary to protect against the release, potential release or dischar ge of Hazardous Substances on, in, under, from or affecting the Property or the Project.

V.3.6 The failure of the Developer, its agents or contractors, in compliance with all applicable Environmental Laws, to lawfully remove, contain, transport or dispose of any Hazardous Substances existing, stored or generated on, in, under or from the Property or the Project.

V.3.7 Any investigation, inquiry, order, hearing, action or other proceeding by or before any Governmental Agency in connection with any Hazardous Substances on, in, under, from or affecting the Property or the Project or the violation of any Environmental Law relating to the Property or the Project.

V.3.8 The Developer shall pay to the Indemnified Parties all costs and expenses including, without limitation, reasonable attorneys’ fees and costs, incurred by the Indemnified Parties in connection with enforcement of the aforementioned environmental indemnity.

V.3.9 Notwithstanding anything to the contrary in this Section 5.3, Developer shall have no obligation to indemnify any of the Indemnified Parties with respect to Environmental Matters or Environmental Claims (i) relating to or arising from Hazardous Substances that were present on, in or under the Property prior to the Close of Escrow, (ii) to the extent relating to or arising from the active negligence or willful misconduct of any of the Indemnified Parties.

V.4 I
nsurance. In order to protect the Housing Authority and its commissions, agents, attorneys, officers, employees and authorized representatives (collectively, “Additional Insureds”) against any and all claims and liability for death, injury, loss and damage resulting 18-53

37 from the Developer’s actions in connection with this Agreement, the Property, and the Project, the Developer shall secure and maintain the insurance coverage described in and required by this Section V.4. The Housing Authority shall not have any obligation under this Agreement until the Developer provides the required policies and/or certificates evidencing the insurance required by this Section V.4 to the Housing Authority and the Housing Authority approves such evidence of insurance. The Developer shall pay any deductibles and self-insured retentions under all insurance policies issued in satisfaction of the terms of this Agreement. Developer shall retain all insurance policies as set forth in this Section V.4 until recordation of the Certificate of Completion.

V.4.1 W
orkers’ Compensation Insurance Requirement . The Developer shall submit written proof that the Developer is insured against liability for workers’ compensation in accordance with the provisions of Section 3700 of the Labor Code. By executing this Agreement, the Developer makes the following certification, required by Section 1861 of the Labor Code:
“I am aware of the provisions of section 3700 of the Labor Code w
hich require every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of that code, and I will comply with suc h provisions before commencing the performance of the work of the Agreement.”
The Developer shall require each contractor and sub-contractor performing work on the Project to provide workers’ compensation coverage for all of such contractor’s or sub- contractor’s employees, unless the contractor’s or sub -contractor’s employees are co vered by workers’ compensation insurance provided by the Developer. If any class of employees engaged in work or services performed in connection with the Project is not covered by Labor Code Section 3700, the Developer shall provide and/or require each contractor or sub -contractor to provide adequate workers’ compensation insurance covering such employees. Each workers’ compensation policy procured pursuant to this Section V.4.1 shall contain a full waiver of subrogation clause in favor of the Additional Insureds.

V.4.2 L
iability and Permanent Insurance Requirements.

V.4.2.1 The Developer shall maintain in full force and effect, from the Effective Date until the issuance of the Certificate of Completion, subject to Section V.4.2.4, the following insurance coverage:

V.4.2.1.1 Commercial General Liability Insurance coverage, including, but not limited to, Premises-Operations, Contractual Liability Insurance (specifically covering all indemnity obligations of the Developer pursuant to this Agreement), Products- Completed Operations Hazards, Personal Injury (including bodily injury and death) and Property Damage for liability arising out of the construction of the Project and/or the Developer’s operations concerning the Property or the Project. The commercial general liability insurance coverage shall have minimum limits for Bodily Injury and Property Damage liability of $1,000,000 each occurrence and $2,000,000 aggregate.
18-54

38 V.4.2.1.2 Automobile Liability Insurance against claims of Personal Injury (including bodily injury and death) and Property Damage covering all owned, non-owned, leased, hired and non-owned vehicles used by the Developer with minimum limits for Bodily Injury and Property Damage of $2,000,000 combined single limit. Such insurance may be provided by a business or commercial vehicle policy.

V.4.2.1.3 If the Developer hires a consultant to provide design services, such as architectural or engineering services in connection with the Project, or any portion of the Project, the Developer shall require each such consultant to provide Professional Liability (Errors and Omissions) Insurance, for liability arising out of, or in connection with, the performance of such design services, with limits of not less than $2,000,000, subject only to the condition that such insurance coverage must be reasonably available at a reasonable cost. If the liability limit specified in this Section cannot be reasonably obtained, the Developer will require such consultants to provide such insurance coverage in liability amounts as are reasonably available under the circumstances; provided, however, in no event shall such limits be less than $1,000,000.

V.4.2.1.4 Upon Completion of Construction of the Project or any completed portion thereof, the Developer shall maintain Fire and Extended Coverage Insurance, excluding earthquake coverage, on the Project on a blanket basis or with an agreed amount clause in amounts not less than 100% of the replacement value of the Project or portion thereof.

V.4.2.2 During the construction of the Project, the Developer shall require that its general contractor and each major sub-contractor performing work on the Project maintain the following insurance coverage, as specified below, at all times during the performance of said work, or the Developer must provide for such contractor’s “wrap” coverage, as specified below, at all times during the performance of said work:

V.4.2.2.1 The Developer will maintain Builder’s Risk
Insurance to be written on an All Risk Completed Value form, in an aggregate amount equal to 100% of the completed insurable value of the Project or portion of the Project on which such contractor is performing work.

V.4.2.2.2 Each general contractor and each major sub-
contractor shall maintain Commercial General Liability Insurance with limits of not less than $1,000,000 per occurrence and $2,000,000 aggregate to protect the Developer during the construction of the Project from claims involving bodily injury and/or death and damage to the property of others.

V.4.2.2.3 Each general contractor and each major sub-
contractor will maintain Automobile Liability Insurance against claims of personal injury (including bodily injury and death) and property damage covering all owned, leased, hired and non-owned vehicles used in the performance of the contractor’s obligations with minimum limits for bodily injury and property damage of $1,000,000 each occurrence and $2,000,000 aggregate.

Such coverage may be provided with a combination of commercial automobile liability 18-55
■

39 insurance and an excess or umbrella liability policy. Such automobile liability insurance may be provided by a business or commercial vehicle policy.

V.4.2.3 The insurance required in Section V.4.2.1 and
Section V.4.2.2 above shall include endorsements naming the Additional Insureds as additional insured for liability arising out of this Agreement and any operation related to this Agreement.

V.4.2.4 Any insurance coverage required under this
Agreement, with the exception of the Professional Liability (Errors and Omissions) Insurance referenced in Section 5.4.2.1.3 above, shall be written on an “occurrence” basis.

The requirements of this Section V.4.2.4 will survive any expiration or termination of this Agreement and the recordation of the Quitclaim Deed and any Certificate of Completion.

V.4.2.5 Receipt by the Housing Authority of evidence of insurance that does not comply with the above requirements shall not constitute a waiver of the insurance requirements of this Agreement.

V.4.2.6 Subject to Section V.4.2.4, all of the insurance coverage required under this Section V.4 shall be maintained by the Developer or its contractors, as required by the terms of this Agreement, until the issuance of the Certificate of Completion and shall not be reduced, modified, or canceled without at least 30 days prior written notice to the Developer. The Developer shall immediately obtain replacement coverage for any required insurance policy that is terminated, canceled, non- renewed, or whose policy limits are exhausted or upon insolvency of the insurer that issued the policy.

V.4.2.7 All insurance to be obtained and maintained by the Developer under this Section V.4 shall be issued by a company or companies listed in the then current “Best’s Key Rating Guide” publication with a minimum of an “A:VII” rating and be admitted to conduct business in the State of California.

V.4.2.8 The Housing Authority will not accept self-insurance in satisfaction of the insurance requirements of this Section V.4.

V.4.2.9 All insurance obtained and maintained by the
Developer in satisfaction of the requirements of this Agreement shall be primary to and not contributing to any insurance maintained by the Additional Insureds.

V.4.2.10 Insurance coverage in the minimum amounts set
forth in this Section V.4 shall not be construed to relieve the Developer of any liability, whether within, outside, or in excess of such coverage and regardless of solvency or insolvency of the insurer that issues the coverage , nor shall it preclude the Additional Insureds from taking such other actions as are available to them under any other provision of this Agreement or otherwise at law.

V.4.3 Failure by the Developer to maintain all insurance coverage required by this Section V.4 in effect shall be an Event of Default by the Developer. The Housing Authority, at its 18-56
■

40 sole option, may exercise any remedy available to it in connection with such an Event of Default.

Alternatively, the Housing Authority may, at its sole option, purchase any such required insurance coverage and the Housing Authority will be entitled to immediate payment from the Developer for any premiums and associated costs paid by the Housing Authority for such insurance coverage.

Any election by the Housing Authority to purchase or not to purchase insurance otherwise required to be carried by the Developer shall not relieve the Developer of its obligation to obtain and maintain the insurance coverage required by this Agreement.

PROJECT FINANCING
VI.1 Project Financing. Developer shall finance the development of the Project in accordance with the Project Budget. Further, Housing Authority and Developer agree that the financing of the Project shall comply with all of the following:

VI.1.1 Tax Credit Financing . T o provide funds for the development and construction of the Project, Developer shall in good faith apply for and obtain an allocation of Tax Credits to finance a portion of the Project Costs. Developer shall use commercially reasonably efforts to submit an application for an allocation of Tax Credits by the first competitive application funding round deadline following the Effective Date in which such an application can reasonably be submitted. If Developer does not receive an allocation of Tax Credits as a result of such application, the Developer agrees to use commercially reasonably efforts to submit an application for an allocation of Tax Credits for the next available competitive application funding round of TCAC’s allocation meetings. If Developer does not receive an allocation of Tax Credits as a result of such second application, the Parties agree to meet and confer in good faith for a period of 90 days to determine if a feasible and mutually acceptable alternate arrangement can be made to finance development and construction of the Project, or if there are changes that could be made to the application to enhance the likelihood of an award of Tax Credits for the Project. The Parties understand and agree that the Housing Authority may enter into separate disposition and development agreements for affordable housing projects which may impact the tax credit financing. Accordingly, Developer agrees to coordinate its application for such funding with the Housing Authority and other housing developers identified by the Housing Authority, to allow for the most competitive financing of all three (3) projects. Following such meet and confer period, unless the parties have agreed to an alternative arrangement to finance the Project, Dev eloper agrees to use commercially reasonably efforts to submit an application for an allocation of 4% Tax Credits for the next successive round of TCAC’s allocation meetings. If Developer does not receive an allocation Tax Credits as a result of such third application, Developer agrees to use commercially reasonably efforts to submit an application for an allocation of Tax Credits in the next two consecutive rounds of TCAC’s allocation meetings. If Developer does not receive an allocation of Tax Credits as a result of all five rounds of applications, the Parties agree to meet and confer in good faith for a period of 90 days to determine if a feasible and mutually acceptable alternate arrangement can be made to finance development and construction of the Proj ect. If no agreement is reached by the Parties within such 90-day period regarding the alternative courses of action described in the preceding sentence, this Agreement may be terminated upon 15 days’ 18-57
ARTICLE VI.

41 written notice by one Party to the other Party. Any agreement that is reached between the Parties on an alternative financing plan for the Project must be memorialized in an implementation agreement to this Agreement, which is subject to approval and execution by Housing Authority’s Executive Director. Except if such failure is a result of an Unavoidable Delay, if Developer fails to make the required applications to TCAC, then the Housing Authority or the Developer may terminate this Agreement upon 15 days’ written notice to the other Party. Failure of Developer to receive an award of Tax Credits will not constitute an Event of Default under the terms of this Agreement, unless due to the intentional misconduct of Developer.

VI.1.2 P
ermanent Loan . Prior to the Close of Escrow, Developer shall obtain for the Housing Authority’s review and approval, which may be withheld or conditioned in Housing Authority’s reasonable discretion and which shall not be unreasonably delayed, a conditional forward loan commitment for each Permanent Loan.

VI.2 Project Budget.

The Developer shall provide the Housing Authority a Project Budget prior to submittal of Project Entitlements for its reasonable approval, which shall be prepared based on the best, good faith estimate of Developer of the costs which are likely to be incurred for the Project . Parties recognize that events and circumstances not currently contemplated, some of which are outside of the control of the Developer, could result in changes in the Project Costs, necessitating changes in the Project Budget. By way of illustration, the Parties recognize that Project Costs will change at such time as the Developer is able to solicit bids from contractors and subcontractors based on actual, approved Plans and Specifications for construction of the Project. Project Costs may also change given the availability or lack of availability of construction materials, cost increases for labor or materials, or change in fees and interest rates, none of which may be final until close to the time of the Close of Escrow. To the extent that Developer is required to make any material changes to the Project Budget, Developer must promptly submit a revised Project Budget to the Housing Authority Executive Director for review and approval, which review and approval shall not be unreasonably withheld, conditioned or delayed, as to the sufficiency of the financing secured by Developer to meet the revised Project Costs. A material change is a change or cumulative changes that causes the total Project Costs, or any line item in the Project Budget with a cost exceeding $50,000, to increase or decrease by more than 10% from what is shown in the Project Budget.

VI.3 O
nly Permitted Exceptions. Developer shall not record and shall not allow to be recorded against the Property any Security Instrument, lien or other encumbrance that is not a Permitted Exception. Developer shall remove or cause to be removed, any non-Permitted Exception made or recorded against the Property or must assure the complete satisfaction of any such non-Permitted Exception to the satisfaction of the Housing Authority, in the Housing Authority’s sole and absolute discretion, or provide other security acceptable to the Housing Authority, or a statutory bond resulting in removal of such lien. The covenants of Developer set forth in this Section regarding recordation of encumbrances on the Property shall run with title to 18-58

42 the Property and bind successive owners of the Property until recordation (or deemed issuance) of the Certificate of Completion for the Project.

VI.4 H ousing Authority Right to Discharge Prohibited Encumbrances. After 60 calendar days’ notice to Developer of a non-Permitted Exception and provided that Developer has not caused such non-Permitted Exception to be removed, insured, indemnified against or bonded against pursuant to Section VI.3, the Housing Authority will have the right, but not the obligation, to satisfy or remove any non-Permitted Exception against the Property or the Project and receive reimbursement from Developer for any reasonable amounts paid or incurred in satisfying or removing any such non-Permitted Exception, upon demand. Any reasonable amount expended by the Housing Authority to discharge a non-Permitted Exception that is not reimbursed to the Housing Authority by Developer within 30 calendar days following written demand for payment from the Housing Authority will accrue interest at an annual rate equal to the lesser of 8% per annum or the maximum rate of interest allowed by law under the circumstances, until paid in full. Nothing in this Section VI.4, t hough, will require Developer to
pay or make provisions for the payment of any tax, assessment, lien or charge of which Developer is in the process of contesting the validity or amount, in good faith, and so long as such contest will not subject all or any portion of the Property to forfeiture or sale.

VI.5 R
ights of Lender and Housing Authority Regarding Permitted Security Instruments; Notice of Liens. The Developer will promptly notify the Housing Authority of any Security Instrument or lien asserted against or attached to all or any portion of the Project or the Property, other than as listed in Section III.7, prior to the date of issuance of a Certificate of Completion for the Project, whether by voluntary act of Developer or otherwise; provided, however, that no notice of filing of preliminary notices or mechanic’s liens need be given by Developer to the Housing Authority, prior to suit being filed to foreclose any such mechanic’s lien.

VI.5.0 Notice of Default to Lenders . Wh
enever the Housing Authority delivers
any notice of default to Developer under this Agreement, the Housing Authority must send a copy of such notice of default to the Tax Credit Investor and to each Lender holding a Permitted Security Instrument of which the Housing Authority has received notice and a contact address for transmittal of such notices. The Tax Credit Investor and each such Lender will have the right, at its option, to commence the cure or remedy of any default of Developer set forth in such notice and to diligently and continuously proceed with such cure or remedy such default, within the cure period allowed to Developer under this Agreement, plus an additional 60 days. The Housing Authority will accept performance by the Tax Credit Investor or a Lender with the same force and effect as if furnished by Developer. If such default can only be remedied or cured by the Tax Credit Investor replacing the general partner of the limited partnership or by the Lender upon obtaining possession of the Property, the Housing Authority must allow such party to remedy or cure such default within 90 days after obtaining possession of the Property or after the general partner is replaced, as applicable. If the default reasonably requires more than 90 days to cure, however, then the time available to the Tax Credit Investor or Lender to cure pursuant to this Section VI.5 w ill
be the reasonable time required to complete such cure, as long as such party has commenced the cure of the default within such 90-day period and diligently pursues the cure to completion. During such extension of time, the Housing Authority shall not terminate this Agreement or exercise other remedies under this Agreement by reason of such default. All Developer specific defaults shall be 18-59

43 deemed cured upon Transfer of Developer’s interest in the entire Property to the Tax Credit Investor or Lender, its assignee or nominee, pursuant to exercise of remedies by such party . In addition, any Tax Credit Investor or Lender properly completing the Project with the consent of the Housing Authority (pursuant to the process set forth below in this Section 6.6) shall be entitled, upon written request made to the Housing Authority, to a Certificate of Completion from the Housing Authority. Nothing contained in this Agreement will be deemed to permit, authorize or require any Lender or Tax Credit Investor to undertake or continue the construction or installation of any portion of the Project (beyond the extent necessary to conserve or protect improvements or construction already made) prior to or after acquiring title to or possession of the entire Property or the Project , without expressly assuming Developer’s obligations under this Agreement by written agreement reasonably satisfactory to the Housing Authority, in which such party agrees to complete the Project in the manner provided in this Agreement, subject to time extensions as reasonably required by such party. Any such party desiring to complete the Project must provide the Housing Authority with evidence reasonably satisfactory to the Housing Authority that such party has the qualifications (or will engage one or more licensed contractor(s) or consultant(s) with such qualifications) and financial capability necessary to perform such obligations.

VI.5.1 N
o Termination of Permitted Security Instruments by Default . An Event of Default by Developer under this Agreement shall not defeat or render invalid the lien of any Permitted Security Instrument made in good faith and for value as to all or any part of the Property, whether or not the Lender is subordinated to this Agreement; but unless otherwise provided in this Agreement, this Agreement shall be binding and effective against any owner of the Property whose title thereto is acquired pursuant to exercise of remedies under a Permitted Security Instrument or from a person or entity exercising any such remedies.

VI.5.2 Lender Rights on Termination or Modification . N o termination of this
Agreement will be binding upon a Lender unless the termination occurs after notice to such Lender and such Lender’s failure to cure all then existing defaults under this Agreement (except any Developer specific defaults ) pursuant to this Section VI.5 , or with such Lender’s prior written
consent. No modification of this Agreement that materially affects the rights of a Lender will be binding upon the Lender without its prior written consent.

VI.5.3 N o Construction Obligation of Lender . No Lender or Tax Credit Investor will be obligated by the provisions of this Agreement to construct or complete the development of the Project or to guarantee such construction or completion, but may do so pursuant to and in accordance with this Section 6.6. Nothing in this Agreement will be deemed to construe, permit, or authorize any person or entity to devote all or any portion of the Property to any uses, or to construct any improvements thereon, other than those uses or the Project provided for or authorized by this Agreement.

VI.5.4 Housing Authority R
ight to Cure Obligations . In the event of a default
by Developer under any Permitted Security Instrument prior to the date of issuance of a Certificate of Completion for the Project where the Lender has not exercised its option to complete the Project under Section VI.5.0, the Housing Authority m
ay cure the default of Developer under the
applicable Permitted Security Instrument, but is under no obligation to do so, prior to completion of any sale or foreclosure of all or any portion of the Property under the applicable Permitted Security Instrument. The Housing Authority shall be entitled to reimbursement from Developer of 18-60

44 all costs and reasonable expenses incurred by the Housing Authority in curing any default of Developer under any Permitted Security Instrument, under demand. Any amount expended by the Housing Authority to cure a default of Developer under any Permitted Security Instrument that is not reimbursed to the Housing Authority by Developer within 30 calendar days after such notice to Developer, shall accrue interest at an annual rate equal to the lesser of 8 % per annum or the maximum rate of interest allowed by law under the circumstances until paid in full.

VI.5.5 Foreclosure of Permitted Security Instrument .

Foreclosure of any
Permitted Security Instr ument, whether by judicial proceedings or by power of sale, or any conveyance by deed in lieu of foreclosure, shall not require the consent of the Housing Authority or constitute a default under this Agreement.

DEFAULTS, REMEDIES AND TERMINATION
VII.1 Defaul–s - General. Subject to any extensions of time provided for in this Agreement, failure or delay by a Party to perform any term or provision of this Agreement within the time required therefore shall constitute an “Event of Default” under this Agreement; provided, however, that if a Party otherwise in default commences to cure, correct or remedy such default within 30 calendar days after receipt of written notice from the injured Party specifying such default and shall diligently and continuously prosecute such cure, correction or remedy to completion (and where any time limits for the completion of such cure, correction or remedy are specifically set forth in this Agreement, then within said time limits), such Party shall not be deemed to be in default under this Agreement and no Event of Default shall be deemed to have occurred; provided, however, that if the default reasonably requires more than 30 days to cure, then the time available to the Party otherwise in default to cure pursuant to this Section VII.1 shall be the reasonable time required to complete such cure, as long as the Party otherwise in default has commenced the cure of the default within such 30- day period and diligently pursues the cure to completion.

VII.1.2 The
injured Party shall give written notice of default to the Party in default, specifying the default complained of by the non-defaulting Party. Failure or delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default.

Delays by any Party in asserting any of its rights and/or remedies will not deprive that Party of its right to institute and maintain any actions or proceedings that it may reasonably deem necessary to protect, assert or enforce any such rights or remedies.

VII.1.3 In addition to other acts or omissions of the Developer that may legally or equitably constitute a default or breach of this Agreement, the occurrence of any of the following specific events prior to the issuance of a Certificate of Completion for the Project, shall constitute an “Event of Default” under this Agreement and shall not be subject to the notice and cure provisions of Section VII.1.1:

VII.1.3.1 Any material default by the Developer under any Permitted Security Instrument for any purpose or reason that remains uncured following expiration of any applicable cure period under such Permitted Security Instrument. 18-61
ARTICLE VII.

45 VII.1.3.2 Any representation, warranty or disclosure made to the Housing Authority by the Developer regarding this Agreement or the Project is materially false.

VII.1.3.3 There occurs any event of dissolution, reorganization or termination of the Developer that adversely and materially affects the operation or value of the Property or the Project, and such event is not corrected within 5 business days following written notice of such event from the Housing Authority to the Developer.

VII.1.3.4 The Developer Transfers its interest in this
Agreement, the Property, or the Project, or any portion thereof, whether voluntarily or involuntarily or by operation of law, in violation of the terms and conditions of this Agreement and such action is not cured within the period prescribed in Section VIII.2.2.

VII.1.3.5 The Developer becomes insolvent or a receiver is appointed to conduct the affairs of the Developer under state or federal law.

VII.1.3.6 The Developer’s legal entity status or right to transact business in California is suspended or terminated and such event is not corrected within 5 business days following written notice of such event from the Housing Authority to Developer.

VII.2 D
EVELOPER’S ELECTION RE: SPECIFIC ENFORCEMENT OF

AGREEMENT OR WAIVER OF RIGHT TO SPECIFIC PERFORMANCE AND LIMITATION ON RECOVERY OF DAMAGES PRIOR TO CLOSE OF ESCROW.

UPON THE OCCURRENCE OF AN EVENT OF DEFAULT PERTAINING TO THE

CONVEYANCE OF THE PROPERTY BY THE HOUSING AUTHORITY UNDER THIS

AGREEMENT PRIOR TO CLOSE OF ESCROW, THE DEVELOPER SHALL, AS ITS SOLE

AND EXCLUSIVE REMEDY, HAVE THE RIGHT TO EXERCISE ONE OF THE ALTERNATIVE REMEDIES DESCRIBED IN SECTIONS VII.2.1 AND V II.2.2. THE
DEVELOPER’S ELECTION, ONCE MADE, SHALL BE IRREVOCABLE.

VII.2.1 W AIVER OF RIGHT TO SPECIFIC PERFORMANCE AND
LIMITATION ON RECOVERY OF DAMAGES . THE DEVELOPER MAY WAIVE THE REMEDY SET FORTH IN SECTION VII.2.2 AND MAY CANCEL THE ESCROW PURSUANT TO SECTION III.10. UPON CANCELLATION OF THE ESCROW, THE

DEVELOPER SHALL BE RELIEVED OF ANY OBLIGATION UNDER THIS AGREEMENT

TO PURCHASE OR ACCEPT TITLE TO THE PROPERTY AND ANY SUCH ESCROW

CANCELLATION SHALL BE WITHOUT ANY LIABILITY OF THE DEVELOPER TO THE HOUSING AUTHORITY OR ANY OTHER PERSON ARISING FROM SUCH ACTIONS.

THE DEVELOPER SHALL BE LIMITED TO RECOVERING ANY AMOUNTS ACTUALLY

EXPENDED BY THE DEVELOPER IN REASONABLE RELIANCE ON THIS AGREEMENT

PRIOR TO THE DATE OF THE OCCURRENCE OF THE EVENT OF DEFAULT BY THE HOUSING AUTHORITY, NOT TO EXCEED $1,000. THE DEVELOPER WA IVES ANY

RIGHT TO RECOVER ANY OTHER SUMS FROM THE HOUSING AUTHORITY ARISING

FROM AN EVENT OF DEFAULT BY THE HOUSING AUTHORITY PRIOR TO THE CLOSE OF ESCROW. THE DEVELOPER ACKNOWLEDGES THE PROTECTIONS OF CIVIL CODE 18-62

46 SECTION 1542 RELATIVE TO THE WAIVER AND RELEASE CONTAINED IN THIS SECTION VII.2.1, WHICH CIVIL CODE SECTION READS AS FOLLOWS:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS

WHICH 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.”

BY INITIALING BELOW, THE DEVELOPER KNOWINGLY AND VOLUNTARILY WAIVES THE PROVISIONS OF SECTION 1542 SOLELY IN CONNECTION WITH THE WAIVERS AND RELEASES OF THIS SECTION VII.2.1.

DEVELOPER’S INITIALS ____________

IN CONNECTION WITH THE WAIVERS IN THIS SECTION VII.2.1, THE

DEVELOPER FURTHER WAIVES THE RIGHT TO RECORD A NOTICE OF PENDENCY

OF ACTION IN CONNECTION WITH ANY ACTION OR PROCEEDING BY DEVELOPER

TO BE REIMBURSED BY THE HOUSING AUTHORITY AS PROVIDED IN THIS SECTION VII.2.1.

VII.2.2
SPECIFIC PERFORMANCE . THE DEVELOPER MAY
WAIVE THE REMEDIES SET FORTH IN SECTION VII.2.1 AND, IN ACCORDANCE WITH CIVIL CODE SECTION 3384, ET SEQ., INSTITUTE AN ACTION AGAINST THE HOUSING

AUTHORITY FOR SPECIFIC PERFORMANCE OF THE TERMS OR PROVISIONS OF THIS

AGREEMENT WHICH WERE TO HAVE BEEN COMPLETED BY THE HOUSING AUTHORITY PRIOR TO THE CLOSE OF ESCROW.

VII.3 OPTION TO REPURCHASE, REENTER AND REPOSSESS.

VII.3.1 Following the close of escrow, if this Agreement is terminated pursuant to Section 7.4 and such termination occurs prior to issuance of a Certificate of Occupancy for the i mprovements, the Housing Authority shall have the additional right at its option to repurchase, reenter and take possession of any portion of the Property then owned by the Developer with all improvements thereon. From and after the issuance of a Certificate of Occupancy for the i mprovements and the recordation of the Notice of Completion, the remedies set forth in this Section VII.4 shall no longer be available to the Housing Authority under any circumstances. The recordation of the Notice of Completion shall be conclusive evidence that the rights under this Section VII.4 have been terminated.

7.3.2 Such right to repurchase, reenter and repossess, to the extent provided in this Agreement, shall be subordinate and subject to and be limited by and shall not defeat, render invalid or limit (1) any approved security financing interest permitted by this 18-63

47 Agreement and under the financing plan; or (2) any rights or interest provided in this Agreement for the protection of the holder of such security financing interests.

VII.4 To exercise its right to repurchase, reenter and take Property owned by the Developer, the Housing Authority shall pay to the Developer in cash an amount equal to:

VII.4.1 The Purchase Price paid to the Housing Authority for the Property; plus

VII.4.2 The reasonable costs actually expended by the Developer in undertaking the entitlement of the Property to construct the Improvements, construction of the portion of the Improvements existing on the Property at the time of the repurchase, reentry and repossession; less

VII.4.3 Any gains or income withdrawn or made by the Developer from the Property or the improvements thereon; less

VII.4.4 The value of any unpaid liens or encumbrances on the Property which the Housing Authority assumes or takes subject to said encumbrances.

VII.5 No Building Permit upon Developer Default. No building permit shall be issued or building permit application accepted for any structure or improvement on the Property after Developer is determined by a court of competent jurisdiction to be in default of any of the material terms and conditions of this Agreement, until such default thereafter is cured by Developer or by any Lender or Tax Credit Investor which has the option to cure or remedy a Developer deficit or is waived by Housing Authority. If Housing Authority lawfully terminates this Agreement because of Developer’s default, then Housing Authority shall retain any and all benefits, including without limitation any money, improvements, structures, easements or dedications received by Housing Authority pursuant to any term or condition of this Agreement, and/or Project entitlements, subject to the right of secured lenders and all other persons or entities holding a perfected security interest thereto.

VII.6 Legal Actions.

VII.6.1 Except as otherwise provided in Section VII.2.1, any Party may institute legal action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy available to that Party under this Agreement or at law or in equity.

Such legal actions must be instituted in the Superior Court of the State of California in and for the County of Riverside , California, in any other appropriate court within the County of Riverside , California.

VII.6.0 The procedural and substantive laws of the State of California shall govern the interpretation and enforcement of this Agreement, without regard to conflicts of laws 18-64

48 principles. The Parties acknowledge and agree that this Agreement is entered into, is to be fully performed in and relates to real property located in the City of Rancho Mirage, County of Riverside, California.

VII.7 R ights and Remedies are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the Parties set forth in this ARTICLE VII a re non- exclusive and cumulative, and the exercise by any Party 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 the other Party.

VII.8 D
eveloper Indemnification of the Housing Authority. In addition to any other specific indemnification or defense obligations of the Developer set forth in this Agreement, the Developer agrees to indemnify, defend (upon written request by the Housing Authority and with counsel reasonably acceptable to the Housing Authority) and hold harmless the Indemnified Parties, from any and all losses, liabilities, charges, damages, claims, liens, causes of action, awards, judgments, costs and expenses, including, but not limited to reasonable attorney’s fees of counsel retained by the Indemnified Parties, expert fees, costs of staff time, and investigation costs, of whatever kind or nature (“Claims”), that are in any manner directly or indirectly caused, occasioned or contributed to in whole or in part, through any act, omission, fault or negligence, whether active or passive, of the Developer or the Developer’s officers, agents, employees, independent contractors or subcontractors of any tier, relating in any manner to this Agreement, any work to be performed by the Developer related to this Agreement, the Property, or the Project, or any authority or obligation exercised or undertaken by the Developer under this Agreement, except to the extent caused by the active negligence or willful misconduct of any of the Indemnified Parties. Without limiting the generality of the foregoing, the Developer’s obligation to indemnify the Indemnified Parties will include injury or death to any person or persons, damage to any property, regardless of where located, including the property of the Indemnified Parties, any workers’ compensation or prevailing wage determination, claim or suit or any other matter arising from or connected with any goods or materials provided or services or labor performed regarding the Project or the Property on behalf of the Developer by any person or entity. Additionally, Developer shall defend, indemnify and hold harmless Indemnified Parties from and against any and all liabilities, demands, claims, actions or proceedings and costs and expenses incidental thereto (including costs of defense, settlement and reasonable attorn’ys' fees), which any or all of them may suffer, incur, be responsible for or pay out as a result of or in connection with any challenge to the legality, validity or adequacy of any of the following: (i) any prior agreements by and between Housing Authority and Developer; (ii) this Agreement and the concurrent and subsequent permits, licenses and entitlements approved by Housing Authority or City; (iii) any proceedings or other actions undertaken by Housing Authority in connection with the adoption or approval of any of the above. In the event of any administrative, legal, equitable action or other proceeding instituted by any third party (including without limitation a governmental entity or official) challenging the legality, validity or adequacy of any of the above 18-65

49 items, any portion thereof, and/or any provision of this Agreement, the Parties shall mutually cooperate with each other in defense of said action or proceeding.

GENERAL PROVISIONS.

VIII.1 Incorporation of Recitals. The Recitals set forth preceding this Agreement are true and correct and are incorporated into this Agreement in their entirety by this reference.

VIII.2 Restrictions on Transfers. The Developer acknowledges that the qualifications and identity of the Developer are of particular importance to the Housing Authority, that the Housing Authority has relied and is relying on the specific qualifications and identity of the Developer in entering into this Agreement with the Developer and, as a consequence, Transfers are permitted only as expressly provided in this Agreement. The Developer must promptly notify the Housing Authority in writing of any and all changes whatsoever in the identity of the business entities or individuals either comprising or in Control of the Developer, as well as any and all changes in the interest or 49egreegree of Control of the Developer by any such person, of which information the Developer or any of its partners, members or officers are notified or may otherwise have knowledge or information.

VIII.2.2 Exc
ept as expressly permitted in this Agreement, the Developer represents to the Housing Authority that it has not made and agrees that it will not make or create, or suffer to be made or created, any Transfer other than a Permitted Transfer, either voluntarily, involuntarily or by operation of law, until after the recordation of a Certificate of Completion for the Project ; provided, however, that the Housing Authority may approve in its reasonable discretion Transfers other than Permitted Transfers prior t o the recordation of a Certificate of Completion. In deciding whether to approve or disapprove any proposed Transfer, the Housing Authority may consider the proposed transferee’s financial strength and the experience of its senior management in undertaking and successfully completing projects of a similar type and size as the Project. Any Transfer made in contravention of this Section VIII.2 will be voidable at the election of the Housing Authority which may, at its option, terminate this Agreement. In such event, the Housing Authority may exercise any other remedy available to the Housing Authority under the terms of this Agreement, provided, however, that (i) the Housing Authority must first notify the Developer in writing of its intention to terminate this Agreement or to exercise any other remedy, and (ii) the Developer will have 20 calendar days following its receipt of such written notice to commence and, thereafter, diligently and continuously proceed to cure such default and submit evidence of the initiation and satisfactory completion of such cure to the Housing Authority, in a form and substance reasonably satisfactory to the Housing Authority.

VIII.2.3 The Developer will provide the Housing Authority with not less than 30 days prior written notice of any proposed Permitted Transfer which the Developer desires to enter into prior to the recordation of a Certificate of Completion for the Project subject to the Transfer, other than a Permitted Transfer for which Housing Authority approval is required, in which case Developer must give not less than 5 days prior written notice. For Transfers requiring Housing Authority approval, the Developer will have the burden of demonstrating to the Housing 18-66
AR TI CLE VIII.

50 Authority’s reasonable satisfaction that the proposed Permitted Transfer meets the conditions and requirements of this Agreement with respect to Permitted Transfers.

VIII.2.4 Anything in this Agreement to the contrary notwithstanding, the restrictions and prohibitions on Transfers contained in this Section VIII.2 shall terminate upon issuance of a Certificate of Completion for the Project.

VIII.3 N otices, Demands and Communications Between the Parties. Any and all notices, demands or communications submitted by any Party to another Party pursuant to or as required by this Agreement will be proper if in writing and delivered (i) personally, (ii) by a nationally recognized overnight courier service that provides a receipt with the time and date of delivery, (iii) by registered or certified United States Mail, postage prepaid, return receipt requested, to the principal office of the Housing Authority or the Developer, as applicable, as designated below, or (iv) as a PDF or similar attachment to an email, provided that such email attachment will be followed by mailing that same day a copy thereof ordinary U.S. mail, postage prepaid. Such written notices, demands or communications may be sent in the same manner to such other addresses as either Party may from time to time designate. Any such notice, demand or communication will be deemed to be received by the addressee, regardless of whether or when any return receipt is received by the sender or the date set forth on such return receipt: (a) on the day that it is delivered by personal delivery, (b) on the date of delivery by a nationally recognized overnight courier service or via electronic mail, whether accepted or refused, provided that if any notice or any other communication to be delivered by email attachment as provided herein cannot be transmitted because of a problem affecting the receiving party’s computer or if such electronic transfer occurs on other than a business day or is sent after 5pm on a business day, the date of delivery or receipt of such notice or other communication will be extended through the next business day, (c) as shown by the addressee’s return receipt if by certified mail, and as confirmed by the courier service if by courier, or (d) 3 calendar days after it is placed in the United States Mail; provided, however, that if actual delivery occurs after 5:00 p.m., local time where received, or on a non-business day, then such notice or communication so made will be deemed effective on the first business day after the day of actual delivery.

Attorneys for any Party will be entitled to provide any notice that a Party desires to provide or is required to provide hereunder.

VIII.3.2 T
he following are the authorized addresses for the submission of notices, demands or communications to the Parties, unless and until changed by a Party upon written notice to the other Party:

TO DEVELOPER: National Community Renaissance of California Attn: Michael Ruane, President
9692 Haven Avenue
Rancho Cucamonga, CA 91730
(T) (909) 483-2444
[email protected]
[email protected]

18-67

51 USA Properties Fund, a California Corporation
Attn: Geoffrey Brown, President & CEO
3200 Douglas Blvd., Suite 200
Roseville, CA 95661
(T) (916)773-6060
[email protected]
[email protected]

TO HOUSING
AUTHORITY:

COPY TO:
(but such copy will not
constitute notice to
City)
Housing Authority
69825 CA-111
Rancho Mirage, California 92270
Attention: Isaiah Hagerman, Executive Director
(T) (760) 324-4511
Email: [email protected]

Quintanilla & Associates
777 E. Tahquitz Canyon Way, Suite 200-41
Palm Springs, CA 92262
Attention: Colin Kirkpatrick
(T) 760-993-3702
Email: [email protected]

VIII.4 Conflict of Interest. No member, official or employee of the Housing Authority who has any conflict of interest, direct or indirect, related to this Agreement, the Property, or the development or operation of the Project, will participate in any decision relating to this Agreement. The Parties represent and warrant that they do not have knowledge of any such conflict of interest.

VIII.5 Warranty Against Payment of Consideration for Agreement. The Developer represents and warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration to obtain this Agreement. For the purposes of this Section VIII.5, th
ird parties will not include persons to whom fees are paid for professional services, if rendered by attorneys, financial consultants, accountants, engineers, architects and the like when such fees are considered necessary by the Developer.

VIII.6 No
n -liability of Housing Authority, Officials and Employees. No member, official or employee of the Housing Authority will be personally liable to the Developer, or any successor in interest of the Developer, in the event of any default or breach by the Housing Authority under this Agreement or for any amount that may become due to the Developer or to its successor, or on any obligations under the terms of this Agreement, except as may arise from the gross negligence or willful acts of such member, official or employee.

VIII.7 Unavoidable Delay; Extension of Time of Performance. Subject to specific provisions of this Agreement, performance by any Party under this Agreement will not be deemed, or considered to be, in default where any such default is due to an Unavoidable Delay that is not attributable to the fault of the Party claiming an extension of time to perform. An 18-68

52 extension of time for any Unavoidable Delay will be for the period of the Unavoidable Delay and will commence to run from the date of occurrence of the Unavoidable Delay, if the Party asserting the existence of the Unavoidable Delay provides the other Party with written notice of the occurrence of the Unavoidable Delay within 30 days of the commencement of such asserted Unavoidable Delay. Otherwise, the extension of time for an Unavoidable Delay will commence on the date of receipt of written notice of the occurrence of the Unavoidable Delay by the Party not requesting an extension of time to perform due to such Unavoidable Delay.

VIII.7.0 The Parties expressly acknowledge and agree that changes in either general economic conditions or changes in the economic assumptions of either of them that may have provided a basis for entering into this Agreement and that occur at any time after the execution of this Agreement do not constitute an Unavoidable Delay and will not provide any Party with grounds for asserting the existence of an Unavoidable Delay in the performance of any covenant or undertaking arising under this Agreement. Each Party expressly assumes the risk that changes in general economic conditions or changes in such economic assumptions relating to the terms and covenants of this Agreement could impose an inconvenience or hardship on the continued performance of such Party under this Agreement.

VIII.8 I
nspection of Books and Records. The Housing Authority will have the right at all reasonable times, at the Housing Authority’s cost and expense, to inspect the books and records of the Developer pertaining to the Property and/or the Project. The Developer will also have the right at all reasonable times, at the Developer’s sole cost and expense, to inspect the public books and public records of the Housing Authority pertaining to the Property and/or the Project, to the extent relevant to the Developer’s obligations under this Agreement. Nothing in this Section VIII.8
or elsewhere in this Agreement will, however, constitute a waiver or modification of any right or privilege which any Party may have with respect to any document, statement, or other record, including, without limitation, the attorney-client privilege, the attorney work-product privilege, any privilege arising under any state or federal evidentiary code or rule, or any privilege or exclusionary right arising under any state or federal freedom of information or public records disclosure law.

VIII.9 R
eal Estate Commissions. The Housing Authority will not be liable for any real estate commissions, brokerage fees or finder fees that may arise from or be related to this Agreement. The Developer must pay any fees or commissions or other expenses related to retention or employment of any real estate brokers, agents or other professionals which Developer has retained or engaged.

VIII.10 Bi
nding on Successors and Assigns. This Agreement will be binding upon and inure to the benefit of the Parties and their respective heirs, executors, administrators, legal representatives, successors, and assigns.

VIII.11 En
tire Agreement. This Agreement and the attached exhibits constitute the entire understanding and agreement of the parties with respect to the matters set forth in this Agreement.

VIII.11.2 T
his Agreement integrates all of the terms and conditions mentioned in this Agreement or incidental to this Agreement, and supersedes all negotiations or previous 18-69

53 agreements between the Parties with respect to the Property, the Project, and the other subjects addressed in this Agreement.

VIII.11.3 None of the terms, covenants, agreements or conditions set forth in this Agreement will be deemed to be merged with any deed conveying title to the Property and this Agreement will continue in full force and effect before and after such conveyance.

VIII.11.4 All waivers of the provisions of this Agreement and all amendments to this Agreement must be in writing and signed by the authorized representative(s) of all Parties.

VIII.12 E xecution of this Agreement. Following execution this Agreement by the authorized representative(s) of the Developer and prompt delivery of such originals to the Housing Authority, accompanied by an executed Form of Official Action of Developer.

VIII.13 Su
rvival of Indemnity Obligations. All general and specific indemnity and defense obligations of the Parties set forth in this Agreement will survive the expiration or termination of this Agreement, the execution or recordation of the Quitclaim Deed, and/or the issuance and recordation of any Certificate of Completion.

VIII.14 Ti
me Declared to be of the Essence. As to the performance of any obligation hereunder as to which time is a component, the time for the performance of such obligation will be of the essence.

VIII.15 Ap
provals. Except as otherwise provided in this Agreement, approvals required of the Housing Authority or the Developer, or any officers, agents or employees of the Housing Authority or the Developer, will not be unreasonably withheld and approval or disapproval must be given within the time set forth in this Agreement or, if no time is given, within a reasonable time.

VIII.16 Fu
rther Assurances. The Parties agree to reasonably consider such additional actions or the execution of such other documents as may be reasonably necessary or convenient for the financing, development, and operation of the Project, although nothing in this Section 8.16 shall be deemed a representation, guaranty or commitment by any Party to take any action or execute any document.

VIII.17 Ho
using Authority Approvals and Actions. The Housing Authority Executive Director shall have the authority on behalf of the Housing Authority (to the extent not provided otherwise in this Agreement) to make approvals, issue interpretations, waive provisions, grant extensions of time, approve amendments or other modifications to this Agreement, changes to the attached exhibits prior to their execution, and execute documents, including, without limitation, the Notice of Completion, confirmations of subordination, and any documents necessary to implement any changes in the number or affordability of the Qualifying Units, as may be required by TCAC or by a Lender of a Senior Loan or Subordinate Loan, so long as such actions do not reduce the length of affordability of the Qualifying Units or add to the costs incurred or to be incurred by the Housing Authority as specified herein. The Housing Authority Executive Director reserves the right, in his or her sole and absolute discretion, to submit any requested modification, interpretation, amendment or waiver to the Housing Authority Board if the Housing Authority Executive Director reasonably determines or believes 18-70

54 that such action is in the best interest of the Housing Authority.

VIII.18 I nvestor Limited Partner Provisions. If and when the Developer is in the form of a limited partnership and admits a Tax Credit Investor into Developer’s partnership, the Housing Authority agrees to the following provisions for the benefit of the Tax Credit Investor:

VIII.18.1 T he Housing Authority will give the Tax Credit Investor a copy of any notice (at the address provided in a notice by Tax Credit Investor to the Housing Authority) that the Housing Authority gives to the Developer under this Agreement and the Regulatory Agreement, provided that Tax Credit Investor has provided its address and contact information in writing to the Housing Authority;
VIII.18.2 The Housing Authority will give the Tax Credit Investor 30 days after receipt by the Tax Credit Investor of such notice to cure a non-payment of any sum due under the Promissory No–e - Land Loan;
VIII.18.3 The Housing Authority will give the Tax Credit Investor 60 days after receipt by the Tax Credit Investor of such notice to cure any default under this Agreement, the Regulatory Agreement, and the Deed of Trust – Land Loan; VIII.18.4 If a non-monetary default is incapable of being cured within 60 days, the Housing Authority will give the Tax Credit Investor an additional 90 days to cure such default provided the Tax Credit Investor has commenced to cure such default and is diligently proceeding to cure such default through the end of such period;
VIII.18.5 If the Tax Credit Investor makes any such payment or otherwise cures such default, the Housing Authority will accept such action as curing such default with the same force and effect as if such payment or cure were made by the Developer; VIII.18.6 The Housing Authority will permit the Tax Credit Investor to transfer its interest to any person or entity at any time provided that, if at the time of such transfer the Tax Credit Investor has not made 100% of the capital contributions the Tax Credit Investor is required to make to the limited partnership, the Tax Credit Investor shall remain liable to the limited partnership for such capital contributions , except as otherwise set forth in the limited partnership agreement by which the Tax Credit Investor was admitted to the limited partnership; VIII.18.7 The Housing Authority will permit the Tax Credit Investor to remove the general partner of the partnership in accordance with the limited partnership agreement, provided that the substitute general partner is reasonably acceptable to the Housing Authority; and
VIII.18.8 The Housing Authority will permit insurance and condemnation proceeds to be used to rebuild the Project provided that (i) if reasonably required, sufficient funds are provided from other sources to effectively rebuild the Project to a lawful affordable housing multi-family complex, and (ii) subject to the rights of any Lenders of Senior Loans, the Housing Authority will hold all such proceeds and disburse them based on the progress of construction, subject to such additional reasonable conditions as the Housing Authority may impose. 18-71

55 8.19 Covenants Run with the Land. All of the terms, provisions, and obligations contained in this Agreement shall be binding upon Developer and its heirs, successors, and assigns, and all other persons or entities acquiring all or any portion of the Property and/or Project, or any interest therein, whether by operation of law or in any manner whatsoever, and the rights thereof shall inure to the benefit of Housing Authority and its successors and assigns. As such, except for those terms which are expressly satisfied upon the issuance by the Housing Authority of the Certificate of Completion, as applicable, all of the provisions of this Agreement shall be enforceable as equitable servitudes and constitute covenants running with the land pursuant to applicable law, including but not limited to, Section 1468 of the California Civil Code.

Notwithstanding the above, every person who now or hereafter owns or acquires any right, title or interest in or to any portion of the Property and/or Project shall be deemed to have consented and agreed to eve ry provision contained in this Agreement, whether or not any reference to this Agreement is contained in the instrument by which such person acquired an interest in the Property and/or Project.

8.20 Nexus/Reasonable Relationship Challenges. D
eveloper consents to, and waives
any rights it may have now or in the future to challenge the legal validity of, the conditions or requirements set forth in this Agreement including, without limitation, any claim that they constitute an abuse of the police power, violate substantive due process, deny equal protection of the laws, effect a taking of property without payment of just compensation, or impose an unlawful tax.

8.21 Ambiguities or Uncertainties. The parties hereto have mutually negotiated the terms and conditions of this Agreement and each party received independent legal advice from its attorneys with respect to the advisability of executing this Agreement and the meaning of the provisions contained herein. As such, this Agreement is a product of the joint drafting efforts of both parties and neither party shall be deemed to have solely or independently prepared or framed this Agreement. Therefore, any ambiguities or uncertainties are not to be construed against or in favor of either party.

8.22 Joint and Several Liability. If Developer consists of more than one person or party, the obligations and liability imposed under this Agreement shall be joint and several.

[
Signatures on Following Pages]
18-72
65318.50016\34700316.2

S-1

SIGNATURE PAGE
TO

AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT

HOUSING AUTHORITY:

Rancho Mirage Housing Authority
a California public body

Dated:_________________, 2023 By:

Housing Authority Executive Director

ATTEST:

____________________________
Secretary

APPROVED AS TO LEGAL FORM:

By: _______________________
Colin D. Kirkpatrick, General Counsel
18-73
65318.50016\34700316.2

S-2

SIGNATURE PAGE
TO

AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT

DEVELOPER:

National Community Renaissance of California ,
a California nonprofit public benefit corporation

By: ________________________________
Michael Ruane,
President

USA Properties Fund, California corporation

By: ________________________________
Geoffrey Brown,
President and CEO

18-74
I
65318.50016\34700316.2

EXHIBIT A
A-1

EXHIBIT A
TO

AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT

Legal Description of the Property

PARCELA-2

That portion of the property described in Grant Deed recorded November 15, 1983 as Instrument No. 237642, Official Records of Riverside County, State of California, located within the Northeast Quarter of Section 30, Township 4 South, Range 6 East, San Bernardino Meridian, described as follows:

COMMENCING at the center quarter comer of said Section 30 as shown on Record of Survey filed in Book 147, Page 6, of Records of Surveys, Official Records of said County;

Thence North 89°35'36" East 667.17 feet along the south line of the southwest quarter of said northeast quarter of Section 30;

Thence parallel with the east line of the of said southwest quarter North 00°03'04" East 701.97 feet to the
TRUE POINT OF BEGINNING;

Thence continuing along said parallel line, North 00°03'04" East 333.74 feet;

Thence parallel with the south line of said southwest quarter No1th 89°35'36" East 652.62 feet to the east line of said southwest quarter;

Thence South 00°03'04" West 333.74 feet along said east line;

Thence parallel with the south line of said southwest quarter South 89°35'36" West 652.62 feet to the
TRUE POINT OF BEGINNING.

ABOVE DESCRIBED PARCEL A-2 containing 217,800.00 square feet or 5.00 acres, more or less.

18-75
65318.50016\34700316.2

EXHIBIT A
A-2

18-76
------ r
NORTH LINE OF s.w._J'
1/4 OF N.E. 1/4
SEC. 30
T.P.O.B.
1/4 5.W• 1/4 N-[. JO 5fC-
SOUTH LINE CF S. W.
1/4 OF N.E. 1/4
SEC. 30
I
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N89°35 '36 "E 652. 62 '
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N89' 35' 36"E 652. 62'
PARCELA-2

5.00 ACRES±
217,800 SF±
S89° 35' 36"W 652. 62'
C.V.W.O. PARCEL PER GRANT
DEED RECORDED 03/04/1994 AS
INST.#91474, O.R.

N89°35'36"E 652.62'
LOCATED IN POR. OF SEC. 30, T. 4 S., R.6 E., S. 8.M.

NOT A PART
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EAST LI NE OF S. W.
1/4 OF N.E. 1/4
SEC. 30
1/4
sJ · 1/4
NJ· 30 5fC·
0 a N
,"
Sl-£ET 2 OF 2 SHEETS
Michael Baker

INTERNATIONAL
75410 Gerald Ford Drive, Suite 100
Palm Desert, CA 92211
phone: 760-346- 7481 www.mbakerinll.com
65318.50016\34700316.2

EXHIBIT B
B-1

EXHIBIT B
TO

AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT

Scope of Development

Developer intends to develop the Property as a new construction multi -family development consisting of at least 150units; comprised generally of 30% very low income (30% to 50% AMI) and 70% lower income (50% to 80% AMI), with an average of 60% AMI for the restricted units; and one unit set aside for a property manager. To accommodate the number of units sought, Developer may seek a density bonus, incentives to reduce the number of parking spaces, and request for the buildings to be up to three -stories. The proposed project will be located on the approximate 5-acre vacant site in the City of Rancho Mirage, and shall include all required or associated improvements, including but not limited to on- site and off -site improvements, all hardscape and all landscaping.

18-77
I
65318.50016\34700316.2

EXHIBIT
C-1

EXHIBIT C
TO

AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT

SCHEDULE OF PERFORMANCE

It is understood that the foregoing Schedule is subject to all of the terms and conditions of the

It is understood that the foregoing Schedule is subject to all of the terms and conditions of the text of the Agreement. The summary of the items of performance in this Schedule is not intended to supersede or modify the more complete description in the text; in the event of any conflict or inconsistency between this Schedule and the text of the Agreement, the text shall govern.

ITEM OF PERFORMANCE TIME FOR PERFORMANCE

1 Developer submits building plans for
City's review and approval.

Within 45 days of Tax Credit Award.
2 City reviews building plans and issue
comments or approval.

Within 30 business days after submittal.
3 City approves final building plans for
Project and issues Ready to Issue Permit
letter.

Within 150 days after the Tax Credit
Allocation Date.
4 Developer obtains building permits and
commences construction of the Project.

Within 30 days following the Escrow
Closing Date.
5 All of the Funding Conditions are
satisfied.

Within 150 days after the Tax Credit
Allocation Date or such earlier time as
provided in the Agreement with respect to
individual funding conditions.

6 Developer completes construction of the
Project and obtains City approval of
final inspection and Certificate of
Occupancy/Completion from the City
and the Housing Authority, as
applicable.

Within twenty-four (24) months after
commencement of construction.
18-78
65318.50016\34700316.2

EXHIBIT D
D-2

EXHIBIT D

AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT

Form of Quitclaim Deed

[Attached Behind This Page]

[ALL SIGNATURES MUST BE NOTARY ACKNOWLEDGED]
18-79
I
65318.50016\34700316.2

EXHIBIT D
D-3

18-80
I
65318.50016\34700316.2

EXHIBIT E

EXHIBIT E
TO

AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT

Form of Notice of Agreement
[Attached Behind This Page]
18-81
65318.50016\34700316.2

EXHIBIT E
E-1

RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:

Rancho Mirage Housing Authority
69825 CA-111
Rancho Mirage, California 92270
Attn: Housing Authority
Executive Director

Exempt from Recording fee
pursuant to Gov’t Code § 27383

NOTICE OF AGREEMENT

AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT

TO ALL INTERESTED PERSONS PLEASE TAKE NOTICE that the predecessor -in- interest to __________________, a California partnership (the “ Developer”) and the Housing Authority of Rancho Mirage , a California municipal corporation (the “ Housing Authority ”) entered into an agreement entitled Affordable Housing Disposition and Development Agreement, dated as of December 21, 2023 (the “Agreement”). A copy of the Agreement is on file with the Housing Authority and is available for inspection and copying by interested persons as a public record of the Housing Authority at the Housing Authority’s offices located at 69825 CA -111, Rancho Mirage, California 92270, during the Housing Authority’s regular business hours.

The Agreement affects the real property described in Exhibit A a ttached to this Notice of Agreement (the “Property ”). The meaning of defined terms, indicated by initial capitalization, used in this Notice of Agreement shall be the same as the meaning ascribed to such terms in the Agreement.

PLEASE TAKE FURTHER NOTICE that the Agreement contains certain development c
ovenants running with title to the Property and other agreements between the Developer and the Housing Authority affecting the Property, as set forth below (all section references are to the Agreement):

Section IV.1 of the Agreement provides:

4.1 Developer Covenant to Undertake Project. The Developer covenants, for itself, its successors and assigns, to and for the benefit of the Housing Authority, that the Developer will commence and complete the development of the Project on the Property within the time period for such actions set forth in the Schedule of Performance. The Developer covenants and agrees for itself, its successors, and assigns, that the Property will be improved and developed with the Project in substantial conformity with the terms and conditions of this Agreement, the Scope of Development, the Schedule of Performance, any and all plans, specifications and similar development documents required by this Agreement, except for such changes as may be mutually 18-82
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EXHIBIT E
E-2

agreed upon in writing by and among the Parties, and all applicable laws, regulations, orders and conditions of each Governmental Agency with jurisdiction over the Property or the Project. The covenants of this Section IV.1 shall run with the land of the Property until released by recordation of the Certificate of Completion.

Section 5.1 of the Agreement provides:

5.1 Obligation to Refrain from Discrimination . The Developer for itself, its successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that there shall be no discrimination against or segregation of any person, or group of persons, on account of sex, marital status, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall the Developer, itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sub-tenants, sub-lessees or vendees of the Property, except only as may be necessary for Developer to comply with regulatory agreements, covenants and other agreements regulating occupancy of the Project . Subdivision (d) of Section 51 of the Civil Code and subdivision (n), (o), and (p) of Section 12955 of the Government Code shall apply to this Section 5.1 and to Section 5.2.1 below. The covenant of this Section V.1 shall run with the Property and shall be enforceable against the Developer and its successors and assigns in perpetuity.
18-83
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EXHIBIT E
E-3

This NOTICE OF AGREEMENT is dated as of _________________, 202_, and has been executed on behalf of the Developer and the Housing Authority by and through the signatures of their authorized representative(s) set forth below. This Notice of Agreement may be executed in counterparts and when fully executed each counterpart shall be deemed to be one original instrument.

HOUSING AUTHORITY:

Rancho Mirage Housing Authority
a California public body

Dated:_________________, 202_ By:

Housing Authority Executive Director

ATTEST:

____________________________
Secretary

APPROVED AS TO LEGAL FORM:

By: _______________________
Colin D. Kirkpatrick, General Counsel
18-84
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EXHIBIT E
E-4

DEVELOPER:

______________________________________,
a California limited partnership

By: __________________________________
Name:

Title: __________________________________

[ALL SIGNATURES MUST BE NOTARY ACKNOWLEDGED]
18-85
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EXHIBIT E
E-5

STATE OF CALIFORNIA )
)
COUNTY OF __________________ )

On ____________________, before me, ___________________________, Notary Public, personally appeared ______________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

______________________________________
Name: ______________________________
Notary Public

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 18-86
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EXHIBIT E
E-6

STATE OF CALIFORNIA )
)
COUNTY OF __________________ )

On ____________________, before me, ___________________________, Notary Public, personally appeared ______________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the withi n instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

______________________________________
Name: ______________________________
Notary Public

EXHIBIT E
E-7

STATE OF CALIFORNIA )
)
COUNTY OF __________________ )

On ____________________, before me, ___________________________, Notary Public, personally appeared ______________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the wi thin instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

______________________________________
Name: ______________________________
Notary Public

EXHIBIT E
E-8

STATE OF CALIFORNIA )
)
COUNTY OF __________________ )

On ____________________, before me, ___________________________, Notary Public, personally appeared ______________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the wi thin instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

______________________________________
Name: ______________________________
Notary Public

EXHIBIT E
E-9

EXHIBIT A
TO

NOTICE OF AGREEMENT
Legal Description of Property
18-90
I
65318.50016\34700316.2

EXHIBIT F

EXHIBIT F
TO

AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT

Form of Official Action of Developer
[Attached Behind This Page]
18-91
65318.50016\34700316.2

EXHIBIT F
F-1

FORM OF OFFICIAL ACTION OF DEVELOPER

NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA
The undersigned, duly appointed and serving Secretary and General Counsel of National Community Renaissance of California, a California nonprofit public benefit corporation, do hereby certify that National Community Renaissance of California, a California nonprofit public benefit corporation (“National CORE”) will serve as the Developer under the Agreement described below. No consent or approval of any other person is required for the undersigned to make the certifications set forth in this Certificate.

The Developer further certifies that the following named person(s):

Michael Ruane
Michael Finn
Robert Diaz

may each act and sign alone on behalf of National CORE , to bind National CORE , without any additional or further consent of any person, and are each authorized and empowered for and on behalf of and in the name of National CORE, each acting and signing alone, to: (1) sign and deliver that certain Affordable Housing Disposition and Development Agreement, dated as of ____________, 2023 (“Agreement”), regarding the development of certain real property located in the City of Racho Mirage, California, and performance of other obligations of the “Developer” as set forth in the Agreement; (2) sign and deliver all other documents on behalf of the respective entity identified set forth above to be signed or executed in connection with the transactions contemplated in the Agreement; and (3) take all actions on behalf of the respective entity identified above that may be considered necessary to conclude the transactions and complete the development contemplated in the Agreement.

The authority conferred and certified to in this Certificate shall be considered retroactive and any and all acts authorized in this Certificate that were performed before the execution of this Certificate are approved and ratified by the entity identified above. The authority conferred and certified to in this Certificate shall continue in full force and effect until the Housing Authority Executive Director of the Housing Authority of Rancho Mirage receives written notice of the revocation of this Certificate.

National CORE further certifies that the activities covered by the authorities conferred and certified to in this Certificate and the foregoing certifications constitute duly authorized activities of National CORE; that these authorities and certifications are now in full force and effect; and that there is no provision in any document under which National CORE is organized and/or that governs such entity’s continued existence or limits the power of the undersigned to confer the authorities or make the cert ifications set forth in this Certificate, and that the same are in conformity with the provisions of all such documents.
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EXHIBIT F
F-1

Dated: ______________, 202__

DEVELOPER:

National Community Renaissance of California,
a California nonprofit public benefit corporation

By: ________________________________
Robert Diaz, Secretary and General Counsel

FORM OF OFFICIAL ACTION OF DEVELOPER
USA Properties Fund
The undersigned, duly appointed and serving as President and CEO of USA Properties Fund, a California corporation , does hereby certify that USA Properties Fund, a California corporation ( “USA Properties ”) will serve as the Developer under the Agreement described below. No consent or approval of any other person is required for the undersigned to make the certifications set forth in this Certificate.

The Developer further certifies that the following named person(s):

Geoffery Brown

may each act and sign alone on behalf of USA Properties , to bind USA Properties , without any additional or further consent of any person, and are each authorized and empowered for and on behalf of and in the name of National CORE, each acting and signing alone, to: (1) sign and deliver that certain Affordable Housing Disposition and Development Agreement, dated as of ____________, 2023 (“Agreement”), regarding the development of certain real property located in the City of Racho Mirage, California, and performance of other obligations of the “Developer” as set forth in the Agreement; (2) sign and deliver all other documents on behalf of the respective entity identified set forth above to be signed or executed in connection with the transactions contemplated in the Agreement; and (3) take all actions on behalf of the respective entity identified above that may be considered necessary to conclude the transactions and complete the development contemplated in the Agreement.

USA Properties further certifies that the activities covered by the authorities conferred and certified to in this Certificate and the foregoing certifications constitute duly authorized activities of USA Properties; that these authorities and certifications are now in full force and effect; and 18-93
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EXHIBIT F
F-2

that there is no provision in any document under which USA Properties is organized and/or that governs such entity’s continued existence or limits the power of the undersigned to confer the authorities or make the certifications set forth in this Certificate, and that the same are in conformity with the provisions of all such documents.
18-94
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EXHIBIT G

Dated: ______________, 202__

DEVELOPER:

USA Properties Fund, a California Corporation

By: ________________________________
Geoffery Brown, President and CEO

18-95
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EXHIBIT G

EXHIBIT G
TO

AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT

Form of Certificate of Completion
[Attached Behind This Page]
18-96
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EXHIBIT G
G-1

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

______________________________
______________________________
_________________________________
Attn: ______________________

______________________________________________________________________________ Exempt from Recording fee
pursuant to Gov’t Code § 27383

THE HOUSING AUTHORITY OF RANCHO MIRAGE

CERTIFICATE OF COMPLETION

I, __________________, Housing Authority Executive Director of the Housing Authority of Rancho Mirage (the “Housing Authority”) certify that:

Section 1. T he Project required to be constructed in accordance with that certain Affordable Housing Disposition and Development Agreement, dated December 21, 2023 (the “Agreement”), between the Housing Authority and National Community Renaissance of California, a California nonprofit public benefit corporation and USA Properties Fund, a California corporation (collectively, the “Developer”), on that certain real property specifically described in the legal description attached to this Certificate of Completion as Exhibit A (the “Property”), is complete in accordance with the provisions of the Agreement.

This Certificate of Completion constitutes conclusive evidence of the Housing Authority’s de
termination of satisfaction by Developer or its assignee of all obligations under the Agreement to construct and install the Project on the Property, including any and all buildings, parking areas, landscaping areas and related improvements necessary to support or meet any requirements applicable to the Project and its use and occupancy on the Project, whether or not such improvements are located on or off the Property or on other property subject to the Agreement.

Notwithstanding any provision of this Certificate of Completion, the Housing Authority may enforce all provisions of the Agreement and Regulatory Agreement, recorded against the Property by the Developer and the Housing Authority, including but not limited to any covenant of said Agreements surviving this Certificate of Completion in accordance with the terms and conditions of said agreements. The Agreement is an official record of the Housing Authority and a copy of the Agreement may be inspected at the Housing Authority’s office located at 69825 CA -111, Rancho Mirage, CA 92270, during the Housing Authority’s regular business hours.

This Notice of Completion shall not constitute evidence of compliance with, or satisfaction of, any obligation of the Developer to any holder of a Security Financing Interest, including, but not limited to, the holder of a deed of trust securing money loaned to finance 18-97
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EXHIBIT G
G-2

the Property, or any part thereof, and shall not be deemed to be either a notice of completion under the California Civil Code or a certificate of occupancy. This Notice of Completion shall not constitute evidence of compliance with the prevailing wage requirements of California Labor Code Sections 1720 et seq , or the requirements set forth in Section 4.6 of the Disposition Agreement.

Capitalized ter ms used in this Notice of Completion which are not defined herein shall have the meanings given such terms in the Disposition Agreement.

18-98
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65318.50016\34700316.2

EXHIBIT G
G-3

DATED AND ISSUED this _____ day of ______________, 202__.

RANCHO MIRAGE HOUSING AUTHORITY , a
California public body

By: ___________________________________
Name: ___________________________________
Title: ___________________________________

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EXHIBIT G
G-4

By: ___________________________
Executive Director

STATE OF CALIFORNIA )
)
COUNTY OF __________________ )

On ____________________, before me, ___________________________, Notary Public, personally appeared ______________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the wi thin instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

______________________________________
Name: _______________________________
Notary Public

EXHIBIT G
G-5

EXHIBIT A
TO

CERTIFICATE OF COMPLETION

Legal Description of the Property

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EXHIBIT H

EXHIBIT H
TO

AFFORDABILITY COVENANT

[Attached Behind This Page]
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RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:

Rancho Mirage Housing Authority
69825 CA-111
Rancho Mirage, California 92270
Attn: Housing Authority
Executive Director

______________________________________________________________________________ APN SPACE ABOVE FOR RECORDER’S USE ONLY

EXEMPT FROM RECORDING FEE PER
GOVERNMENT CODE §27383

REGULATORY AGREEMENT

by and between

RANCHO MIRAGE HOUSING AUTHORITY,

and

__________________________________________________,
a California limited partnership

[Dated as of _____________, 202__ for reference purposes only]

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REGULATORY AGREEMENT

This REGULATORY AGREEMENT (“Regulatory Agreement” is made and entered into as of ________________, 202__, by and between THE RANCHO MIRAGE HOUSING AUTHORITY, a public body ( “Authority”) and ______________________, LP, a California limited partnership (“Owner”).

RECITALS

A. T
he Authority and the Owner ’s predecessor -in-interest entered into that certain Affordable Housing Disposition and Development Agreement dated as of December 21, 2023, (the “Affordable Housing Agreement ”), which provides that the Authority will convey to the Owner that certain real property more specifically described in Attachment No. 1, incorporated herein by this reference (the “Property ”), subject to the terms and conditions of the Affordable Housing Agreement. Under the Affordable Housing Agreement, the Authority has agreed to provide certain financial assistance to the Owner for acquisition of the Property for development, construction and operation of an approximate 150-unit multifamily affordable residential rental development (the “Project”).

B. T he Authority and the Owner desire that the Project be operated as a multifamily affordable residential rental community on the Property with the residential units made available to Qualified Households at an Affordable Rent as more specifically defined herein. This Regulatory Agreement establishes terms and conditions which govern the operation of the Property.

C. The terms of the Affordable Housing Agreement require that certain covenants and affordability restrictions hereof remain in full force and effect on the Project for a term commencing on the date of recordation of this Regulatory Agreement and continuing for 55 years following the recordation of Certificate of Completion, as defined herein.

NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND

UNDERTAKINGS SET FORTH HEREIN, AND FOR OTHER GOOD AND VALUABLE

CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH IS HEREBY

ACKNOWLEDGED, THE OWNER AND THE AUTHORITY DO HEREBY COVENANT AND AGREE FOR THEMSELVES, THEIR SUCCESSORS AND ASSIGNS AS FOLLOWS:

1. D
efinitions of Certain Terms. as used
in this Regulatory Agreement, the following words and terms will have the meaning as provided in the recitals ABOVE or in this Section 1, unless the specific context of usage of a particular word or term may otherwise require. all initially capitalized terms used and not otherwise defined in the recitals or in this Section will have the meaning ascribed to such term in the Affordable Housing Agreement.

1.1. Adjusted for Family Size Appropriate to the Unit. So long as operation of the 18-104
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Project occurs at a time that a TCAC extended use agreement or regulatory agreement is in place on the Project, occupancy requirements for the Qualifying Units in the Project must be calculated under Title 26, Subtitle A, Section 42(g)(2)(c), Subsections (i) and (ii) of the Internal Revenue Code (that is, 1.5 individuals for each separate bedroom), and when no Federal statute is applicable to the Project, occupancy requirements will have the meaning provided in Health and Safety Code Section 50052.5(h).

1.2. A
ffordable Rent . In reference to each Qualifying Unit, “Affordable Rent,” as defined in California Health and Safety Code Section 50053(b) and accompanying regulations of the California Department of Housing and Community Development (as such law or regulations may be am ended, replaced or renumbered from time -to-time), for an individual or family constituting a Qualified Household, adjusted for family size appropriate to the Qualified Unit, with allowance for utilities and maintenance costs, as such allowan ce may be established by the California Department of Housing and Community Development from time to time.

1.3. Annual Report. The Certification of Continuing Program Compliance attached to this Regulatory Agreement as Attachment No. 3 and incorporated by this reference, or comparable report filed annually by the Owner with TCAC or other governmental agencies.

1.4. Automobile Liability Insurance . Insurance coverage against claims of personal injury (including bodily injury and death) and property damage covering all the Owner owned, leased, hired and non-owned vehicles, with minimum limits for bodily injury and property damage of $1,000,000. Such insurance may be provided by a business or commercial vehicle policy and may be provided through a combination of primary and excess or umbrella policies, all of which will be subject to pre -approval by the Authority, which approval will not be unreasonably withheld, delayed or conditioned.

1.5. Certificate of Completion . T
he written certification of the Authority, in
substantially the form of Exhibit G attached to the Affordable Housing Agreement, certifying that the Project has been completed in compliance with the terms and conditions of the Affordable Housing Agreement.

1.6. Authority Parties . C
ollectively, t he Authority and its commissions, agents, attorneys, officers, employees, and authorized representatives.

1.7. Extremely Low Income Household. An individual or family whose income does not exceed the qualifying limits for extremely low income families, as established and amended from time to time by HUD, and as defined in 24 CFR Section 5.603(b), or as otherwise determined by the California Department of Housing and Community Development pursuant to California Health and Safety Code Section 50106.

1.8. HUD. T
he United States Department of Housing and Urban Development.

1.9. Income Certification Form. The Certification of Tenant Eligibility attached to this Regulatory Agreement as Attachment No. 2 and incorporated by this reference, or comparable income certification form required by TCAC or other governmental agencies. 18-105
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1.10. Liability Insurance. Commercial general liability insurance against claims for bodily injury, personal injury, death, or property damage occurring upon, in, or about the Property, the Project or adjoining streets or passageways, at least as broad as Insurance Services Office Occurrence Form CG0001, with a minimum liability limit of $2,000,000 for any one occurrence and which may be provided through a combination of primary and excess or umbrella insurance policies. If commercial general liability insurance or other form with a general aggregate limit is used, either the general aggregate limit will apply separately to the Project or the general aggregate limit must be twice the required minimum liability limit for any one occurrence.

1.11. Low Income Household. An individual or family whose income does not exceed the qualifying limits for low income families, as established and amended from time to time by HUD and as defined in 24 CFR Section 5.603(b).

1.12. Lower I
ncome Households. An individual or family whose income does not exceed the qualifying limits for lower income households, as established and amended from time to time by HUD and as defined in Health and Safety Code Section 50053(b)(3).

1.13. Management Agent . A
person with significant experience in management of
affordable rental housing projects substantially similar to the Project and that is, at the time, managing other financially self -supporting, successful affordable rental housing projects substantially similar to the Project.

1.14. Manager Unit. A
Unit within the Project reserved exclusively for use by the on-site manager employed by the Owner or the Management Agent, as applicable, which is neither income or occupancy restricted.

1.15. Moderate Income Household. “Persons and families of low or moderate income,” as defined in California Health and Safety Code Section 50093.

1.16. Project. T he operation of a multi -family rental housing project which will include not less than approximately 150 Units, 149 of which must be rented to Qualified Households at Affordable Rents, and all related on- and off-site improvements, as more particularly described in the Affordable Housing Agreement.

1.17. Property Insurance . Insurance providing coverage for the Property and all improvements on or to the Property against loss, damage, or destruction by fire and other hazards encompassed under the broadest form of property insurance coverage then customarily used for like affordable properties in the County of Riverside, excluding earthquake coverage, in an amount equal to 100% of the replacement value (without deduction for depreciation) of all improvements comprising the Project (excluding excavations and foundations) and in any event sufficient to avoid co-insurance and with no co-insurance penalty provision, with “ordinance or law” coverage.

To the extent customary for similar affordable housing properties in Riverside County at the time, such insurance must include coverage for explosion of steam and pressure boilers and similar apparatus located on the Property; an “increased cost of construction” endorsement; and an endorsement covering demolition and cost of debris removal, all subject to policy sublimits.

Property Insurance must also include rental or business interruption insurance in an amount at least 18-106
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equal to the average annual gross income from the Project for the preceding 3 calendar years and providing for a 12-month extended period of indemnity.

1.18. Q ualified Households. An individual or family that (i) intends to reside in a Qualifying Unit; and (ii) whose income does not exceed the maximum income allowable for that Qualifying Unit.

1.19. Qualifying Units .

All approximately 149 Units within the Project restricted to occupancy by Qualified Households as set forth in Section 6 of this Regulatory Agreement.

1.20. Supplemental Security Income Household. An individual or household that qualifies for and receives Supplemental Security Income.

1.21. Tax Credits. A n allocation from TCAC of 4% or 9% federal low income housing tax credits to finance a portion of the costs of the Project, in accordance with Section 42 of the Internal Revenue Code of 1986, as amended, all associated Internal Revenue Service regulations and TCAC regulations.

1.22. TCAC.

The California Tax Credit Allocation Committee or its successor in function.

1.23. Term. T he period of time following the date of recordation of this Regulatory Agreement, and ending on the 55th anniversary of recordation of the Certificate of Completion.

1.24. V
ery -Low Income Household. An individual or family whose income does not exceed the qualifying limits for very low income families, as established and amended from time to time by HUD and defined in 24 CFR Section 5.603(b) or as otherwise determined by the California Department of Housing and Community Development, pursuant to California Health and Safety Code Section 50105.

1.25. Workers Compensation Insurance. Workers compensation insurance complying with the provisions of California law and an employer’s liability insurance policy or endorsement to a liability insurance policy, with a minimum liability limit of $1,000,000 per accident for bodily injury or disease, covering all employees of the Owner.

1.26. 1 bedroom Unit. Any one of the 1 bedroom Units within the Project, if applicable.

1.27. 2 bedroom Unit. Any one of the 2 bedroom Units within the Project, if applicable.

1.28. 3 bedroom Unit. Any one of the 3 bedroom Units within the Project, if applicable.

2. R eservation of Property for Affordable Housing. The Owner covenants and agrees to reserve and restrict the Property for construction of the Project and, following completion of construction, reserve and restrict use and residential occupancy of the Qualifying Units by households who, at the time of initial occupancy of a Qualifying Unit and continuously 18-107
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thereafter (subject to the other provisions of this Regulatory Agreement), until the end of the Term, are members of a Qualifying Household. One Unit within the Project may be used as a Manager Unit at any given time provided that no Qualifying Unit may be used as a Manager Unit.

3. A
ffordable Multi -Family Residential Rental Property Restrictive Covenant. The Owner covenants to and for the benefit of the Authority that the Owner will develop, own, manage and operate, or cause the management and operation of, the Project to provide multi -family residential rental housing in the Qualifying Units only to Qualifying Households at an Affordable Rent. The Owner will not knowingly permit any Qualifying Unit to be used on a transient basis and will not lease or rent any Qualifying Unit for an initial period of less than 12 months. No Qualifying Unit will, at any time, be leased or rented for use as a hotel, motel, time share, dormitory, fraternity house, sorority house, rooming house, hospital, nursing home, sanitary or rest home.

4. Continuous Operation Covenant. The Owner covenants to and for the benefit of the Authority to cause the Project to be continuously operated, in accordance with the other provisions of this Regulatory Agreement, throughout the Term.

5. Abandonment. T
he Owner must not abandon or surrender the operation of all or any part of the Project during the Term, except due to material casualty or condemnation.

6. Rental of Qualifying Units. The Owner covenants that each Qualifying Unit will be occupied or available for occupancy by a Qualifying Household at an Affordable Rent on a continuous basis throughout the Term, in accordance with the following tenant income level mix: [NOTE:
to be completed with project-specific data, before execution and recordation]

6.1. N
ot less than __ of the 1 bedroom Units, __ of the 2 bedroom Units and __ of the 3 bedroom units shall be occupied or available for occupancy by Qualifying Households that are Extremely Low Income Households;

6.2. Not less than __ of the 1 bedroom Units, __ of the 2 bedroom Units and __ of the 3 bedroom Units shall be occupied or available for occupancy by Qualifying Households that are Very Low Income Households; and

6.3. Not less than __ of the 1 bedroom Units, __ of the 2 bedroom Units and __ of the 3 bedroom Units shall be occupied or available for occupancy by Qualified Households that are Lower Income Households.

7. A
ffordable Rent . The monthly rent charged to a Qualifying Household for the occupancy of a Qualifying Unit shall never exceed an Affordable Rent for such Qualifying Unit calculated as set forth in this Regulatory Agreement.

7.1. R ent for Qualifying Units may be increased only once per calendar year, based on changes in Area Median Income; provided that except as otherwise specifically provided in this Regulatory Agreement the rent for each Qualifying Unit must never exceed an Affo rdable Rent for the Qualifying Unit as necessary to maintain the tenant income mix specified in Section 6. 18-108
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7.2. Determination of Qualifying Household income will be made by the Owner at the time of initial application by a household for occupancy of a Qualifying Unit. At the time of initial application, the Owner must require an applicant to complete the Income Cer tification Form and certify the accuracy of the information provided on such form. On the anniversary date of the Qualifying Household’s occupancy of that Qualifying Unit, the Owner will require each Qualifying Household occupying a Qualifying Unit to recertify the Qualifying Household’s income on the Income Certification Form. The Owner will make a good faith effort to verify the accuracy of income information provided in any Income Certification Form by an applicant for occupancy of a Qualifying Unit or by a Qualifying Household occupying a Qualifying Unit, by taking one or more of the following steps, as reasonably required or indicated: (i) obtain an income tax return and copy of each W -2 Wage and Earnings Statement for the most recently concluded income tax year; (ii) conduct a credit reporting agency or similar search; (iii) obtain an income verification form from the applicant’s or the Qualifying Household’s current employer(s); (iv) obtain an income verification form from the United States Social Security Administration and/or the California Department of Social Services, if the applicant or the Qualifying Household receives assistance from either of such agencies; or (v) if the applicant or an adult member of a Qualifying Household is unemployed and has no such income tax return, obtain another form of independent verification. All such verification information must only be obtained by the Owner after obtaining the applicant’s or the Qualifying Household’s written consent for the release of such inform ation to the Owner. Failure to consent in writing to the release of such income verification information to the Owner may disqualify an applicant for occupancy of a Qualifying Unit or be grounds for termination of Qualifying Household’s occupancy of a Qualifying Unit.

7.3. The Qualifying Units are not specifically assigned to any qualifying income category (i.e., Extremely Low Income Household, Very Low Income Household or Lower Income Household). The restricted income level of a particular Qualifying Unit may change as Qualifying Units become vacant, a Qualifying Household tenant’s income changes or other Qualifying Units are occupied by Qualifying Households. In all circumstances, though, the rent for each Qualifying Unit shall be an Affordable Rent for the Qualifying Unit as necessary to maintain the restricted income tenant mix required under Section 6. If, upon any recertification, the income of a previously Qualifying Household exceeds 140% of the qualifying income for a Lower Income Household, then, if permitted by TCAC, the Owner or Management Agent must notify such household that its lease for its Qualifying Unit will not be renewed upon the expiration of the then current term of its lease or rental agreement, unless the household again becomes a Qualifying Household upon recertification prior to such expiration. In any event, if the income category of a Qualifying Household upon recertification is different from the previous income of that Qualifying Household (by way of illustration, if an Extremely Low Income Household becomes a Very Low Income Household or a Very Low Income Household becomes an Extremely Low Income Household; or any similar change in the income of a Qualifying Household tenant of the Project), the Owner or Management Agent must rent the next availabl e Unit to a Qualifying Household with an income level that will maintain the tenant income level mix set forth in Section 6. To the extent the federal low-income housing tax credit requirements conflict with the requirements in this Section 7.3 relative to the continued occupancy by households that do not qualify as Qualifying Households, the federal low-income housing tax credit requirements will apply in place of the provisions in this Section 7.3.
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7.4. The Owner must maintain on file all Income Certification Forms completed by applicants for occupancy of Qualifying Units and by Qualifying Households that occupied or are occupying Qualifying Units in accordance with Section 6 and must make copies of the rent roll and Income Certification Forms available to the Authority for its review and approval within 15 days following Notice to the Owner. All tenant files, Income Certifications, income verification documentation, and any other documents that may contain personal identifying information of any tenant (collectively referred to herein as “Tenant Data”) to be provided by Owner to the Authority or to any third party on the Authority’s behalf, must be made available either on- site where such Tenant Data is maintained, or via an internet-based document sharing platform selected by Owner.

The Authority agrees to comply with all applicable laws with respect to the handling, maintenance and protection of Tenant Data, including, but not limited to, the provisions of Sections 1798.80 to 1798.84 of the California Civil Code.

7.5. The Owner and each Qualifying Household occupying a Qualifying Unit must permit the Authority to conduct inspections of the Property, the Project and each Qualifying Unit from time -to-time, upon 15 days prior written notice to the Owner, for purposes of ve rifying compliance with this Regulatory Agreement.

7.6. The Owner must submit its first Annual Report to the Authority on April 30th of the calendar year immediately following the calendar year in which the final Certificate of Completion for the Project was issued by the Authority. Thereafter, annually on each April 30 th
during the Term, the Owner must submit an Annual Report to the Authority. The Authority must maintain the confidentiality of the information contained in any Annual Report relating to any particular Qualifying Household with the same force and effect as provided in Section 7.4 above.

8. R
ent Increases on Loss of Project Based Vouchers . It is anticipated that certain of the Qualifying Units occupied by or made available for occupancy by Qualifying Households will receive project-based vouchers made available under the Housing Choice Voucher Program (the "Rental Subsidy" ) throughout the Term. If through no fault of the Owner, including, without limitation, change in federal law or an action (or inaction) by Congress, material reduction, termination or nonrenewal of the Rental Subsidy occurs, such that the Rental Subsidy is reduced or is no longer available, Owner must, in anticipation of such loss in Rental Subsidy, use good faith, commercially reasonable efforts for a period of 60 days, to obtain alternative sources of rental subsidies and m ust provide the Authority with weekly progress reports on Owner’s efforts to obtain alternative sources of rental subsidies. If at the end of such 60-day period Owner is unable to secure an alternate source of rental subsidy, notwithstanding anything contained in Sections 6 and 7 of this Agreement to the contrary, the Owner may increase the Affordable Rent on all of such Qualifying Units to an Affordable Rent for Lower Income Households, subject to the following requirements:

8.1. Any such Affordable Rent increase must be pursuant to a transition plan approved by the Authority showing how the Affordable Rent increase will be phased- in, and which Qualifying Units will be subject to the increase. Such Affordable Rent increase must be consistent with remedial measures set forth in California Code of Regulations Title 4, Division 17, Chapter 18-110
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1, Section 10337(a)(3) or successor regulation applicable to California's Federal and State Low Income Housing Tax Credit Program, if applicable;

8.2. At the time Owner requests such an increase in the Affordable Rent, Owner must provide the Authority with a copy of the proposed Annual Operating Budget showing the impact of the loss or reduction of the Rental Subsidy;

8.3. Any subsequent Affordable Rent increases remain subject to Section 7.1 above;

8.4. The number of Qualifying Households occupying Qualifying Units subject to the Affordable Rent increase and the level of Affordable Rent increase may not be greater than the amount reasonably required to ensure that the Project generates sufficient income to cover its operating costs and debt service as shown on the Annual Operating Budget, and as is reasonably necessary to maintain the financial stability of the Project and to permit the Project to meet, among other things, any minimum debt service coverage ratio requirements imposed on the Project by the holder of the Permanent Loan encumbering the Project.

8.5. Owner must continue to use good faith commercially reasonable efforts to obtain alternative sources of rental subsidies and must provide the Authority with annual progress reports on efforts to obtain alternative sources of rental subsidies that would allow the rents on the Qualifying Units occupied by Qualifying Households to be reduced back to the Affordable Rent levels contemplated by this Agreement. Upon receipt of any alternative rental subsidies, Owner must reduce the rents charged which had previously been increased pursuant to this Section 8 back to the Affordable Rents for Qualifying Households calculated as set forth in Section 7 hereof , to the extent that the alternative rental subsidies provide sufficient income to cover the operating costs and debt service coverage requirements of the Project as shown on the Annual Operating Budget.

9. T
he Owner Covenant Regarding Lease of Qualifying Units. The Owner, for itself, its successors and assigns, covenants and agrees that, if any Qualifying Unit is rented or leased during the Term, such rental or lease must be accomplished through a written lease agreement and all of the following restrictions will apply:

9.1. A
Qualifying Household must be the record tenant and only occupant (s) of the Qualifying Unit.

9.2. The lease for each Qualifying Unit will be for an initial term of not less than twelve (12) months.

9.3. Each lease for a Qualifying Unit must contain all of the following provisions:

9.3.1. An agreement authorizing the Owner to immediately terminate the tenancy of a Qualifying Household where one or more members of that Qualifying Household 18-111
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misrepresented any fact material to the qualification of such household as a Qualifying Household;

9.3.2. An agreement providing that each Qualifying Household will be subject to annual certification or recertification of income as a condition to continued occupancy of the Qualifying Unit;

9.3.3. An agreement providing that each Qualifying Household may be subject to rental increases in accordance with this Regulatory Agreement; and

9.3.4. An agreement providing that the Owner will not discriminate on the basis of race, color, creed, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, genetic information or receipt of public assistance or housing assistance in connection with rental of a Qualifying Unit, or in connection with the employment or application for employment of persons for operation and management of the Project, and all contracts, applications and leases entered into for such purposes shall contain similar non-discrimination clauses.

9.4. The Owner may not terminate the tenancy or refuse to renew the lease or rental agreement of a Qualifying Household except for: (i) serious or repeated violations of the terms and conditions of the lease; (ii) because the previously Qualifying Household is no longer a Qualifying Household; (iii) for violation of applicable Federal, State, or local law; or (iv) for other good cause.

The Owner must follow all applicable laws in connection with termination of the tenancy of, or a refusal to renew the lease or rental agreement of, a Qualifying Household.

9.5. T
enant Selection Policies and Criteria . The Owner must adopt written tenant selection policies and criteria that:

9.5.1. a re consistent with the purpose of providing affordable rental housing for Qualifying Households at an Affordable Rent;

9.5.2. are reasonably related to tenant eligibility and ability to perform the obligations of the lease for a Qualifying Unit;

9.5.3. give prompt written notice to any rejected applicant of the grounds for rejection;

9.5.4. provide that all Qualifying Units must be available for occupancy on a continuous basis to Qualifying Households at an Affordable Rent; and

9.5.5. do not give preference to any particular class or group of persons in leasing or renting the Qualifying Units, except to the extent that a tenant must be a Qualifying Household or as may be required by the terms of any agreement that Owner may have entered into for the Project, such as, for example, a program for the Project dealing with tenants who are developmentally disabled individuals.

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10. Non-Discrimination. All Units in the Project shall be available at an Affordable Rent for occupancy on a continuous basis to Qualified Households. Except as otherwise required to comply with a provision of this Regulatory Agreement, the Owner shall not give preference to any particular class or group of persons in renting the Qualified Units in the Project. There shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, or genetic information in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of any Unit. Neither the Owner nor any person claiming under or through the Owner, shall establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of any Unit or in connection with the employment of persons for the operation and management of any Unit, the Project or the Property. All deeds, leases or contracts made or entered into by the Owner as to the Qualifying Unit s, the Project or the Property or any portion thereof, shall contain covenants prohibiting discrimination, as prescribed by this Regulatory Agreement.

11. Equal Housing Notice. Owner must provide a statement in all advertisements, notices and signs for the availability of Qualifying Units for lease or rent to the effect that the Owner is an equal housing opportunity provider, and include an equal housing opportunity logotype in all notices, signs and advertisements in print media for the Qualifying Units.

12. Development and Management of the Project.

12.1. Management of Project . The Owner will be responsible for management of the Project including, without limitation, the selection of Qualified Households, certification and recertification of household size, income, gender and the relation of head of household to the household, of all Qualified Households, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. The Authority will have no responsibility for the management or operation of the Project or the Property. The Project must at all times be managed by a Management Agent reasonably acceptable to the Authority, with demonstrated ability to operate residential rental facilities similar to the Project in a manner that will provide decent, safe, and sanitary housing. For the purposes hereof, if the Owner directly performs the functions of the Management Agent by its employees or by means of a service contract with an entity which is a partner or an affiliate of a par tner in the Owner, such Management Agent will be deemed approved by the Authority. If the Management Agent is an entity or person other than the Owner or an entity owned or controlled by, or which owns and/or controls, the Owner, the Owner must submit for the Authority’s approval the identity of any proposed Management Agent, together with additional information relevant to the background, experience and financial condition of any proposed Management Agent, as reasonably requested by the Authority. If the proposed Management Agent meets the standard for a qualified Management Agent set forth above, the Authority must approve the proposed Management Agent by notifying the Owner in writing within 30 days following the Owner’s written request for such approval. If the proposed Management Agent is disapproved by the Authority within 30 days, such disapproval must state with reasonable specificity the basis for disapproval.
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12.1.1. If the Owner functions as the Management Agent and the Authority determines the Owner has not met its management responsibilities, the Authority will have the right to enter the Project, to review relevant documentation to determine if the Owner is acting in a reasonable manner and, subject to approval of the limited partner of Owner, to require that Owner hire a third party management company acceptable to the Authority.

12.1.2. Any contract for the operation or management of the Project entered into by Owner with a Management Agent must provide that the contract is subject to the provisions of this Regulatory Agreement. If the Project is not being operated and managed in accordance with the requirements and standards of this Regulatory Agreement, following notice from Authority and expiration of any applicable cure period, and subject to the approval by the limited partner of Owner and all applicable Law, Owner shall remove the Ma nagement Agent and replace the Management Agent with a different Management Agent reasonably approved by the Authority, pursuant to Section 12.1. Subject to the terms of this Section 12.1.2, Owner’s failure to remove and replace the Management Agent in any such circumstance will constitute an Event of Default by Owner under this Regulatory Agreement.

12.2. I
nsurance.

12.2.1. Required Insurance. To protect the Authority Parties against all insurable claims resulting from the actions of the Owner in connection with this Regulatory Agreement, the Property and the Project during the Term hereof, the Owner must maintain, or cause the Project to maintain, as an operating cost of the Project, the following insurance (or its then reasonably available equivalent): (a) liability insurance; (b) automobile liability insurance to the extent required by this Regulatory Agreement; (c) property insurance; and (d) workers compensation insurance.

12.2.2. Policy Requirements and Endorsements. All insurance policies required by this Regulatory Agreement must contain (by endorsement or otherwise) the following provisions:

Insured. The Owner’s liability insurance and automobile liability i
nsurance policies must name the Authority Parties as “additional insured.” The Owner’s fire and extended coverage insurance policy must name the Authority as a “loss payee.” The coverage afforded to the Authority Parties must be at least as broad as that afforded to the Owner regarding the Property and the Project and may not contain any terms, conditions, exclusions, or limitations applicable to the Authority Parties that do not apply to the Owner.

Primary Coverage. Any insurance or self-insurance maintained by the Authority Parties will be in excess of all insurance required under this Regulatory Agreement and shall not contribute to any insurance required under this Regulatory Agreement.

Contractual Liability. The Owner’s public liability and property damage insurance policy must contain contractual liability coverage for the Owner’s indemnity obligations under this Regulatory Agreement. Whether the Owner obtains such contractual liability coverage will not relieve the Owner from nor satisfy any indemnity obligation of the Owner under this Regulatory Agreement.
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Deliveries to the Authority. The Owner must deliver to the Authority evidence of all insurance policies required by this Regulatory Agreement. No later than 3 days before any insurance required by this Regulatory Agreement expires, is cancelled or its liability limits are reduced or exhausted, the Owner must deliver to the Authority evidence of the Owner’s continued maintenance of all insurance required to comply with the provisions of this Regulatory Agreement. Owner must forward any notice of cancellation to the Authority within 2 business days from date of receipt by the Owner.

Waiver of Certain Claims. The Owner must cause each insurance carrier providing insurance coverage under this Regulatory Agreement to endorse their applicable policy(ies) with a waiver of subrogation with respect to the Authority Parties, if not already in the policy. To the extent that the Owner obtains insurance with a waiver of subrogation, the parties release each other, and their respective authorized representatives, from any claims for damage to any person or property to the extent such claims are paid by such insurance policies obtained pursuant to and in satisfaction of the provisions of this Regulatory Agreement.

No Claims Made Coverage. All of the insurance required under this Regulatory Agreement must be written on an “occurrence” basis, as applicable.

12.2.3. F
ully Paid and Non- Assessable. All insurance obtained and maintained by the Owner pursuant to this Section 12.2 must be fully paid for and non-assessable. However, such insurance policies may be subject to insurer audits.

12.2.4. Authority Option to Obtain Coverage. During the continuance of an Event of Default arising from the failure of the Owner to carry any insurance required by this Regulatory Agreement, the Authority may, at its option, purchase any such required insurance coverage. In such event, the Authority shall be entitled to immediate payment from the Owner of any premiums and associated reasonable costs paid by the Authority for such insurance coverage. Any amount becoming due and payable to the Authority under this Section 12.2.4 that is not paid within 15 calendar days after written demand from the Authority for payment of such amount, with an explanation of the amounts demanded, will bear interest from the date of the demand until the date paid at the rate of 8 % per annum or the maximum interest rate allowed by applicable law, whichever is less. Any election by the Authority to purchase or not to purchase insurance otherwise required by the terms of this Regulatory Agreement will not relieve the Owner of its obligation to obtain and maintain any insurance coverage required by this Regulatory Agreement.

12.2.5. Separation of Insured. The Owner’s liability insurance and automobile liability insurance policies must provide for separation of insured for the Owner and the Authority Parties. Insurance policies obtained in satisfaction of or in accordance with the requirements of this Regulatory Agreement may provide a cross-suits exclusion for suits between named insureds, but must not exclude suits between named insureds and additional insureds.

12.2.6. Deductibles and Self -I
nsured Retentions. Any deductibles or self -insured
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required by this Section 12.2 may eliminate such deductibles or self-insured retentions with respect to the Authority Parties.

12.2.7. N o Separate Insurance. The Owner may not carry separate or additional insurance concurrent in form or contributing in the event of loss with that required under this Regulatory Agreement, unless the Authority is made an additional insured thereon.

12.2.8. Insurance Independent of Indemnification. The insurance requirements of this Regulatory Agreement are independent of the Owner indemnification and other obligations under this Regulatory Agreement and will not be construed or interpreted in any way to satisfy, restrict, limit, or modify the Owner’s indemnification or other obligations or to limit the Owner’s liability under this Regulatory Agreement, whether within, outside, or in excess of such coverage, and regardless of solvency or insolvency of the insurer that issues the coverage; nor will the provision of such insurance preclude the Authority from taking such other actions as are available to it under any other provision of this Regulatory Agreement or otherwise at law or in equity.

12.2.9. Nature of Insurance. The policies of insurance required by this Regulatory Agreement must be issued by carriers that: (a) are listed in then current “Best’s Key Rating Guide—Property/Casualty—United States & Canada” publication (or its equivalent, if such publication ceases to be published) with a minimum financial strength rating of “A -” and a minimum financial size category of “XI” (exception may be made for the California Compensation Insurance Fund when not specifically rated); and (b) are authorized to do business in California.

The Owner may provide any insurance under a “blanket” or “umbrella” insurance policy, provided that: (i) such policy or a certificate of such policy must specify the amount(s) of the total insurance allocated to the Property and the Project, which amount(s) must equal or exceed the amount(s ) required by this Regulatory Agreement; and (ii) such policy otherwise complies with this Regulatory Agreement.

13. Maintenance of the Project. T
he Owner, for itself, its successors and assigns, hereby covenants and agrees that the exterior areas of the Project which are subject to public view (e.g.: all improvements, paving, walkways, landscaping, and ornamentation) must be maintained in good repair and in a neat, clean and orderly condition, ordinary wear and tear excepted. In the event that at any time during the Term, there is an occurrence of an adverse condition on any area of the Project which is subject to public view in contravention of the general maintenance standard described above (“ Maintenance Deficiency ”), then the Authority may notify the Owner in writing of the Maintenance Deficiency and give the Owner 30 calendar days from the date of such notice to cure the Maintenance Deficiency identified in the notice, or such additional time as reasonably necessary to cure the Maintenance Deficiency, if such Maintenance Deficiency cannot reasonably be cured within such 30-day period. “Maintenance Deficiency” includes, without limitation, the following inadequate or non-conforming property maintenance conditions and/or breaches of residential property use restrictions: (i) failure to properly maintain the windows, structural elements, and painted exterior surface areas of the buildings in the Project in a clean and presentable manner; (ii) failure to keep the common areas of the Project free of accumulated debris, appliances, inoperable motor vehicles or motor vehicle parts, or free of storage of lumber, building materials or equipment not regularly in use on the Property; and (iii) failure to regularly maintain, replace and renew the landscaping in a 18-116
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reasonable condition free of weeds and debris.

13.1. In the event the Owner fails to cure or commence to cure the Maintenance Deficiency within the time allowed, after written notice to the Owner given by Authority no less than 10 calendar days prior to the scheduled date of a public hearing, the Authority may conduct a public hearing in order to verify whether a Maintenance Deficiency exists and whether the Owner has failed to comply with the provision of this Section 13. If, upon the conclusion of a public hearing, the Authority makes a finding that a Maintenance Deficiency exists and that there appears to be non-compliance with the general maintenance standard described above, then the Authority will have the right to enter the Project (exterior areas of the Project which are subject to public view only) and perform all acts necessary to cure the Maintenance Deficiency, or to take other action at law or equity then available to the Authority to accomplish the abatement of the Maintenance Deficiency. Any sum expended by the Authority for the abatement of a Maintenance Deficiency as authorized by th is Section 13.1 will be promptly due and payable to the Authority by Developer.

13.2. Graffiti which is visible from any public right -of-way which is adjacent or contiguous to the Project must be removed by the Owner from any exterior surface of a structure or improvement on the Project by either painting over the evidence of such vandalism with a paint which has been color-matched to the surface on which the paint is applied or removing the same with solvents, detergents or water as appropriate. In the event that graffiti is placed on the Project (exterior areas only) the areas visible from an adjacent or contiguous public right -of-way, and thereafter such graffiti is not removed within no more than 3 business days following the time of its application or the Owner’s actual knowledge of its existence, whichever occurs later, then in such event and without notice to the Owner, the Authority will have the right, but not an obligation, to enter the Project and remove the graffiti. Any sum expended by the Authority to remove graffiti from the Project as authorized by this Section 13.2 will be promptly due and payable to the Authority by Developer.

13.3. C
apital Replacement Reserve Account . The Owner must establish an account for the payment of repair and replacement of capital items (“ Capital Replacement Reserve Account”) in an initial amount required by the holder of the Permanent Loan for the Project or the limited partner of the Owner. Each year thereafter, the Owner must deposit into the Capital Reserve Replacement Account from residual receipts produced from operation of the Project an amount of $___ per Unit per year, or such greater amount as may be required by the holder of the Permanent Loan for the Project or the limited partner of the Owner.

13.3.1. Capital Repairs and Replacements. Capital repairs and replacements which may be paid from the Capital Replacement Reserve Account will include, but not be limited to, the following: wet and dry utilities; roof repair and replacement; stucco repair and replacement; exterior painting; carp et and vinyl or other hard surface flooring replacement; replacement of drapes; replacement of dishwashers, garbage disposals and other interior appliances; repair and replacement of heating, ventilating and air conditioning systems, equipment and components; installation, repair and replacement of solar panels, inverters and related equipment; and pavement and parking area repair or replacement, sealing and restriping. Interior painting and servicing, repair or replacement of interior hardware will be considered ordinary operating expenses for the 18-117
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Project and not capital repair. The Owner may withdraw funds from the Capital Replacement Reserve Account to pay such capital repair and replacement expenses as the Owner may deem necessary for the purposes of meeting the maintenance and replacement obligations described herein. The Capital Replacement Reserve Account must be maintained in a depository insured by an agency of the federal government. Any interest or other earnings from sums deposited into the Capital Replacement Reserve Account will be retained in and added to the balance in said account.

13.3.2. Wi
thdrawals from Reserve Account . On an annual basis, the Owner will notify the Authority of the anticipated amounts which will need to be withdrawn from the Capital Replacement Reserve Account. Amounts so budgeted may be withdrawn by the Owner from the Capital Replacement Reserve Account without Authority approval. Other withdrawals for unbudgeted, unanticipated or emergency Project expenditures may be withdrawn by the Owner without prior the Authority approval, but the Owner must notify the Authority in w riting within 10 calendar days after withdrawal. All such amounts must be expended on the Project and in accordance with this Regulatory Agreement. Other than for budgeted expenditures, withdrawals in excess of $25,000 in any one calendar year must be pre -approved by the Authority in its reasonable discretion, subject to the rights of any Senior Lenders or the limited partner of the Owner.

13.3.3. Documentation. Annually, or more frequently at the Authority’s reasonable request, the Owner will document the level of capital repairs and replacements for the preceding period. The Owner must maintain and provide to Authority as requested documentation showing the quantity and price of items purchased, price of materials and the cost of contracted labor or other services incurred in connection with such capital repair and replacement, and such other items as the Authority may reasonably request.

13.3.4. Capital Needs Assessment . I
f requested in writing by the Authority, the
Owner must deliver to the Authority, for the Authority’s reasonable review and approval, a capital needs assessment (“ CNA”) no more often than every 10 years after the date of issuance of the Certificate of Completion for the Project. Each CNA must include a 10- year capital needs assessment or analysis of replacement reserve requirements prepared by a qualified third party in accordance with reasonable and customary standards for similar affordable housing residential rental projects. The CNA must include an analysis of the Owner’s actual expenditures for capital needs compared to the most recently approved CNA as well as the Owner’s original operating budget and its then-current operating budget.

13.3.5. Displacement of Residents and Relocation .

The Owner must make
reasonable commercial efforts to conduct capital repairs and replacements and ordinary repair and maintenance (collectively, “Repairs”) in a manner that does not results in the displacement of any of the residents of the Units. If any of the Owner’s actions to conduct Repairs result in displacement of any of the Units’ residents, the Owner must notify the Authority in writing prior to c onducting such Repairs, identifying the residents to be displaced, the Units they will be displaced from, and the estimated length of time such residents will be displaced. If the displacement of the residents triggers relocation obligations under applicable state or federal law, the Owner will be responsible to pay any and all such relocation obligations and related expenses. The Owner will comply with all applicable federal, state and local laws, rules and regulations regarding such relocation 18-118
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obligations and related expenses, including any relocation requirements required by the Authority.

The Owner will defend, indemnify and hold harmless the Authority Parties from and against all liability for any relocation obligations and related expenses attributable to any Repairs.

14. C
ovenants to Run With the Land. The Owner and the Authority hereby declare their specific intent that the covenants, reservations and restrictions set forth in this Regulatory Agreement are part of a plan for the promotion and preservation of affordable housing within the territorial jurisdiction of the Authority and that each will be deemed covenants running with title to the Property and will be binding upon the Property and each successor-in-interest of the Owner in the Property for the Term. The Authority and the Owner hereby further declare their understanding and intent that the benefit of such covenants touch and concern the Property by enhancing and increasing the enjoyment and use thereof by the intended beneficiaries of such covenants, reservations and restrictions, and by furthering the affordable housing goals and objectives of the Authority and in order to make the Property available for acquisition by the Owner. The Owner expressly assumes the duty and obligation to perform each of the covenants and to honor each of the reservations and restrictions in this Regulatory Agreement which are Owner’s obligation to perform or comply with. Each and every contract, deed or other instrument hereafter executed covering or conveying the Property or any int erest therein will conclusively be held to have been executed, delivered and accepted subject to such covenants, reservations, and restrictions, regardless of whether such covenants, reservations and restrictions are set forth in such contract, deed or other instrument.

15. [Intentionally Omitted]

16. M eet and Confer Prior to End of Term. Not less than 12 months prior to the end of the Term of this Agreement, the Authority and the Owner must meet and confer to discuss opportunities to extend the Term of this Regulatory Agreement or otherwise maintain the affordability of the Qualifying Units. If after such meet and confer process the Parties are unable to agree upon a means to maintain the affordability of the Qualifying Units, the Parties will further discuss a process to transition the existing residents of the Qualifying Units into suitable replacement housing.

17. Defaults.

17.1. Events of Default. The occurrence of any of the following is a default and will constitute a material breach of this Regulatory Agreement and, if not corrected, cured or remedied in the time period set forth in Section 17.2, will constitute an “Event of Default” hereunder:

17.1.1. f
ailure of the Owner or any person under its direction or control to comply with or perform when due any material term, obligation, covenant or condition contained in this Regulatory Agreement which Owner is obligated to comply with or perform;

17.1.2. any warranty, representation or statement made or furnished to the Authority by the Owner under this Regulatory Agreement that is false or misleading in any material respect (meaning that it materially impacts the consideration that the Authority receives under this Agreement, including but not limited to the affordability of the Qualifying Units) either 18-119
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now or at the time made or furnished;

17.1.3. insolvency, dissolution or termination of the existence of the Owner, appointment of a receiver over any part of the property of the Owner which is not removed within 60 days following appointment, any assignment by Owner for the benefit of creditors, any type of creditor workout or the commencement of any proceeding under any bankruptcy or insolvency laws by or against the Owner; or

17.1.4. an Event of Default pursuant to the Affordable Housing Agreement.

17.2. N
otice of Default . The Authority must give written notice of default to the Owner, in accordance with Section 24, stating that such notice is a “ Notice of Default ”, specifying the default complained of by the Authority and requiring the default to be remedied within 30 calendar days of the date of the Notice of Default. Except as required to protect against further material damage to the Project, the Authority may not institute legal proceedings against the Owner until 30 calendar days have elapsed after pr oviding the Notice of Default to the Owner without a cure or remedy thereof by or on behalf of Owner. Failure or delay in giving a Notice of Default shall not constitute a waiver of any default, nor shall it change the time of occurrence of the default. If the default specified in the Notice of Default is such that it is not reasonably capable of being cured within 30 calendar days, and if the Owner initiates corrective action within said 30- calendar day period and diligently works to effect a cure as soon as reasonably possible thereafter, then the Owner may have such additional time as reasonably necessary to complete the cure of the default prior to exercise by Authority of any remedy available to it for the occurrence of an Event of Default. The Authority shall give the limited partner of the Owner the following notice and cure rights:

17.2.1. T
he Authority will give the limited partner a copy of any Notice of Default (at the limited partner's address provided in a notice by the Owner to the Authority) which the Authority gives to the Owner under this Regulatory Agreement, provided that Owner has provided the address and contact information for the limited partner in writing to the Authority;

17.2.2. The Authority will give the limited partner 30 days after the limited partner's receipt of such Notice to cure a non-payment of any sum due under this Regulatory Agreement;

17.2.3. The Authority will give the limited partner 60 days after the limited partner's receipt of such Notice to cure any other default under this Regulatory Agreement;

17.2.4. If a non -monetary default is incapable of being cured within 60 days, the Authority will give the limited partner an additional 90 days to cure such default provided the limited partner has commenced to cure such default and is diligently proceeding to cure such default through the end of such period; and

17.2.5. If the limited partner makes any such payment or otherwise cures such default, the Authority will accept the same as curing such default with the same force and effect as if such payment or cure were made by the Owner.

17.3. I
naction Not a Waiver of Default. If the Owner fails to take (or commence to take, 18-120
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as applicable) corrective action relating to a default within 30 calendar days following the date it has received a Notice of Default or fails to complete the cure within the additional time provided for above or if the limited partner of Owner fails to complete a cure or remedy of the default within the time set forth above for the limited partner to do so, an Event of Default will be deemed to have occurred. Any failure or delays by the Authority in asserting any of its rights and remedies

17.4. as to any default will not operate as a waiver of any such default or of any such rights or remedies. Delays by the Authority in asserting any of its rights and remedies shall not deprive the Authority of its right to institute and maintain any actions or proceedings which it may reasonably deem necessary to protect, assert or enforce any such rights or remedies.

18. R
emedies . Upon the occurrence of an Event of Default, the Authority shall, in addition to the remedial provisions of Section 12 related to a Maintenance Deficiency at the Property, be entitled to seek any appropriate remedy or damages by initiating legal proceedings as follows:
(i) by mandamus or other suit, action or proceeding at law or in equity, to require the Owner to perform its obligations and covenants hereunder, or enjoin any acts or things which may be unlawful or in violation of the rights of the Authority; or (ii) by other action at law or in equity as necessary or convenient to enforce the obligations, covenants and agreements of the Owner to the Authority.

18.1. Rights and Remedies are Cumulative. The rights and remedies of the Authority as set forth in this Section 18 are cumulative and the exercise by the 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 the Owner.

18.2. Enforcement by Third Parties. No third party shall have any right or power to enforce any provision of this Regulatory Agreement on behalf of the Authority or to compel the Authority to enforce any provision of this Regulatory Agreement against the Owner or the Project.

19. Governing Law. This Regulatory Agreement shall be governed by applicable federal laws and by the laws of the State of California, without regard to its conflicts of laws principles.

20. Amendment. T his Regulatory Agreement may be amended after its recordation only by a written instrument executed by the Owner and the Authority.

21. Attorney’s Fees. In the event that a party to this Regulatory Agreement brings an action to enforce any condition or covenant, representation or warranty in this Regulatory Agreement or otherwise arising out of this Regulatory Agreement, the prevailing party(ies) in such action will be entitled to recover from the other party reasonable attorneys’ fees to be fixed by the court in which a judgment is entered, as well as the costs of such suit.

22. Severability. I
f any provision of this Regulatory Agreement should be declared invalid, inoperative or unenforceable by a final judgment or decree of a court of competent jurisdiction, such invalidity or unenforceability will not affect the remaining parts of this Regulatory Agreement, which are hereby declared by the parties to be severable from any other part which is found by a court to be invalid or unenforceable.
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23. Time is of the Essence. For each provision of this Regulatory Agreement which states a specific amount of time within which the requirements thereof are to be satisfied, time will be deemed to be of the essence.

24. Notices, Demands and Communications Between the Parties. A ny and all notices, demands or communications submitted by any Party to another Party pursuant to or as required by this Regulatory Agreement will be proper, if in writing and delivered (i) personally, (ii) by a nationally recognized overnight courier service that provides a receipt with a time and date of delivery, (iii) by registered or certified United States mail, postage prepaid, return receipt requested, to the principal office of the Authority, the Owner or the limited partner, as applicable, or (iv) as a PDF or similar attachment to an electronic transmittal or email, provided that such attachment and transmittal will be followed that same day by a copy thereof sent ordinary U.S. mail, postage prepaid. Such notices, demands or communications may be sent in the same manner to such other addresses as a Party or a limited partner may from time to time designate. Any such notice, demand or communication will be deemed to be received by the addressee, regardless of whether or when any return receipt is received by the sender or the date set forth on such return receipt; on the day that it is delivered by personal delivery; on the date of delivery by a nationally recognized overnight courier service; or via electronic mail, whether accepted or refused, provided that if any notice or other communication to be delivered electronically as provided herein is sent on a day which is not a business day, or after 5 p.m. on a business day, or cannot be transmitted because of a problem affecting the receiving Party’s computer, the deadline for receiving such notice or other communication will be extended through the next business day; as shown by the addressee’s return receipt if by certified mail; as confirmed b y the courier service if by courier; or 3 calendar days after it is placed in the United States mail. Provided, however, that if actual delivery occurs after 5:00 p.m. local time where received, or on a non-business day, then such notice or communication so made will be deemed effective on the first business day after the day of actual delivery. Rejection, other refusal to accept or the inability to deliver any notice because of a changed address of which no notice was given, or due to any other action by a person or entity to whom notice is sent, will be deemed receipt of the notice. Attorneys for any Party will be entitled to provide any

25. not
ice that a Party desires to provide or is required to provide hereunder.

The following are the authorized addresses for the submission of notices to the parties, as of the date of this Regulatory Agreement:

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To the Authority: Rancho Mirage Housing Authority
69825 CA-111
Rancho Mirage, California 92270
Attn: Executive Director

26. Recording. The parties hereto will cause this Regulatory Agreement to be recorded in the official records of the County of Riverside.

27. No Third Party Beneficiary. No claim as a third -pa rty beneficiary under this Regulatory Agreement by any person, corporation or any other entity, may be made or be valid against the Authority or the Owner.

28. Prohibition Against Transfer.

28.1. Except as expressly provided in the Affordable Housing Agreement, the Owner may not, without prior written approval of the Authority, which may not be unreasonably withheld, delayed or conditioned: (i) assign or attempt to assign this Regulatory Agreement or any right herein; or (ii) make any total or partial sale, transfer, conveyance, lease, leaseback, or assignment of the whole or any part of the Property or the improvements thereon, with the exception of leases of the Units as permitted by this Regulatory Agreement, or permit to be placed on any of the Property any unauthorized mortgage, deed of trust, encumbrance or lien.

28.2. In the absence of specific written agreement or approval by the Authority, no unauthorized sale, transfer, conveyance, lease, leaseback or assignment of the Property will be deemed to relieve the Owner or any other party from any obligations under this Regulatory Agreement.

29. A
uthority Approvals and Actions. The Executive Director will have the authority to make approvals, issue interpretations, waive provisions, grant extensions of time, approve To the Owner:

To the limited partner:
____________________________________
____________________________________
____________________________________
Attn: _______________________________
(T) (___) ______________________
Email: ________________________

_________________________________
_________________________________
_________________________________
_________________, ___ ___________
Attn: ____________________________
(T) ____ - _______
Email: ___________________________

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amendments to this Regulatory Agreement and execute documents on behalf of the Authority (to the extent not provided otherwise in this Regulatory Agreement), including, without limitation, any documents necessary to implement any changes in the number or affordability of the Qualifying Units, as may be required by TCAC, so long as such actions do not reduce the length of affordability of the Qualifying Units or add to the costs incurred or to be incurred by the Authority as specified herein. The Executive Director reserves the right, in his or her sole and absolute discretion, to submit any requested modification, interpretation, amendment or waiver to the Authority Board if the Executive Director determines or believes that such action could increase the r isk, liability or costs to the Authority, or reduce the length of affordability of the Project.

IN WITNESS WHEREOF, the Owner and the Authority have caused this Regulatory Agreement to be signed, acknowledged and attested on their behalf by duly authorized representatives in counterpart original copies which will upon execution by all Parties, be deemed to be one original document.

[Signatures on following pages]

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AUTHORITY SIGNATURE PAGE
TO

REGULATORY AGREEMENT

AUTHORITY:

RANCHO MIRAGE HOUSING AUTHORITY

By:
________________
Executive Director

ATTEST:

Authority Secretary

D
ate: , 202__

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OWNER SIGNATURE PAGE
TO

REGULATORY AGREEMENT

OWNER:
______________, a California limited partnership

By its general partner

By: _________________________________

Name: _______________________________

Title: _______________________________

Dated: _____________, 202__

ATTACHMENT NO. 1
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REGULATORY AGREEMENT

Property Legal Description

[to be inserted]

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ATTACHMENT NO. 2
TO

REGULATORY AGREEMENT

Certification of Tenant Eligibility

NOTE TO PROPERTY OWNER : This form is designed to assist you in computing Annual Income.

Re: ______________, Rancho Mirage, California
I/We, the undersigned, state that I/we have read and answered fully, frankly and personally each of the following questions for all persons who are to occupy the unit being applied for in the property listed above. Listed below are the names of all persons who intend to reside in the unit:

1. 2. 3. 4. 5.

Names of
Members of
Household
Relationship
to Head of
Household Age
Social
Security
Number

Place of
Employment

6. Head of Household (check one):

Mother: ____
Father: ____
Other: _____________ (specify relationship – i.e. legal guardian, sister, brother, etc.)

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Income Computation

7. The total anticipated income, calculated in accordance with the provisions of this Section 7, of all persons over the age of 18 years listed above for the 12-month period beginning the date that I/we plan to move into a unit is $ ____________________.

Included in the total anticipated income listed above are:
(a) all wages and salaries, overtime pay, commissions, fees, tips and bonuses and other compensation for personal services, before payroll deductions; (b) the net income from the operation of a business or profession or from the rental of real or personal property (without deducting expenditures for business expansion or amortization of capital indebtedness or any allowance
for depreciation of capital assets);
(c) interest and dividends (including income from assets excluded below); (d) the full amount of periodic payments received from social security, annuities, insurance policies, retirement funds, pensions, disability or death benefits and other similar types of period receipts, including any lump sum payment for the delayed start of a periodic payment; (e) payments in lieu of earnings, such as unemployment and disability compensation, workmen’s compensation and severance pay;
(f) the maximum amount of public assistance available to the above persons other than the amount of any assistance specifically designated for shelter and utilities; (g) periodic and determinable allowances, such as alimony and child support payments and regular contributions and gifts received from persons not residing in the dwelling; (h) all regular pay, special pay and allowances of a member of the Armed Forces (whether or not living in the dwelling) who is the head of the household or spouse; and (i) any earned income tax credit to the extent that it exceeds income tax liability.

Excluded from such anticipated income are:
(a) casual, sporadic or irregular gifts;
(b) amounts which are specifically for or in reimbursement of medical expenses; (c) lump sum additions to family assets, such as inheritances, insurance payments (including payments under health and accident insurance and workmen’s compensation), capital gains and settlement for personal or property losses;
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(d) amounts of educational scholarship paid directly to the student of the educational institution, and amounts paid by the government to a veteran for use in meeting the costs of tuition, fees, book and equipment. Any amounts of such scholarships, or payments to veterans not used for the above purposes, are to be included in income.

(e) special pay to a household member who is away from home and exposed to hostile fire;
(f) relocation payments under Title 11 of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970;
(g) foster child care payments;
(h) the value of coupon allotments for the purchase of food pursuant to the Food Stamp Act of 1977;
(i) payments to volunteers under the Domestic Volunteer Service Act of 1973; payments received under the Alaska Native Claims Settlement Act. (j) income derived from certain submarginal land of the United States that is held in trust for certain Indian tribes;
(k) payments or allowances made under the Department of Health and Human Services’ Low-Income Home Energy Assistance Program;
(l) payments received from the Job Training Partnership Act; (m) the first $2,000 of per capita shares received from judgment funds awarded by the Indian Claims Commission or the Court of Claims.

8. Do the persons whose income or contributions are included in item 6 above:
(a) have savings, stocks, bonds, equity in real property or other form of capital investment (excluding the values of necessary items of personal property such as furniture and automobiles and interests in Indian trust land)? ___ Yes ____ No; or (b) have they disposed of any assets (other than at a foreclosure or bankruptcy sale) during the last two years at less than fair market value? ___Yes ___No (c) If the answer to (a) or (b) above is yes, does the combined total value of all such assets owned or disposed of by all such persons total more than $5,000? ___Yes ___No (d) If the answer to (c) is yes, state:
(i) the amount of income expected to be derived from such assets in the 12- month period beginning on the date of initial occupancy in the unit that you propose to rent:
$______; and
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ATTACHMENT NO. 2
- 4 -

(ii) the amount of such income, if any, that was included in item 6 above:
$______

9. (a) Are all of the individuals who propose to reside in the unit full -time students*? ____Yes ____No
*A full-time student is an individual enrolled as a full- time student during each of five calendar months during the calendar year in which occupancy of the unit begins at an educational organization which normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance and is not an individual pursuing a full -time course of institutional or farm training under the supervision of an accredited agent of such an educational organization or of a state or political subdivision thereof. (b) If the answer to 8(a) is yes, is at least one of the proposed occupants of the unit a husband and wife entitled to file a joint federal income tax return? ____Yes ____No

10. Neither myself nor any other occupant of the unit I/we propose to rent is the Owner of the property in which the unit is located (hereinafter the “Owner”), has any family relationship to the Owner or owns, directly or indirectly, any interest in the Ownership. For purposes of this section, indirect Ownership by an individual shall mean the Ownership by a family member, the Ownership by a corporation, partnership, estate or trust in proportion to the Owner ship or beneficial interest in such corporation, partnership, estate or trust held by the individual or a family member, and the Ownership, direct or indirect, by a partner of the individual.

11. This certificate is made with the knowledge that it will be relied upon by the Owner to determine maximum income for eligibility to occupy the unit; and I/we declare that all information set forth herein is true, correct and complete and, based upon information I/we deem reliable and that the statement of total anticipated income contained in Section 7 is reasonable and based upon such investigation as the undersigned deemed necessary.

12. I/we will assist the Owner in obtaining any information or documents required to verify the statements made herein, including either an income verification from my/our present employer(s) or copies of federal tax returns for the immediately preceding calendar year.

13. I/we acknowledge that I/we have been advised that the making of any misrepresentation or misstatement in this declaration will constitute a material breach of my/our agreement with the Owner to lease the units and will entitle the Owner to prevent or terminate my/our occupancy of the unit by institution of an action for eviction or other appropriate proceedings. 18-131
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ATTACHMENT NO. 2
- 5 -

14. Housing Issuer Statistical Information (Optional--will be used for reporting purposes only):

Marital Status: _____________________________
Race (Head of Household)
White ________ Asian ________ Hispanic ________
African-American ________ Native American ________ Other ________ Physical Disability: Yes ________ No ________
I/we declare under penalty of perjury that the foregoing is true and correct.

Executed this ________ day of__________, ____ in the County of Los Angeles, California.

____________________________________
Applicant
____________________________________
Applicant

[Signature of all persons over the age of 18 years listed in number 2 above required] 18-132
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ATTACHMENT NO. 2
- 6 -

FOR COMPLETION BY PROPERTY THE OWNER ONLY:

1. Calculation of eligible income:
(a) Enter amount entered for entire household in 6 above: $______________ (b) (1) If answer to 7(c) above is yes, enter the total amount entered in 7(d)(1), subtract from that figure the amount entered in 7(d)(2) and enter the remaining balance ($_______________);
(2) Multiply the amount entered in 7(c) times the current passbook savings rate to determine what the total annual earnings on the amount in 7(c) would be if invested in passbook savings ($________), subtract from that figure the amount entered in 7(d)(2 ) and enter the remaining balance
(3) Enter at right the greater of the amount calculated under (1) or (2) above:
$_____________;
(c) TOTAL ELIGIBLE INCOME
(Line l(a) plus line 1(b)(3): $________________

2. The amount entered in l(c):
_____ Qualifies the applicant(s) as a Qualified Household. _____ Does not qualify the applicant(s) as Qualified Household.

3. Apartment unit assigned:

Bedroom Size: ______ Rent: $________

4. This apartment unit [was/was not] last occupied for a period of 31 consecutive days by persons whose aggregate anticipated annual income, as certified in the above manner upon their initial occupancy of the apartment unit, qualified them as a Qualified Household.

5. Method used to verify applicant(s) income:
_____ Employer income verification.
_____ Copies of tax returns.
_____ Other (_____________________)
_________________________________
Manager
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ATTACHMENT NO. 2
- 7 -

The undersigned employee has applied for a rental unit located in a project financed in part by the City of Rancho Mirage for persons of very low income. Every income statement of a prospective tenant must be stringently verified. Please indicate below the employee’s current annual income from wages, overtime, bonuses, commissions or any other form of compensation received on a regular basis.

Annual wages ________ Overtime ________ Bonuses ________ Commissions ________
Total current income ____________
I hereby certify that the statements above are true and complete to the best of my knowledge. _____________________________ _______________ ______________________________ Signature Date Title
I hereby grant you permission to disclose my income to ____________________________ in order that they may determine my income eligibility for rental of an apartment at [_____________________].
_____________________________ _______________
Signature Date
Please send to: ________________________________________ ________________________________________
________________________________________
I hereby attach copies of my individual federal and state income tax returns for the immediately preceding calendar year and certify that the information shown in such income tax returns is true and complete to the best of my knowledge.
_____________________________ _______________
Signature Date
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ATTACHMENT NO. 3
1 ATTACHMENT NO. 3
TO

REGULATORY AGREEMENT

Certificate of Continuing Program Compliance
For Annual Reporting Period Ending

The undersigned, _______________, as the authorized representative of _________________ , a California limited partnership (“Owner”), has read and is thoroughly familiar with the provisions of the various documents associated with the financial assistance provided by the City of Rancho Mirage (“City”), as established in numerous documents including the Regulatory Agreement, dated as of __________, 202__, between the Owner and the City.

As of the date of this Certificate, the following percentage of residential units in the Project are (i) occupied by Qualified Households (as such term is defined in the Regulatory Agreement) or (ii) are currently vacant and being held available for such occupancy and have been so held continuously since the date a Qualified Household vacated such unit, as indicated:

Number of Units occupied by Qualified Households: ________________ Number of Vacant Units: ________________
Number of Qualified Households who commenced
occupancy during the preceding reporting period: ________________

Attached is a separate sheet (“Occupancy Summary”) listing, among other items, the appropriate information for each residential unit in the Project, the occupants of each unit and the rent paid for each unit. The information contained thereon is true and accurate and reasonable and is based on information submitted to the Owner and is certified under penalty of perjury by each tenant. [Signatures on following page]
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ATTACHMENT NO. 3
2 The undersigned hereby certifies that (1) a review of the activities of the Owner during such reporting period and of the Owner’s performance under the Regulatory Agreement has been made under the supervision of the undersigned; and (2) to the best of the knowledge of the undersigned, based on the review described in clause (1) hereof, the Owner is not in default under any of the terms and provisions of the above documents.

Dated:______________________ OWNER
__________________, a California limited
partnership

By: ______________________________
Name:_______________________________
Its: _________________________________
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ATTACHMENT NO. 3
3 OCCUPANCY SUMMARY
Total Number of Units in the Project: ___________
Total Units occupied by Qualified Households: ___________ Total Units available for rent to Qualified Households: ___________ ATTACHED IS THE FOLLOWING INFORMATION:

A. Resident and rental information on each occupied apartment in the complex.

B. Certification of Tenant Eligibility for all Qualified Households who have moved into ________________, Rancho Mirage, California, since the filing of the last Occupancy Summary. The same are true and correct to the best of the undersigned’s knowledge and belief.

Dated:______________________ OWNER:

______________________, a California limited
partnership

By:

Name:

Its:

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EXHIBIT I

4 EXHIBIT I
TO

AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT

Form of Promissory Note – Land Loan
[Attached Behind This Page]
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EXHIBIT I

5 PROMISSORY NOTE – LAND LOAN

SECURED BY DEED OF TRUST

Principal Amount: $__________ Date of Note: ______, 202__ Maker: ______ ______________,
California limited partnership
Lender: Rancho Mirage Housing
Authority, a public body
Maturity Date: 55 years from the
date on which the Construction Financing
converts to the Permanent Loan
Interest Rate: 3%

1. Land Loan.

FOR VALUE RECEIVED, the undersigned ____________, a California limited partnership (“Maker”), with its principal place of business located at 9692 Haven Blvd., Suite 100, Rancho Cucamonga, CA 91730, promises to pay to the RANCHO MIRAGE HOUSING AUTHORITY (the “ Authority” or “ Holder”) at 69825 CA -111, Rancho Mirage, California 92270, or such place as the Holder may, from time to time, designate by written notice to the Maker, the principal sum of $___________ (the “Land Loan”), together with any accrued interest, if applicable, as set forth in this Promissory Note – Land Loan (the “Note ”). This Note is made and given pursuant to that certain Affordable Housing Disposition and Development Agreement between the Authority and Maker’s predecessor -in-interest, dated December 21, 2023 (the “Affordable Housing Agreement”). The Affordable Housing Agreement is incorporated herein by this reference. All initially capitalized terms used but not defined herein will have the meanings given to them in the Affordable Housing Agreement. The Land Loan is made to enable Maker to pay the purchase price for the conveyance of the Property by Authority to Maker in accordance with the terms and conditions of the Affordable Housing Agreement.

2. T
erm of Loan and Right of Prepayment.
a. Maturity Date. All accrued interest, if any, and unpaid principal will be due and payable in full without any further demand or notice 55 years from the date the Construction Financing converts to or is paid in part by a Permanent Loan (“Maturity Date”). b. Prepayment. T
his Note may be prepaid in whole or in part at any time and from time to time without penalty or premium.

3. Security for Note.

This Note is secured by a Deed of Trust – Land Loan executed by Maker which encumbers certain real property described therein and in the Affordable Housing Agreement. 18-139
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6 4. I nterest Calculation .

Except in the case of Default as set forth in Section 9 of this Note, the principal outstanding from time to time on this Note will accrue uncompounded simple interest at the rate of 3% per annum. Principal and interest shall be payable in lawful money of the United States of America.

Interest will be computed based on an actual day year and the actual number of days elapsed.

5. A nnual Payment.

Maker shall make payments on this Note to the Authority from a share of “Residual Receipts” (as defined in this Note) received from the operation of the Project located upon the real property encumbered by the Deed of Trust – Land Loan securing this Note . Payments must be made annually on or before April 15
th of each calendar year based upon the operation of the Project for the prior calendar year, with the first such payment due on April 15 th of the calendar year following the year in which the Construction Financing converts to or is paid in part by a Permanent Loan, and continuing each April 15
th thereafter until this Note has been paid in full.
a. A nnual Payments from Residual Receipts . Maker must make payments of the outstanding principal and accrued interest hereunder equal to the Authority’s Share of the Residual Receipts from the Project (“Authority’s Share”) which will be an amount equal to an allocable portion of 50% of the Residual Receipts based upon the ratio of the initial principal balance of this Note to the respective initial principal balances of all promissory notes evidencing loans to the Project which are paid from Residual Receipts produced from operation of the Project.

Annual payments under this Note must be accompanied by Maker’s financial and operating statements for the Project for the preceding calendar year, together with Maker’s calculation of Residual Receipts payable to the Authority on this Note, if any. All payments made hereunder must be credited first to any accrued but unpaid interest, then to costs, charges and fees which the Maker may owe the Author ity from time to time under the Affordable Housing Agreement or hereunder, and then to reduce the outstanding principal balance hereof. b. D
efinition of Residual Receipts . As used herein, the term “ Residual Receipts” will mean the excess of all Income from the Project for such calendar year actually collected by Maker reduced by the Operating Expenses of the Project for such calendar year. (i ) The term “Income” will mean all money and income derived by Maker from the Project, including without limitation, all rental income paid by tenants thereof, all rental subsidy payments made by governmental agencies, deposits forfeited by tenants, net proceeds received by Maker from vending and laundry room machines, if any, and income from any source related to Maker’s ownership and operation of the Project, but not including tenant deposits unless forfeited, interest on all required reserve accounts, loan proceeds, capital contributions, loans or similar advances to Maker by its partners, amounts released from reserves, or insurance or condemnation proceeds.
(ii) The term “Operating Expenses” will mean the sum of the following:
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7 (a ) Regularly scheduled non- contingent payments of interest, principal, impounds (so long as required impound expense costs do not duplicate other permitted Operating Expenses), and fees and charges, if any, required on loans secured by liens on the Project in accordance with the original loan documents evidencing such indebtedness, or any amendments or refinancing of such indebtedness consented to by the Authority; (b) All normal and necessary operating expenses actually and reasonably incurred by Maker in owning, operating, maintaining, repairing and replacing the Project or component parts thereof, including: insurance premiums; taxes and assessments; maintenance and repair expenses (to the extent that such repairs and/or maintenance expenses are not paid out of reserves ); utilities (not paid by the tenants); accounting, audit and legal expense attributable to the Project; office expense incurred for the operation of the Project; salaries, wages or other compensation of the employees or agents of Maker employed on-site, if any, in connection with the maintenance, leasing, administration or operation of the Project, along wit h all withholding taxes, insurance premiums, social security payments and other payroll taxes or payments; and issuer, occupancy or monitoring inspection fees, if any. Operating Expenses will exclude depreciation and other similar non-cash expenses, as well as repairs or expenses paid from insurance proceeds, any costs or expenses paid or reimbursed by third parties, and federal and state taxes on income;
(c) Property management fees initially totaling $__ per unit per month payable to the Management Company, increasing annually as provided in the management agreement for the Project approved by the Authority;
(d) Deposits and required payments into accounts maintained for operating reserves and/or operating deficit reserves and/or capital replacement reserves and/or any similar reserve accounts established and maintained in satisfaction of any lender or inves tor requirements, in the per-unit amount required by any Senior Lender or the Tax Credit Investor and approved by the Authority;
(e) If not included in subparagraph (d) above, reserves for operating expenses in an amount sufficient to pay 6 months of the Project costs referred to in subparagraphs (a) – (c) above, or such higher amount as required by the holder of a Senior Loan or the Tax Credit Investor and approved as an Operating Expense by the Authority in its reasonable discretion; and any debt service reserve payment required by the terms of Maker’s limited partnership agreement;
(f) Any asset management fee and partnership management fee paid to a limited partner and a general partner of Maker, respectively, not to exceed a total of $________ per calendar year, such amounts to be increased by 3% per annum; (g) Payment of any deferred developer fee paid to the
“Developer” as provided in the limited partnership agreement of Maker approved by the Authority, together with such interest thereon required to comply with applicable provisions of the limited partnership agreement, until such deferred developer fee and interest thereon have been paid in full, all to the extent such deferred developer fee is not paid from capital contributions to Maker or from other financing proceeds;
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8 (h) Payments to repay (i) any voluntary loan or capital contribution made by the Tax Credit Investor while acting in its capacity as a limited partner of Maker, and (ii) any payments to repay any tax credit adjustor(s) which might be required pursuant to applicable provisions of the limited partnership agreement of Maker which has been approved by the Authority;
(i) Ad valorem tax and assessment payments, CFD payments and landscape lighting district payments, as applicable, to the extent not paid out of impound accounts maintained by the holder of the Senior Loan, and the cost of all insurance required for the P roject to satisfy the requirements of any lender whose loan is secured by a deed of trust encumbering the Project, including, but not limited to, the Authority, and as such requirements may be imposed in regulatory agreements and declaration of covenants, conditions and restrictions, to the extent the foregoing are not paid from impounds maintained by the holder of the Senior Loan;
(j) If and as applicable, the fee payable to Hope Through Housing Foundation, an affiliate of the Maker, or any other provider of required social services provided to residents of the Project in satisfaction of TCAC requirements, for the cost of coordination of social support services and of social service programs offered to and available to the tenants of the Project, initially totaling $ __ per unit per month, such amounts to be increased by 3% per annum;
(k) The cost of security services and security patrols supplied to the Project, if applicable; and
(l) All other fees and expenses which may be authorized in the Annual Budget for the Project approved by the Authority. c. Notwithstanding the generality of the foregoing, depreciation, amortization and other similar accounting or balance sheet non- cash items, are not Operating Expenses or deductible in computing Residual Receipts:
d. For purposes of this Note, “CPI” will mean the Consumer Price Index -- Urban Consumers (Los Angeles-Anaheim-Riverside CA area; Base 1982 -8 = 100), published by the United States Department of Labor, Bureau of Labor Statistics or any successor index or agency reasonably acceptable to the parties.

6. A
udited Financial Statement .

Maker will provide Holder annually with an audited financial statement documenting the calculation of Residual Receipts for the previous calendar year. Holder will have the right, but not an obligation, to object within 90 days from receipt of Maker’s statement and to inspect and audit Maker’s books and records concerning the calculation of the Residual Receipts payment . Failure to timely object will be deemed acceptance. If Holder does object, Holder must specify the reasons for its objection or disapprova l. Maker will have 30 days to reconcile any disapproved item. If Maker and Holder cannot agree on the amount of the Residual Receipts payment, an independent auditor mutually selected by Maker and Holder shall resolve any disputed items. If the independent 18-142
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9 auditor determines that Maker’s proposed payment would have resulted in an underpayment to Holder greater than 2.5% for the applicable period, then Maker must immediately pay to Holder any cost incurred by Holder for such independent auditor; otherwise, the cost of such independent auditor shall be paid by Holder.

7. A
nnual Budget.

Maker must prepare and submit to the Authority a proposed annual operating budget for the management and operation of the Project (“Annual Budget”) no later than 30 days preceding the effective year covered by such budget. The Annual Budget must include the projected Income and Operating Expenses for the year and a line item showing the projected Residual Receipts from the Project for the year. Authority will review the Annual Budget within the 30-day period and, if reasonably acceptable, give written notic e to Maker by the end of such 30- day period that it approves the Annual Budget, which approval will not be unreasonably withheld or delayed. If the Annual Budget is not reasonably acceptable, the Authority will specify within the same period in writing the reasons for disapproval. The intent of this section is to provide the Authority with an opportunity to disapprove any projected unreasonable Operating Expenses which would diminish the Residual Receipts from the Project. Once an Annual Budget has been approved by the Authority, any changes which exceed 10% of the total Annual Budget will require the Authority’s prior written consent, which consent shall not be unreasonably withheld or delayed . The Authority’s failure to either approve or disapprove the Annual Budget or items which are shown therein by the end of the 30- day review period will be deemed the Authority’s approval of the Annual Budget.

8. A
cceleration Upon Certain Events or Upon Default.

In the event of any Default under the terms of this Note, the Affordable Housing Agreement, or the Regulatory Agreement (as defined in the Affordable Housing Agreement), the Deed of Trust-Land Loan or under any Senior Loans, notes or deeds of trust, at the option of the Holder and after notice to the Maker providing Maker with 30 days in which to cure any Default, and such Default not having been cured within 30 days (or if a greater amount of time is reasonably necessary to complete a cure, if actions to cure such Default are not undertaken within said 30-day period and pursued with reasonable diligence thereafter), all principal and interest due under this Note will immediately become due and payable upon 30-day written notice from the Holder to the Maker. Failure to exercise such option will not constitute a waiver of the right to exercise it in the event of any subsequent Default. If Maker fails to take corrective action to cure a Default within the time limit provided in this Note, and providing that the Authority has been provided with an address for notice for a limited partner, and, if any, a special limited partner of Maker, the Authority will concurrently with its notice to Maker also give written notice of such Default to the limited partner and special limited partner. In such event, the limited partner or the special limited partner will have the same time period as that given to Maker hereunder to cure such Def ault.

Provided, however, if the limited partner and the special limited partner find it reasonably necessary to remove the general partner of the Maker in order that such parties may cure such Default, then the limited partner and the special limited partner may remove and replace the general partner with a substitute general partner which, i n the interim, may be the special limited partner or an entity affiliated with the limited partner and then must be a non -profit entity reasonably 18-143
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10 acceptable to the Authority, such removal and replacement to be completed in accordance with language for the same in the limited partnership agreement of the Maker which has been approved by the Authority. Such replacement general partner will affect a cu re of any such Default within the time period set out in this Note provided for the cure or remedy of a Default, and the Authority agrees to accept on the same basis as if made by Maker any corrective action to cure or remedy any Default which might be tendered by any limited partner or special limited partner (which party will be under no obligation to tender any cure or remedy). Additionally, in the event that a limited partner or special limited partner is precluded from curing a default of the Maker due to an inability to remove the general partner of Maker as a result of a bankruptcy, injunction or similar proceeding by or against the Maker or its general partner, providing that the limited partner or special limited partner proceeds promptly and with reasonable diligence to remove the general partner of the Maker under such circumstances and provides the Authority with evidence reasonably demonstrating the same, the Authority agrees to forebear from completing a foreclosure (judicial or non-judicial) during the period during which the limited partner and the special limited partner are so precluded from acting. In no event will the Authority be precluded from exercising any of its remedies in the event of a Maker Default under this Note if the Authority’ s security becomes or is reasonably likely to become materially jeopardized by a failure to cure a Default or by the Default itself.

Should the undersigned Maker agree to or sell, convey, transfer, or dispose of the real property described in the Deed of Trust – Land Loan securing this Note or any part thereof or interest therein, without first obtaining the prior written consent of the Holder (except for a Permitted Transfer, as defined in the Affordable Housing Agreement), then, at the option of the Holder, all principal and interest due hereunder shall immediately become due and payable upon 30 days written notice from the Holder to the Maker. Consent to one transaction of this type will not constitute a waiver of the right to require consent to future or successive transactions.

Notwithstanding the generality of the foregoing, transfers permitted under the Affordable Housing Agreement will not constitute a Default hereunder. Such transfers will not accelerate the maturity of this Promissory Note, provided that any transfer is either a Permitted Transfer as defined in the Affordable Housing Agreement or is reasonably acceptable to the Authority, which must make such determination with reasonable promptness, and any transferee under such a transfer must agree to be bound by any and all instruments in favor of the Authority.

9. I
nterest on Default.

From and after a Default, the entire outstanding principal balance of this Note will automatically bear an annual interest rate equal to the lesser of 8% compounding annually or the maximum interest rate allowed by law.

10. C osts Paid by Maker.

Maker agrees to pay the following costs, expenses and attorneys’ fees paid or incurred by the Holder of this Note, or as adjudged by a court of competent jurisdiction: (a) reasonable costs of collection, costs and expenses and attorneys’ fees paid or incurred in connection with the 18-144
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11 collection or enforcement of this Note, whether or not suit is filed; and (b) costs of suit in such sum as the court may adjudge reasonable as attorneys’ fees in any action to enforce payment of this instrument.

11. Wai
ver .

To the extent permitted by law, Maker and all persons or entities liable or which may become liable on this Note hereby waive diligence, presentment, protest and demand, notice of protest, dishonor and nonpayment of this instrument, and expressly agree that, without in any way affecting the liability of Maker hereunder, the Holder hereof may extend the Maturity Date or the time for payment of any installment due hereunder or any other term hereof, accept additional security, release any party liable hereunder or release any security now or hereafter securing this Note. Maker hereby waives, to the fullest extent permitted by law, the right to plead any and all statutes of limitations as a defense to any demand on this instrument or any deed of trust, security agreement, guarantee or other agreement now or hereafter securing this Note.

12. N
onrecourse.

This Note is a nonrecourse obligation of Maker, and, as a result, the Authority agrees that Maker and its constituent members will not be personally liable for the payment of any sums now or hereafter owing to the Authority under the terms of this Note. If any Default should occur under this Note or under any other instrument the default of which constitutes a Default on this Note, the Authority agrees that its rights for any monetary claim against or as to the Maker and its constituent members, will be limited to a pro ceeding against the security for the indebtedness evidenced by this Note and that the Authority will have no right to proceed directly against the Maker and its constituent members for the satisfaction of any monetary claims that the Authority may have against the Maker or for any deficiency judgment remaining after foreclosure of any real or personal property securing the obligations owing to Authority. Notwithstanding the generality of the foregoing, Maker must indemnify, defend, protect and hold Holder harmless from and against any and all loss, damage, liability, action, cause of action, cost or expense, including, without limitation, reasonable attorneys’ fees and expenses incurred by the Holder, to the extent arising as a result of any (a) fraud or intentional and material misrepresentation (meaning a misrepresentation that materially impacts the consideration that the Authority receives under the agreements, or which served as a material basis for the Authority entering into the agreements) by the Make r under or in connection with the Affordable Housing Agreement or any other agreements or documents executed in connection therewith; ( b) intentional material and bad faith waste of the Property encumbered by the Deed of Trust – Land Loan; (c) losses resulting from Maker’s failure to maintain insurance required under the provisions of the D eed of Trust – Land Loan, except to the extent that Maker did not have the legal right, because of a bankruptcy, receivership or similar judicial proceeding, to direct payments to acquire and maintain such required insurance; (d) ; and as set forth in V.3 of the Affordable Housing Agreement; (e) any costs related thereto, including without limitation reasonable attorneys’ fees and costs incurred by Authority in connection therewith. Maker’s obligation to indemnify the Holder hereof as aforesaid will be recourse obligations of the Maker, and on the occurrence of any of the foregoing event s, the Holder will have the right to proceed directly against the Maker to recover any and all losses, damages, liability, costs and expenses (including without limitation, reasonable attorneys’ fees and 18-145
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12 expenses) and may bring any action and institute any proceeding to obtain a judgment in or following foreclosure for any and all such losses, damages, liabilities, costs and expenses resulting from such occurrence.

13. S
everability .

If any provision of this Note is determined by a court of competent jurisdiction to be void or unenforceable, such determination will not affect any other provision of this instrument, and all other provisions hereof will remain valid and in full force and effect.

14. No
n -Waiver.

No delay in demanding or failure to demand performance hereunder will constitute a waiver by the Holder hereof of its right to subsequently demand such performance or to exercise any remedies for any Default hereunder. Further, in order to be effective, any waiver of any of the Holder’s rights and remedies hereunder must be expressed in a writing signed by a duly appointed representative of the Holder hereof. Further, waiver by the Holder hereof of any right hereunder will not constitute a waiver of any other right, including, but not limited to, the right to exercise any and all remedies for a different or subsequent event of Default hereunder.

MAKER:

______________________, a California limited partnership

By its general partner
________________________________________________

By: ______________________________
Name: ______________________________
Its: ______________________________

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EXHIBIT J

13 EXHIBIT J
TO

AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT

Form of Deed of Trust – Land Loan
[Attached Behind This Page]
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EXHIBIT J

14 RECORDING REQUESTED BY
AND
WHEN RECORDED MAIL TO:

Rancho Mirage Housing Authority
69825 CA-111
Rancho Mirage, California 92270
Attn: Executive Director

APN: SPACE ABOVE FOR RECORDER’S USE ONLY

EXEMPT FROM RECORDING FEE PER
GOVERNMENT CODE §27383

DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING
(WITH ASSIGNMENT OF RENTS)

This Deed of Trust, Security Agreement and Fixture Filing (with Assignment of Rents) (“D
eed of Trust – Land Loan ”) is dated as of ____________, 202__, by ____________________, a California limited partnership , whose address is ________________________ (“Trustor”), to FIDELITY NATIONAL TITLE COMPANY, a California corporation (“ Trustee”), for the benefit of the RANCHO MIRAGE HOUSING AUTHORITY, whose address is 69825 CA -111, Rancho Mirage, California 92270 (“Beneficiary”), and is executed to secure that certain Promissory Note – Land Loan of even date herewith, in the principal amount of $___________, executed by Trustor in favor of Beneficiary, the provisions of which are incorporated in this Deed of Trust – Land Loan by this reference.

This Deed of Trust – L
and Loan is made with respect to that certain Affordable Housing Disposition and Development Agreement, dated December 21, 2023, for reference purposes only, between the Trustor’s predecessor -in-interest and the Beneficiary (the “ Affordable Housing Agreement”).

Trustor hereby IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS to Trustee, its successors and assigns, in Trust, with POWER OF SALE TOGETHER WITH RIGHT OF ENTRY AND POSSESSION, the following property (“Trust Estate”):
(a) All of that certain real property in the City of Rancho Mirage, County of Riverside, State of California, more particularly described in Exhibit “A” attached hereto and by this reference made a part hereof (“Subject Property”); (b) All buildings, structures and other improvements now or in the future located or to be constructed on the Subject Property (“Improvements”); (c) All tenements, hereditament, appurtenances, privileges, franchises and other rights and interests now or in the future benefitting or otherwise relating to the Subject 18-148
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15 Property or the Improvements, including easements, rights -of-way and development rights (“Appurtenances”). (Appurtenances, together with the Subject Property and the Improvements, are hereafter collectively referred to as the “Real Property”); (d) Subject to the assignment to Beneficiary set forth in Paragraph 4 below, all rents, issues, income, revenues, royalties and profits now or in the future payable with respect to or otherwise derived from the Trust Estate or the ownership, use, management operation, leasing or occupancy of the Trust Estate, including those past due and unpaid (“Rents”); (e) All present and future right, title and interest of Trustor in and to all inventory, equipment, fixtures and other goods (as those terms are defined in Division 9 of the California Uniform Commercial Code (“UCC”), whether existing now or in the future) located at, upon or about, or affixed or attached to or installed in, the Real Property, or used or to be used in connection with or otherwise relating to the Real Property or the ownership, use, development, construction, maintenance, management, operation, marketing, leasing or occupancy of the Real Property, including furniture, furnishings, machinery, appliances, building materials and supplies, generators, boilers, furnaces, water tanks, heating, ventilating and air conditioning equipment and all other types of tangible personal property of any kind or nature, and all accessories, additions, attachments, parts, proceeds, products, repairs, replacements and substitutions of or to any of such property (“Goods,” and together with the Real Property, collectively the “Property”); and (f) All present and future right, title and interest of Trustor in and to all accounts, general intangibles, chattel paper, deposit accounts, money, instruments and documents (as those terms are defined in the UCC) and all other agreements, obligations, rights and written material (in each case whether existing now or in the future) now or in the future relating to or otherwise arising in connection with or derived from the Property or any other part of the Trust Estate or the ownership, use, development, construction, maintenance, management, operation, marketing, leasing, occupancy, sale or financing of the Property or any other part of the Trust Estate, including (to the extent applicable to the Property or any other portion of the Trust Estate) (i) permi ts, approvals and other governmental authorizations, (ii) improvement plans and specifications and architectural drawings, (iii) agreements with contractors, subcontractors, suppliers, project managers, supervisors, designers, architects, engineers, sales agents, leasing agents, consultants and property managers, (iv) takeout, refinancing and permanent loan commitments, (v) warranties, guaranties, indemnities and insurance policies, together with insurance payments and unearned insurance premiums, (vi) claims, demands, awards, settlements, and other payments arising or resulting from or otherwise relating to any insurance or any loss or destruction of, injury or damage to, trespass on or taking, condemnation (or conveyance in lieu of condemnation) or public use of any of the Property, (vii) license agreements, service and maintenance agreements, purchase and sale agreements and purchase options, together with advance payments, security deposits and other amounts paid to or deposited with Trustor under any such agreements, (viii) reserves, deposits, bonds, deferred payments, refunds, rebates, discounts, cost savings, escrow proceeds, sale proceeds and other rights to the payment of money, trade names, trademarks, goodwill and all other types of intangible personal property of any kind or nature, and (ix) all supplements, modifications, amendments, renewals, extensions, proceeds, replacements and substitutions of or to any of such property (collectively, “Intangibles”). 18-149
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16 Trustor further grants to Trustee and Beneficiary, pursuant to the UCC, a security interest in all present and future right, title and interest of Trustor in and to all Goods and Intangibles and all of the Trust Estates described above in which a security interest may be created under the UCC (collectively, the “ Personal Property”). This Deed of Trust – Land Loan constitutes a security agreement under the UCC, conveying a security interest in the Personal Property to Trustee and Beneficiary. Trustee and Ben eficiary shall have, in addition to all rights and remedies provided herein, all the rights and remedies of a “secured party” under the UCC and other applicable California law. Trustor covenants and agrees that this Deed of Trust – Land Loan constitutes a fixture filing under Sections 9313 and 9402(6) of the UCC.

FOR THE PURPOSE OF SECURING, in such order of priority as Beneficiary may elect, the following: (a) payment of that certain Promissory Note – Land Loan dated on or about the same date hereof, in the original principal amount of $________ (the “Note”); and (b) due, prompt and complete observance, performance and discharge of each and every monetary and non- monetary condition, obligation, covenant and agreement contained herein or contained in the Affordable Housing Agreement (as enforceable prior to delivery of the Certificate of Completion, or as enforceable following such delivery) and in the Regulatory Agreement (as defined in the Affordable Housing Agreement), which is dated on or about the same date hereof between the Trustor and the Beneficiary (“ Regulatory Agreement”) (collectively, “ Secured Obligations”) and all of their terms are incorporated herein by reference and this conveyance shall secure any and all extensions, amendments, modifications or renewals thereof, however evidenced.

AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST – LAND LOAN, TRUSTOR COVENANTS AND AGREES:

1. That Trustor shall perform its obligations as set forth in the Secured Obligations at the time and in the manner respectively provided therein;

2. That Trustor shall not permit or suffer the use of any of the Property for any purpose other than the use for which the same was intended at the time this Deed of Trust – Land Loan was executed;

3. That the provisions of the Secured Obligations are incorporated in and made a part of this Deed of Trust – Land Loan. Upon default of a Secured Obligation, and after the giving of notice and the expiration of any applicable cure period, subject to the rights of any senior lenders, the Beneficiary, at its option, may declare the whole of the indebtedness secured hereby to be due and payable. This Deed of Trust – Land Loan shall cover, and the property subject hereto shall include, all property now or hereafter affixed or attached to or incorporated upon the Subject Property in, to or under which Trustor now has or hereafter acquires any right, title or interest, which, to the fullest extent permitted by law, shall be deemed fixtures and a part of the Subje ct Property. To the extent any of the property subject to this Deed of Trust – Land Loan consists of rights in action or personal property covered by the UCC, this Deed of Trust – Land Loan shall also constitute a security agreement, and Trustor hereby grants to Beneficiary, as secured party, a security interest in such property, including all proceeds thereof, for the purpose of securing the Secured Obligations. In addition, for the purpose of securing the Secured Obligations, Trustor hereby grants to Beneficiary, as secured party, a security interest in all of the property described herein in, to, or under which Trustor now has or hereafter acquires any right, title or interest, 18-150
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17 whether present, future or contingent, including, but not limited to, all equipment, inventory, accounts, general intangibles, instruments, documents and chattel paper, as those terms are defined in the UCC, and all other personal property of any kind (including, without limitation, money and rights to the payment of money), whether now existing or hereafter created, that are now or at any time hereafter (a) in the possession or control of Beneficiary in any capacity; (b) erected upon, attached to or appurtenant to the Subject Property; (c) located or used on the Subject Property or identified for use on the Subject Property (whether stored on the Subject Property or elsewhere); or (d) used in connection with, arising from, related to, or associated with the Subject Property or any of the personal property described herein, the construction of any improvements on the Subject Property, the ownership, development, maintenance, management or operation of the Subject Property, the use or enjoyment of the Subject Property or the operation of any business conducted thereon, including, without limitation, all such property described as the Trust Estate hereinabove.

The security interests granted in this Paragraph 3 are hereinafter severally and collectively called the “Security Interest”. The Security Interest shall be self -operative with respect to the real property described herein but Trustor must execute and deliver on demand such additional security agreements, financing statements and other instruments as may be requested in order to impose the Security Interest more specifically upon the real and personal property encumbered hereby.

The Security Interest, at all times, shall be prior to any other interest in the personal property encumbered hereby. Trustor shal l act and perform as necessary and shall execute and file all security agreements, financing statements, continuation statements and other documents requested by Beneficiary to establish, maintain and continue the perfected Security Interest. Trustor, on demand, shall promptly pay all costs and expenses of filing and recordation, to ensure the continued priority of the Security Interest. Trustor shall not sell, transfer, assign or otherwise dispose of any personal property encumbered hereby without obtaining the prior written consent of Beneficiary, except that the Trustor may, in the ordinary course of business, replace personal property with reasonably like kind property or dispose of personal property that will not be replaced because of its obsolescence. Unless Beneficiary then agrees otherwise in writing, all proceeds from any permitted sale or disposition in excess of that required for full replacement shall be paid to Beneficiary to be applied on the Note subject to the rights of any senior lenders.

Although proceeds of personal property are covered hereby, this shall not be construed to mean that Beneficiary consents to any sale of such personal property. Upon its recordation in the real property records of Riverside County, this Deed of Trust – Land Loan shall be effective as a financing statement filed as a fixture filing. In addition, a carbon, photostatic or other reproduced copy of this Deed of Trust – Land Loan and/or any financing statement relating hereto shall be sufficient for filing and/or recording as a financing statement;

4. Subject to the rights of any senior lenders, all rents, profits and income from the property covered by this Deed of Trust – Land Loan are hereby assigned to the Beneficiary for the purpose of discharging the debt hereby secured. Permission is hereby given to Trustor so long as no default exists hereunder after the giving of notice and the expiration of any applicable cure period, to collect such rents, profits and income for use in accordance with the provisions of the Secured Obligations;

5. Subject to the rights of any senior lenders, that upon default hereunder or under the aforementioned agreements, and after the giving of notice and the expiration of any applicable cure period, Beneficiary shall be entitled to the appointment of a recei ver by any court having 18-151
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18 jurisdiction, without notice, to take possession and protect the property described herein and operate same and collect the rents, profits and income therefrom;

6. That Trustor will keep the improvements hereafter erected on the property insured against loss by fire and such other hazards, casualties, and contingencies as may be required by applicable provisions of the Secured Obligations, and all such insurance shall be evidenced by standard fire and extended coverage insurance policy or policies and general liability policy or policies. As applicable, such policies shall be endorsed with standard mortgage clause with loss payable to the Beneficiary and certificates thereof together with copies of original policies, if requested, shall be deposited with the Beneficiary;

7. To pay before delinquency any taxes and assessments affecting said Property; to pay, when due, all encumbrances, charges and liens, with interest, on said Property or any part thereof which appear to be prior or superior hereto; and to pay all costs, fees, and expenses of this trust. Notwithstanding anything to the contrary contained in this Deed of Trust – Land Loan, Trustor shall not be required to pay and discharge any such tax, assessment charge or levy so long as Trustor is contesting the legality thereof in good faith and by appropriate proceedings, and Trustor has adequate funds to pay any liabilities contested pursuant to this Paragraph 7;

8. As it is provided more specifically in the Secured Obligations, to keep said property in good condition and repair, subject to ordinary wear and tear, casualty and condemnation, not to remove or demolish any buildings hereafter erected thereon; to complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged, or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor; to comply with all laws affecting said prop erty or requiring any alterations or improvements to be made thereon (subject to Trustor’s right to contest the validity or applicability of laws or regulations); not to commit or permit waste thereof; not to commit, suffer or permit any act upon said property in violation of law and/or covenants, conditions and/or restrictions affecting said property; not to permit or suffer any material alteration of or addition to the buildings or improvements hereafter constructed in or upon said property without the consent of the Beneficiary;

9. To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee, and to pay all costs and expenses, including cost of evidence of title and reasonable attorney’s fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear;

10. Should Trustor fail, after the giving of notice and the expiration of any applicable cure period, to make any payment or do any act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof. Following default, after the giving of notice and the expiration of any applicable cure period, subject to the rights of any senior lenders, Beneficiary or Trustee, being authorized to enter upon said property for such purposes, may commence, appear in and/or defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; may pay, purchase, contest or compromise any encumbrance, charge, or lien which in the judgment of either appears to be prior or superior 18-152
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19 hereto; and, in exercising any such powers, may pay necessary expenses, employ counsel, and pay his reasonable fees;

11. Beneficiary shall have the right but not the obligation to pay all insurance premiums required by the Secured Obligations when due should Trustor fail to make any required premium payments. All such payments made by the Beneficiary shall be added to the sums secured hereby;

12. To pay immediately and without demand all sums so expended by Beneficiary or Trustee, under permission given under this Deed of Trust – Land Loan, with interest from date of expenditure, at the highest rate of interest permitted by law;

13. That the funds to be advanced hereunder are to be used in accordance with applicable provisions of the Secured Obligations; upon the failure of Trustor to do so, after the giving of notice and the expiration of any applicable cure period, Trustor shall be in default hereunder;

14. Trustor further covenants that it will not voluntarily create, suffer, or permit to be created against the property subject to this Deed of Trust – Land Loan any lien or liens except as authorized by Beneficiary and/or as provided in the Secured Obliga tions and further that it will keep and maintain the property free from the claims of all persons supplying labor or materials which will enter into the construction of any and all buildings now being erected or to be erected on said premises. Notwithstanding anything to the contrary contained in this Deed of Trust – Land Loan, Trustor shall not be obligated to pay any claims for labor, materials or services which Trustor in good faith disputes and is diligently contesting, provided that Trustor shall, at B eneficiary’s written request, within 30 days after the filing of any claim or lien (but in any event, and without any requirement that Beneficiary must first provide a written request prior to foreclosure) record in the Office of the Recorder of Riverside County, a surety bond in the amount required by law to protect against a claim of lien, or provide such other security reasonably satisfactory to Beneficiary;

15. That any and all improvements made or about to be made upon the premises covered by this Deed of Trust – Land Loan and all plans and specifications, comply with all applicable municipal ordinances and regulations and all other applicable regulations ma de or promulgated, now or hereafter, by lawful authority, and that the same will upon completion comply with all such municipal ordinances and regulations and with the rules of the applicable fire rating or inspection organization, bureau, association or office.

IT IS MUTUALLY AGREED THAT:

16. Trustor confirms that if Trustor should sell, enter into a contract of sale, convey, or in any way transfer all or any interest of Trustor in the Real Property encumbered by this Deed of Trust – Land Loan or suffer Trustor’s title or any interest therein to be divested, whether voluntarily or involuntarily, unless the same is a Permitted Transfer as defined in the Affordable Housing Agreement, without the prior written consent of the Beneficiary being first obtained, then subject to the rights of any senior lenders, Beneficiary shall have the right, at Beneficiary’s sole option, to declare all sums payable under the Note secured hereby immediately due and payable in full, irrespective of the maturity date otherwise specified in the Note. No waiver of this right 18-153
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20 shall be effective unless in writing and signed by the Beneficiary. Consent by the Beneficiary to any one such transaction shall not be deemed a waiver of the right to require such consent to future or successive transactions. Further, upon default under one of the Secured Obligations, and after the giving of notice and the expiration of any applicable cure period provided therein, subject to the rights of any senior lenders, the Beneficiary, at its option, may declare the whole of the indebtedness secured hereby to be immediately due and payable in full, irrespective of the maturity date otherwise specified in the Note;

17. As provided more specifically in the Secured Obligations, should the Property or any part thereof be taken or damaged by reason of any public improvement or condemnation proceeding, or damaged by fire, or earthquake, or in any other manner, subject to the rights of any senior lenders, Beneficiary shall be entitled to all compensation, awards, and other payments or relief therefor which are not used to reconstruct, restore or otherwise improve the Property or part thereof that was taken or damaged, and shall be entitled at its option to commence, appear in and prosecute in its own name, any action or proceedings, or to make any compromise or settlement, in connection with such taking or damage subject to the rights of any senior lenders. All such compensation, awards, damages, rights of action and proceeds which are not used to reconstruct, restore or otherwise improve the property or part thereof that was taken or damaged, including the proceeds of any policies of fire and other insurance affecting said Property, are hereby assigned to Beneficiary subject to the rights of any senior lenders;

18. N
otwithstanding Sections 16 and 17, in the event that a portion of the Property is taken for a public improvement or pursuant to a condemnation proceeding and the Qualifying Units (as defined in the Regulatory Agreement) remain intact and continue to be owned and operated by Trustor in conformance with the Affordable Housing Agreement and the Regulatory Agreement, Beneficiary shall not declare all sums due and payable under the Note, nor shall the Beneficiary be entitled to any compensation, awards and other payments therefor, provided that such compensation, awards and other payments are used for (a) paying principal and interest owed on the Permanent Loan (as defined in the Affordable Housing Agreement), (b) making improvements to the Property that are approved by Beneficiary, in its reasonable discretion, (c) payment of principal owing under the Note, or (d) another purpose required by any senior lenders.

Subject to the rights of any senor lenders, in the event that Trustor receives such compensation, awards or other payments and fails to expend the funds in conformance with any of subsections (a), (b), (c), or (d) of this section within 30 days of receipt of such funds, Trustor shall be in default under this Deed of Trust – Land Loan;

19. A
s is provided more specifically in the Note secured hereby, the provisions of which in this regard shall control over any contrary language in this Paragraph 19, upon default by Trustor in taking any action or in making any payments provided for herein, or in the Secured Obligations, if Trustor shall fail to perform any covenant or agreement in this Deed of Trust – Land Loan within 30 days after written demand therefor by Beneficiary (or, in the event that more than 30 days is reasonably required to cure such default, should Trustor fail to promptly commence such cure within such 30 days, and diligently prosecute same to completion), after the giving of notice and the expiration of any applicable cure period and subject to the rights of any senior lenders, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale, and of written notice of default 18-154
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21 and of election to cause the P roperty to be sold, which notice Trustee shall cause to be duly filed for record and Beneficiary may foreclose this Deed of Trust – Land Loan. Beneficiary shall also deposit with Trustee this Deed of Trust – Land Loan and all documents evidencing expendit ures secured hereby;

20. After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, subject to the rights of any senior lenders, Trustee, without demand on Trust or, shall sell said Property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said P roperty by public announcement at the time and place of sale, and from time to time thereafter may postpone the sale by public announcement at the time and place of sale, and from time to time thereafter may postpone the sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to the purchaser its Deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in the Deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary, may purchase at the sale. The Trustee shall apply the proceeds of sale to payment of (a) the expenses of such sale, together with the reasonable expenses of this trust including therein reasonable Trustee’s fees or attorney’s fees for conducting the sale, and the actual cost of publishing, recording, mailing and posting notice of the sale; (b) the cost of any search and/or other evidence of title procured in connection with such sale and revenue stamps on Trustee’s Deed; (c) all sums expended under the terms hereof, not then repaid, with accrued interest at the maximum rate allowed by law; (d) all other sums then secured hereby; and (e) the remainder, if any, to the person or persons legally entitled thereto;

21. Beneficiary may from time to time substitute a successor or successors to any Trustee named herein or acting hereunder to execute this Deed of Trust – Land Loan. Upon such appointment, and without conveyance to the successor trustee, the latter shall be vested with all title, powers, and duties conferred upon any Trustee herein named or acting hereunder. Each such appointment and substitution shall be made by written instrument executed by Beneficiary, containing reference to this Deed of Trust – Land Loan and its place of record, which, when duly recorded in the proper office of the county or counties in which the property is situated, shall be conclusive proof of proper appointment of the successor trustee;

22. The pleading of any statute of limitations as a defense to any and all obligations secured by this Deed of Trust – Land Loan is hereby waived to the full extent permissible by law;

23. Upon written request of Beneficiary stating that all sums secured hereby have been paid and all obligations secured hereby have been satisfied, and upon surrender of this Deed of Trust – Land Loan to Trustee for cancellation and retention and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters of fact shall be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as “the person or persons legally entitled thereto”; 18-155
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22 24. The trust created hereby is irrevocable by Trustor;

25. This Deed of Trust – Land Loan applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors, and assigns.

The term “Beneficiary” shall include not only the original Beneficia ry hereunder but also any future successor in interest to Beneficiary. In this Deed of Trust – Land Loan, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. All obligations of Trustor hereunder are joint and several;

26. Trustee accepts this Trust when this Deed of Trust – Land Loan, duly executed and acknowledged, is made public record as provided by law. Except as otherwise provided by law, the Trustee is not obligated to notify any party hereto of pending sale under this Deed of Trust – Land Loan or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee;

27. The undersigned Trustor requests that a copy of any notice of default and of any notice of sale hereunder be mailed to it at the address set forth in this Deed of Trust – Land Loan or any other address of Trustor then known to Beneficiary;

28. As is provided more specifically in the Affordable Housing Agreement, the provisions of which in this regard will control over any contrary language in this Paragraph 28, Trustor agrees at any time and from time to time, within a reasonable time after receipt of a written request from Beneficiary, to furnish to Beneficiary detailed statements in writing of income, rents, profits, and operating expenses of the Subject Property and its improvements, and the names of the occupants and tenants in possession, together with the expiration dates of their leases and full information regarding all rental and occupancy agreements, and the rents provided for by such leases and rental and occupancy agreements, and such other information regarding the premises and their use as may be requested by Beneficiary;

29. Trustor agrees that the obligations secured by this Deed of Trust – Land Loan are made expressly for the purpose of acquiring the Subject Property which is necessary to develop a new affordable rental housing development thereon, as is more specifically provided in the Secured Obligations;

30. As is provided more specifically in the Secured Obligations, the obligations of Trustor thereunder are nonrecourse obligations of the Trustor. The sole recourse of Beneficiary shall be the exercise of its rights against the Property;

31. Notwithstanding specific provisions of this Deed of Trust – Land Loan, non- monetary performance hereunder shall not be deemed to be in default where delays or defaults are due to: war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires ; casualties; acts of God; acts of the public enemy; epidemics; pandemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor or supplier; acts of the other party; acts or failure to act of the Authority or any other public or governmental agency or entity (except that any act or failure to act of Beneficiary shall not excuse performance by Beneficiary unless such act or failure to act is allowed or required by law); or any other causes 18-156
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23 beyond the reasonable control or without the fault of the party claiming an extension of time to perform. An extension of time for any such cause (a “ Force Majeure Delay ”) shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause. If, however, notice by the party claiming such extension is sent to the other party more than 30 days after the commencement of the cause, the period shall commence to run only 30 days prior to the giving of such notice. Times of performance under this Deed of Trust – Land Loan may also be extended in writing by the Beneficiary and Trustor;

32. If a right or lien created by this Deed of Trust – Land Loan shall be held by a court of competent jurisdiction to be invalid or unenforceable as to any part of the obligations described herein, the portion of such obligations which is not secured hereby shall be completely performed and paid prior to the performance and payment of the remaining and secured portion of the obligations, and all performance and payments made by Trustor shall be considered to have been performed and paid on and applied first to the complete payment of the unsecured portion of the obligations;

33. If the provisions set forth below in this Paragraph 33 are contrary to provisions in the Secured Obligations, the provisions in the Secured Obligations will control:
(a) Subject to the extensions of time set forth in Paragraph 31, and subject to the further provisions of this Paragraph 33, failure or delay by Trustor to perform any term or provision respectively required to be performed under the Secured Obligations or this Deed of Trust – Land Loan constitutes a default under this Deed of Trust – Land Loan; (b) Beneficiary shall give written notice of default to Trustor, specifying the default complained of by the Beneficiary. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default; (c) Any failures or delays by Beneficiary in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by Beneficiary in asserting any of its rights and remedies shall not deprive Beneficiary 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; (d) If an event of default occurs under the terms of this Deed of Trust – Land Loan, prior to exercising any remedies hereunder or thereunder, Beneficiary shall give Trustor written notice of such default. Trustor shall have a reasonable period of time aft er such notice is given within which to cure the default prior to exercise of remedies by Beneficiary under this Deed of Trust – Land Loan. In no event shall Beneficiary be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by any failure to cure a default or the default is not cured within 30 days after the notice of default is first given; (e) If an event of default occurs under the terms of the Secured Obligations, prior to exercising any remedies hereunder or thereunder, Beneficiary shall give Trustor notice of such default. As is provided more specifically in the Secured Obligations, if t he default is reasonably capable of being cured within 30 days, Trustor shall have such period to effect a cure prior to exercise of remedies by the Beneficiary under the Secured Obligations, or this Deed of 18-157
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24 Trust – Land Loan. If the default is such that it is not reasonably capable of being cured within 30 days, and Trustor (i) initiates corrective action within said period, and (ii) diligently and in good faith works to effect a cure as soon as possible, then Trustor shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by Beneficiary. In no event shall Beneficiary be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by any failure to cure a default.

34. Beneficiary acknowledges that Trustor will record against title to the Subject Property an extended use agreement in favor of the California Tax Credit Allocation Committee executed by the Trustor in connection with the Trustor’s allocation of low -income housing tax credits under Section 42 of the Code (the “ Extended Use Agreement ”). If Beneficiary or its successors or assigns (collectively, the “ Subsequent Owner ”) acquires the Property by foreclosure (or instrument in lieu of foreclosure), then the “extended use period” (as defined in Section 42(h)(6)(D) of the Internal Revenue Code) shall terminate, except for the obligation of the Subsequent Owner to comply with the limitations on evictions, termination of tenancy and increase in rents for the three year period following the Subsequent Owner’s acquisition of the Property, as set forth in Section 42(h)(6)(E)(ii) of the Internal Revenue Code. As provided in the Affordable Housing Agreement, upon request when appropriate, Beneficiary shall execute such documentation as is necessary to subordinate this Deed of Trust – Land Loan to a Senior Loan, which agreement shall include a Request for Notice of Delinquency and Notice of Default in favor of beneficiary pursuant to California Civil Section 2924, or other substitute or similar statute.

IN WITNESS WHEREOF, Trustor has executed this Deed of Trust – Land Loan as of the day and year first set forth above.

TRUSTOR:

_________________________, a California limited partnership

By its general partner

_____________________________

By: _______________________
Name: _______________________
Title: _______________________

EXHIBIT A TO
DEED OF TRUST – LAND LOAN, SECURITY AGREEMENT AND FIXTURE FILING (WITH ASSIGNMENT OF RENTS)
Legal Description of Subject Property
[to be inserted]

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25 18-159

AGENDA ITEM #

STAFF REPORT

TO: Rancho Mirage Housing Authority Board DATE: December 21, 2023 Chair and Members

FROM: Marcus J. Aleman II, Housing Manager

SUBJECT: Approval of Disposition and D evelopment Agreement with Blieu LLC Regarding Disposition of Housing Authority Property for Affordable Housing

SPECIFIC REQUEST OR RECOMMENDATION

That the Housing Authority Board A dopte Resolution No. 2023- HA-(Next-in-Order) and execute a disposition and development agreement (“DDA”) with accompanying deeds for the disposition of Parcel A -3 of Assessor’s Parcel Number 685- 090-011 for the development of multi-family affordable housing with Blieu LLC in accordance with the terms of the DDA subject to final review and approval of Executive Director and General Counsel.

JUSTIFICATION OR INFORMATION

BACKGROUND

On August 28, 2023, the Rancho Mirage Housing Authority released a Request for Qualifications (“RFQ”) for the development of at least 200 multi-family affordable housing units on a 10- acre parcel of land on Housing Element Inventory Site B. Site B is an approximately 53.76-acre parcel of land zoned for 28+/ - acres of park land and 25+/ - acres of high density residential with an Affordable Housing Overlay. This Site was selected for the RFQ due to its California Tax Credit Allocation Committee (“CTCAC”) and California Department of Housing and Community Development’s (“HCD”) high resource designation, which makes it competitive in terms of scoring for critical State funding. The deadline for RFQ submission was October 27, 2023. The Housing Authority received 6 responses for review.

During the review process City Staff was made aware that the 2024 CTCAC/HCD Draft Opportunity Maps were made available in late October and that the designation for various sites throughout the City and Coachella Valley would be changed from high resource to moderate resource designations. This change in designation strongly impacts the potential for State funding sources which makes affordable housing development for this site virtually impossible as of January 1, 2024. To help ensure the development of affordable housing, City Staff determined that developing the entire 25+/ - acres and entering into disposition and development agreements (“DDA”) to lock in the high 19-1
DATE: December 21, 2023 DDA – Blieu LLC Page 2 of 3

JUSTIFICATION OR INFORMATION CONTINUED

AGENDA ITEM #

resource designation will give the Housing Authority and selected respondents the greatest opportunity for the development of affordable housing.

Given authorization, staff and general counsel began negotiating a draft disposition and development agreement with Blieu LLC. Both parties have collaboratively worked toward producing a draft DDA that is suitable to all involved and provides the best opportunity to achieve the development of a minimum of 250 multi-family affordable housing units.

Simultaneously, staff worked with consultant, Michael Baker International, to map and record the new parcels of the high- density residential portion of Assessor’s Parcel Number 685-090-011. The site being considered in the DDA is the 10-acre parcel found at the southeast corner of the larger parcel now identified as parcel A-3.

19-2
DATE: December 21, 2023 DDA – Blieu LLC Page 3 of 3

JUSTIFICATION OR INFORMATION CONTINUED

AGENDA ITEM #

SPECIFIC REQUEST OR RECOMMENDATION

That the Housing Authority Board Approve Resolution No. 2023-HA-[Next In Order] and execute a disposition and development agreement (“DDA”) with accompanying deeds for the disposition of Parcel A -3 of Assessor’s Parcel Number 685- 090-011 for the development of multi-family affordable housing with Blieu LLC in accordance with the terms of the DDA subject to final review and approval of Executive Director and General Counsel.

ENVIRONMENTAL DETERMINATION

ATTACHMENT(S)

1. Public Hearing Notice

2. Resolution

19-3

ATTACHMENT 1

PUBLIC HEARING NOTICE

(SEE ATTACHED)

19-4
Rancho Mirage Housing Authority
69-825 Highway 111
Rancho Mirage, CA 92270
Phone 760/328-2266

P U B L I C H E A R I N G N O T I C E

MEETING OF THE

RANCHO MIRAGE CITY COUNCIL

ACTING AS

THE HOUSING AUTHORITY BOARD

Thursday, December 21, 2023 – 1:00 p.m.

Disposition and Development Agreement- Blieu Companies

Request: Consideration of a Disposition and Development Agreement regarding disposition of Housing Authority property for affordable housing

Location: Approximately 10 acres within larger parcel having Assessor Parcel Number 685-090-011, generally located south/southeast of Monterey Marketplace Shopping Center at Dinah Shore Drive and Monterey Avenue, in Rancho Mirage, CA (the “Subject Property”).

NOTICE IS HEREBY GIVEN that a Public Hearing will be held before the City Council acting as the Housing Authority Board pursuant to California Health and Safety Code Section 34312.3 regarding a Disposition and Development Agreement (“DDA”) proposing to dispose of the Subject Property to Blieu Companies, subject to the terms and conditions of a DDA, including the development of affordable housing.

The Public Hearing will be held on Thursday, December 21, 202 3, at 1:00 p.m., in the Council Chamber, 69- 825 Highway 111, Rancho Mirage, California, at which time and place pertinent testimony will be heard. The file, including all environmental information, is available for public inspection at City Hall, Monday through Friday, between 8 a.m. and 5:00 p.m.

19-5
~ CITY OF RANCHO MIRAGE
Disposition and Development Agreement- Blieu Companies December 21, 2023

GOVERNMENT CODE § 65009 NOTICE: If you challenge this proposed activity in court, you may be limited to raising only those issues you or someone else raised at the Public Hearing described in this notice, or in written correspondence delivered to the City Council sufficiently prior to the Public Hearing to enable its consideration by them.

V
ICINITY MAP – NOT TO SCALE

19-6
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ATTACHMENT 2

RESOLUTION

(SEE ATTACHED)

19-7
1 RESOLUTION NO. 2023-HA-____

A RESOLUTION OF THE RANCHO MIRAGE CITY COUNCIL ACTING AS THE HO

USING AUTHORITY BOARD APPROVING THE DISPOSITION AND

DEVELOPMENT AGREEMENT WITH BLIEU LLC AND FINDING THE ACTION

EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT

W HEREAS , on or about August 28, 2023, the City issued a Request for Statement of Qualifications for Multi- Family Affordable Housing Development, with subsequent addenda, seeking qualified, competent, knowledgeable and experienced entities to develop multi -family affordable housing projects on certain real proper ty located in the City of Rancho Mirage; and

WHEREAS, on Novembe r 21, 2023, the City Council acting as the Housing Authority Board, in relevant part, directed staff and its general counsel to negotiate draft disposition and development agreement for the purpose of establishing site control for the development of affordable housing with Blieu LLC prior to January 1, 2024, to help ensure the development of affordable housing on the Subject Property ; and

WHEREAS, public hearing notice of the Housing Authority’s consideration of the DDA was published twice in the Desert Sun, on December 6, 2023 and December 13, 2023; and

19-8
2 WHEREAS, in accordance with Health and Safety Code Section 34312.3, the Housing Authority held a public hearing prior to the disposition of the Subject Property.

NOW, THEREFORE, THE RANCHO MIRAGE HOUSING AUTHORITY, DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:

SECTION 1. RECITALS AND INCORPORATION BY REFERENCE

The recitals set forth above are true and correct and any and all documents referenced herein are hereby incorporated herein by this reference.

SECTION 2.

APPROVE DISPOSITION AND DEVELOPMENT

AGREEMENT

T
he Housing Authority hereby approves the Disposition and Development Agreement with Blieu LLC, dated November 21, 2023 (the “ DDA”), thereby approving the disposition of Housing Authority owned proper ty (the “Subject Property ”), as described in more detail in the DDA , subject to the terms and conditions set forth therein, including but not limited to, the construction of a multi-family affordable housing project on said property.

SECTION 3
. ENVIRONMENTAL REVIEW

SECTION 4. GENERAL PLAN CONSISTENCY

The Housing Authority finds that the dis position is consistent with the City ’s General Plan.

SE
CTION 5. SEVERABILITY.

SECTION

6. REPEAL OF CONFLICTING PROVISIONS.

19-9
3 That all the provisions heretofore adopted by the Housing Author ity that are in conflict with the provisions of this Resolution are hereby repealed.

SECTION 7 . EFFECTIVE DATE.

That this Resolution shall take effect immediately upon its adoption.

SEC
TION 8. CERTIFICATION.

That the Housing Authority Secretary shall certify to the passage and adoption of this Resolution and enter it into the book of original resolutions.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

19-10
4 PASSED, APPROVED AND ADOPTED this 21st day of December, 2023.

RANCHO MIRAGE HOUSING AUTHORITY

_________________________________
Steve Downs, Board Chair

ATTEST:

____________________________________
Kristie Ramos, Secretary

APPROVED AS TO FORM:

____________________________________
Colin Kirkpatrick, General Counsel

19-11
5 EX
HIBIT “A”

DISPOSITION AND DEVELOPMENT AGREEMENT

(SEE ATTACHED)
19-12

DISPOSITION

AND DEVELOPMENT AGREEMENT

between

THE RANCHO MIRAGE HOUSING AUTHORITY

and

BLIEU LLC

A CALIFORNIA LIMITED LIABILITY COMPANY

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65318.50016\34700316.2

TABLE OF CONTENTS

Page
i

ARTICLE I. DEFINITIONS; REPRESENTATIONS AND WARRANTIES; EFFECTIVE DATE.............................................................................................. 1

1.1 Definitions. ................................................................................................. 1

2.1 Purchase and Sale. .................................................................................. 14

2.2 Payment of Purchase Price. ................................................................... 15

2.3 Eminent Domain . .................................................................................... 15

2.4 Title Approval. ........................................................................................ 15

2.5 Developer Investigations. ....................................................................... 16

2.6 Developer to Obtain all Project Entitlements. ..................................... 18

2.7 Delivery of Property Free of Occupants. .............................................. 20

2.8 Project Marketing Plan. ......................................................................... 20 ARTICLE III. ESCROW INSTRUCTIONS ........................................................................... 20

3.1 Opening of Escrow. ................................................................................. 20

3.2 Conditions to Close of Escrow. .............................................................. 21

3.3 Developer’s Escrow Deposits. ................................................................ 23

3.4 Authority’s Escrow Deposits. ................................................................. 24

3.5 Closing Procedure. .................................................................................. 25

3.6 Close of Escrow. ...................................................................................... 25

3.7 Recordation and Distribution of Documents. ....................................... 26

3.8 Escrow Closing Costs, Taxes and Title Policy Premium. .................. 267

3.9 Escrow Cancellation Charges. ............................................................... 26

3.10 Escrow Cancellation. .............................................................................. 26

3.11 Report to IRS........................................................................................... 27 ARTICLE IV. PROJECT DEVELOPMENT .......................................................................... 27

4.1 Developer Covenant to Undertake Project. .......................................... 27

4.2 Construction Contract; Construction Schedule .................................. 27

4.3 Construction Start and Completion of Project. ................................... 27

4.4 Compliance with Laws. .......................................................................... 28

4.5 Schedule of Performance. ....................................................................... 28

4.6 Developer Attendance at City Board Meetings. ................................... 29

4.7 City’s Right to Inspect Project and Property. ...................................... 29

4.8 Cost of Construction. .............................................................................. 30

4.9 Prevailing Wages . .................................................................................... 30

4.10 Efforts to Hire Local Workers ............................................................... 31

4.11 Certificate of Completion. ...................................................................... 31

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ii

ARTICLE V. DEVELOPER COVENANTS ........................................................................... 31

5.1 Obligation to Refrain from Discrimination. ......................................... 31

5.2 Form of Non-Discrimination and Non-Segregation Clauses. ............. 32

5.3 Environmental Indemnity of the City by the Developer. .................... 33

5.4 Insurance. ................................................................................................ 34 ARTICLE VI. PROJECT FINANCING .................................................................................. 37

6.1 Project Financing. ................................................................................... 37

6.2 Project Loan by City to Developer ....................................................... 39

6.3 Project Budget. ........................................................................................ 38

6.4 Only Permitted Exceptions. ................................................................... 39

6.5 City Right to Discharge Prohibited Encumbrances. ........................... 39

6.6 Rights of Lender and City Regarding Permitted Security Instruments. ............................................................................................. 39 ARTICLE VII. DEFAULTS, REMEDIES AND TERMINATION ...................................... 41

7.1 Defaults - General. .................................................................................. 41

7.3 Legal Actions. .......................................................................................... 44

7.4 Rights and Remedies are Cumulative. .................................................. 46

7.5 Developer Indemnification of the City. ................................................. 46 ARTICLE VIII. GENERAL PROVISIONS. ........................................................................... 47

8.1 Incorporation of Recitals. ....................................................................... 47

8.2 Restrictions on Transfers. ...................................................................... 47

8.3 Notices, Demands and Communications Between the Parties. ........... 48

8.4 Conflict of Interest. ................................................................................. 49

8.5 Warranty Against Payment of Consideration for Agreement. ........... 49

8.6 Non-liability of City, Officials and Employees. .................................... 49

8.7 Unavoidable Delay; Extension of Time of Performance. .................... 50

8.8 Inspection of Books and Records. ......................................................... 50

8.9 Real Estate Commissions. ...................................................................... 50

8.10 Binding on Successors and Assigns. ...................................................... 51

8.11 Entire Agreement. ................................................................................... 51

8.12 Execution of this Agreement. ................................................................. 51

8.13 Survival of Indemnity Obligations. ....................................................... 51

8.14 Time Declared to be of the Essence. ...................................................... 51

8.15 Approvals . ................................................................................................ 51

8.16 Further Assurances. ................................................................................ 51

8.17 City Approvals and Actions. .................................................................. 52

8.18 Investor Limited Partner Provisions. .................................................... 52 19-15
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This AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT (“Agreement”) is dated as of December 21, 2023 (“Date of Agreement”), for reference purposes only, and is entered into by and between the RANCHO MIRAGE HOUSING AUTHORITY, a public body located in the County of Riverside, State of California (“Housing Authority”), and BLIEU LLC, a California limited liability company (“Developer”). The Housing Authority and the Developer are sometimes referred to in this Agreement, each individually, as a “ Party,” or collectively, as the “Parties.”

RECITALS
This Agreement is entered into with reference to the following recitals of fact (“Recitals”) that City and Developer believe to be true as of the Effective Date of this Agreement:

A. T he Housing Authority is the owner of that certain real property located at [INSERT[ , Rancho Mirage, CA, approximately 10 acres in size, more specifically described in Exhibit A attached hereto and incorporated herein by this reference (“Property”).

B. O n or about August 28, 2023, the City issued a Request for Statement of Qualifications for Multi -Family Affordable Housing Development, with subsequent addenda, seeking qualified, competent, knowledgeable and experienced entities to develop multi -family af fordable housing projects on the Subject Property.

C. Consistent with the City of Rancho Mirage General Plan (the "General Plan") and the current zoning designation for the Subject Property, the Parties desire to cause the construction and development of the Subject Property for the primary purposes of providing multi-family affordable housing development. The development of the Project shall include the construction of up to 250 affordable units with associated parking; comprised generally of 49% very low income (30% to 50% AMI) and 51% of low income (50% to 80% AMI), with an average of less than 80% AMI for the restricted units. To accommodate the Project, Developer may seek a density bonus, and incentives, and/or request for the building(s) to be up to three-stories.

D. The Housing Authority intends to transfer to the Developer: (1) the fee interest in the Subject Property subject to the terms and conditions of this Agreement and the Regulatory Agreement.
19-17

1 E. Developer intends to finance the costs of the Project with sources that include but are not limited to the Federal low-income housing tax credits, tax-exempt bonds, California state tax credits, and financing from the California Department of Housing and Community Development as appropriate, which will be reflected in the Financing Plan.

F. The Housing Authority has determined that Developer has the necessary expertise, skill and ability to carry out the commitments set forth in this Agreement and that this Agreement is in the best interests, and will materially contribute to the Housing Authority's economic development goals by: (1) creating temporary construction jobs for workers in connection with the construction of the Improvements; (2) creating full -time permanent jobs; (3) developing and continually operating an affordable housing development, providing affordable housing to City residents; and (4) satisfying City’s Regional Housing Needs Allocation, as set forth in the City’s Housing Element that was duly certified by the California Department of Housing and Community Development for the 2021- 2029 Planning period, which consisted of 430 Very Low units, 318 Low units, and 328 Moderate units.

G. The Housing Authority finds and determines that the sale of the Property is exempt from California Environmental Quality Act, California Public Resources Code §21000- §21177, as amended ("CEQA"), including CEQA Guidelines Section 15312 (Surplus Government Property Sales), and 15061(b)(3), because (1) the proposed action is a sale of surplus government property, (2) and (3) approval of the action does not have the potential for causing significant effect on the environment, and it can be seen with certainty there is no possibility that the activity in question may have a significant effect on the environment.

Further, any subsequent actions subject to CEQA will be subject to future environmental review in accordance with CEQA and CEQA Guidelines.

TERMS AND CONDITIONS

DEFINITIONS; REPRESENTATIONS AND WARRANTIES;

EFFECTIVE DATE
I.1 Definitions. All initially capitalized terms in this Agreement, including in the Recitals above, that are not otherwise defined in this Agreement shall have the following meanings:

I.1.1 “Additional Insureds ”
has the meaning ascribed to such term in
Section V.4.
19-18
ARTICLE I.

2 I.1.2 “Affiliate” means and refers to any person or entity, directly or indirectly Controlling or Controlled by or under common Control with the applicable person or entity, whether by direct or indirect ownership of equity interests, by contract or otherwise.

I.1.3 “Agreement” means this Affordable Housing Disposition and Development Agreement.

I.1.4 “Housing Authority ” means the Rancho Mirage Housing Authority, a California public body.

I.1.6 “CE QA” means the California Environmental Quality Act, Public Resources Code Sections 21000, et seq.

I.1.8 “C ity” means the City of Rancho Mirage, a charter city and recognized for certain purposes as a political subdivision of the State of California.

I.1.9 “Housing Authority Requirements” has the meaning ascribed to the term in Section 2.6.2.

I.1.11 “Completion of Construction” when used in this Agreement means, unless otherwise indicated, the issuance of a Certificate of Completion confirming that the final certificate of occupancy for the Project, based on the plans submitted by the Developer to the Housing Authority, has been issued.

Such loan(s) shall provide for normal and customary disbursement controls for the payment of 19-19

3 Project Costs and normal and customary fees and expenses for loan(s) of similar size and purpose.

The Construction Financing is set forth in the Project Budget.

I.1.14 “Construction Plans” means all construction documentation upon which Developer, and Developer’s several contractors, shall rely in building each and every part of the improvements and shall include, but not necessarily be limited to, final architectural drawings, landscaping plans and specifications, hydrology and drainage plans, final elevations, building plans and specifications (also known as “working drawings”) .

I.1.16 “Controlling” and “Controlled” mean and refer to exercising or having Control.

I.1.17 “County” means the County of Riverside, California.

I.1.18 “Developer” means Blieu LLC, a California limited liability company and its successors and assigns that are permitted by this Agreement.

I.1.20 “Due Diligence Investigations ” means the Developer’s due diligence investigations of the Property to determine the suitability of the Property for development and operation of the Project, including, without limitation, investigations of the environmental and geotechnical suitability of the Property, as deemed appropriate in the reasonable discretion of the Developer, all at the sole cost and expense of the Developer.

I.1.22 “Due Diligence Period” means the date commencing on the Effective Date and ending at 5:00 p.m. on the 120
th day following the Effective Date.
19-20
I

4 I.1.23 “Effective Date” has the meaning ascribed to the term in Section I.2.2.

I.1.24 “Environmental Claims” has the meaning ascribed to the term in Section V.3.

I.1.25 “Environmental Laws” means all federal, state, local, or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, or requirements of any government authority regulating, relating to, or imposing liability of standards of conduct concerning any hazardous substance (as later defined), or pertaining to occupational health or industrial hygiene (and only to the extent that the occupational health or industrial hygiene laws, ordinances, or regulations relate to Hazardous Substances on, under, or about the Property), occupational or environmental conditions on, under, or about the Property, as now or may at any later time be in effect, including without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”) [42 USC Section 9601 et seq.]; the Resource Conservation and Recovery Act of 1976 (“RCRA”) [42 USC Section 6901 et seq.]; the Clean Water Act, also known as the Federal Water Pollution Control Act (“FWPCA”) [33 USC Section 1251 et seq.]; the Toxic Substances Control Act (“TSCA”) [15 USC Section 2601 et seq.]; the Hazardous Materials Transportation Act (“HMTA”) [49 USC Section 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 USC Section 6901 et seq.] the Clean Air Act [42 USC Section 7401 et seq.]; the Safe Drinking Water Act [42 USC Section 300f et seq.]; the Solid Waste Disposal Act [42 USC Section 6901 et seq.]; the Surface Mining Control and Reclamation Act [30 USC Section 101 et seq.] the Emergency Planning and Community Right to Know Act [42 USC Section 11001 et seq.]; the Occupational Safety and Health Act [29 USC Section 655 and 657]; the California Underground Storage of Hazardous Substances Act [California Health & Safety Code Section 25288 et seq.]; the California Hazardous Substances Account Act [California Health & Safety Code Section 25300 et seq.]; the California Safe Drinking Water and Toxic Enforcement Act [California Health & Safety Code Section 24249.5 et seq.] the Porter-Cologne Water Quality Act [California Water Code Section 13000 et seq.] together with any amendments of or regulations promulgated under the statutes cited above and any other federal, state, or local law, statute, ordinance, or regulation now in effect or later enacted that pertains to occupational health or industrial hygiene, and only to the extent the occupational health or industrial hygiene laws, ordinances, or regulations relate to Hazardous Substances on, under, or about the Property, or the regulation or protection of the environment, including ambient air, soil, soil vapor, groundwater, surface water, or land use.

I.1.26 “Environmental Matters”
has the meaning ascribed to the term in Section
V.3.

I.1.27 “Escrow” has the meaning ascribed to the term in Section II.1.

5 I.1.29 “Escrow Holder” means _________, Attn: ___________ through its office located at _____________________________________, or such other escrow holder mutually agreed upon in writing by both Housing Authority and Developer.

I.1.30 “Escrow Opening Date” has the meaning ascribed to the term in Section III.1.

I.1.31 “Event of Default” has the meaning ascribed to the term in Section VII.1.

I.1.32 “Housing Authority Executive Director” means the Executive Director of the Rancho Mirage Housing Authority or his or her designee or successor in function.

I.1.33 “FIRPTA Affidavit” means an affidavit complying with Section 1445 of the United States Internal Revenue Code.

I.1.35 “Governmental Requirements ” means all codes, statutes, ordinances, laws, permits, orders, and any rules and regulations promulgated thereunder of any Governmental Agency.

I.1.36 “H
azardous Substances ” means, without implied limitation, substances defined as “hazardous substances,” “hazardous material,” “toxic substance,” “solid waste,” or “pollutant or contaminate” in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sections 9601, et seq.; the TSCA; the Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801, et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901, et seq.; those substances listed i n the United States Department of Transportation (DOT) Table [49 CFR 172.101], or by the EPA, or any successor authority, as hazardous substances [40 CFR Part 302]; and those substances defined as “hazardous waste” in Section 25117 of the California Health and Safety Code or, as “hazardous substances” in Section 25316 of the California Health and Safety Code; other substances, materials, and wastes that are, or become, regulated or classified as hazardous or toxic under federal, state, or local laws or regulations and in the regulations adopted pursuant to said laws, and shall also include asbestos, polychlorinated biphenyl, flammable explosives, radioactive material, petroleum products, and substances designated as a hazardous substance pursuant to 33 USC Section 1321 or listed pursuant to 33 USC Section 1317. Notwithstanding the foregoing, “Hazardous Substances” shall not include such products in quantities as are customarily used in the construction, maintenance, development or management of residential developments or associated buildings and grounds, or typically used in residential activities in a manner generally used in other comparable residential developments, or substances commonly ingested by a significant population living within the Project including, without limitation, alcohol, aspirin, tobacco and saccharine.

I.1.37 “I
ndemnified Parties ” means Housing Authority and its commissions, agents, attorneys, officers, employees, and authorized representatives. 19-22

6 I.1.38 “Institutional Lender ” means any of the following: (a) a bank (State, Federal or foreign), trust company (in its individual or trust capacity), insurance company, credit union, savings bank (State or Federal), pension, welfare or retirement fund or system, real estate investment trust (or an umbrella partnership or other entity of which a real estate investment trust is the majority owner), Federal or State agency regularly making or guaranteeing mortgage loans, investment bank or a subsidiary of a Fortune 500 company; or (b) any person or entity that is an Affiliate of or is a combination of any one or more of the persons or entities described in subparagraph (a) of this Section ; or (c) a joint powers authority the membership of which is composed of Governmental Agencies; or (d) a Governmental Agency acceptable to the Housing Authority.

I.1.39 “Lender” means the holder of any debt, obligation and Security Instrument and its successors and assigns.

I.1.41 “P
arties ” means, collectively, the Housing Authority and the Developer.

I.1.42 “Party” means, individually, the Housing Authority or the Developer, as applicable.

I.1.43 “PCO Statement ” means a preliminary change of ownership statement provided for in California Revenue and Taxation Code Section 480.3.

I.1.45 “Permitted Exceptions” means (a) any and all items shown in Schedule B of the Preliminary Report as exceptions to coverage under the proposed Title Policy that the Developer accepts, pursuant to Section II.4; (b) any exceptions from coverage under the proposed Title Policy; ( c) non- delinquent property taxes and assessments; ( d) this Agreement; ( e) the Quitclaim Deed; ( f) the Notice of Agreement; ( g) the Regulatory Agreement; ( h) any Permitted Security Instrument; (k) any agreement restricting occupancy and rents of the Project required by an Institutional Lender or a Subordinate Loan Lender, if any; and ( i) any other document or encumbrance expressly required to be recorded against the Property or the Project pursuant to the terms of this Agreement.

7 repayment of money used to pay or reimburse Project Costs; (ii) a bona fide Permanent Loan; (iii) a bona fide Subordinate Loan; (iv) a bona fide Refinancing; or (v) a delivery assurance fee regarding a Permanent Loan that is refundable to Developer at the close of the Permanent Loan. If the Housing Authority approves a loan structure for the Project where, in order to avoid triggering prevailing wages for the Project, a loan is made to Developer and then is immediately made by Developer to the Project, then a Security Instrument securing such a loan will be deemed a Permitted Security Instrument. Promptly after execution, Developer shall promptly deliver a copy of any Security Instrument to the Authority, with the Lender’s name and notice address.

I.1.47.2 Any Transfer directly resulting from the foreclosure or deed in lieu of foreclosure of a Permitted Security Instrument as permitted under Section 6.6.7.

I.1.47.4 The lease of residential apartment units in the Project consistent with the Regulatory Agreement.

I.1.47.6 The Transfer and sale of limited partnership interests in Developer while the Developer is in the form of a limited partnership. 19-24
I

8 I.1.47.7 In the event that any general partner of the Developer, while the Developer is in the form of a limited partnership, is removed by the limited partner of such limited partnership for cause following default under applicable provisions of the limited partnership agreement, the Transfer of the general partner interest to a 501(c)(3) tax exempt nonprofit corporation or its Affiliate selected by the limited partner and approved by the Housing Authority, which approval will not be unreasonably withheld, delayed or conditioned.

I.1.47.9 Any dilution of a general partner’s interest in the Developer while the Developer is in the form of a limited partnership, in accordance with the Developer’s limited partnership agreement; and
I.1.48 “Plans and Specifications” has the meaning ascribed to the term in Section II.6.1
I.1.49 “Preliminary Report ” means a preliminary report issued by the Title Company in contemplation of the issuance of the Title Policy, accompanied by legible copies of all documents listed in Schedule B of the report as exceptions to coverage under the proposed Title Policy. The Parties acknowledge that they may prepare one or more Preliminary Reports for each parcel, or group of parcels, comprising the Property. In such case, all reports, notices, and objection letters which pertain to the Preliminary Report for the entirety of the Property will apply separately to each Preliminary Report associated with a parcel or a group of parcels.

H. “Project” means the construction and development of the Property as an affordable multi-family rental housing development, including all required or associated on- site and off -site improvements, all hardscape and all landscaping, all as described generally in the Scope of Development, and all to be developed in accordance with the Plans and Specifications to be approved by the Housing Authority in its reasonable discretion and with any conditions imposed by the Housing Authority in its approval of the Plans and Specifications. The primary purposes of the Project shall be to provide multi -family affordable housing development. The development of the Project shall include the construction of up to 250 units with associated parking; comprised generally of 49% of very low income (30% to 50% AMI) and 51% of low income (50% to 80% AMI), with an average of less than 80% AMI for the restricted units. To accommodate the Project, Developer may seek a density bonus, and incentives, and/or request for the buildings to be up to three-stories.

I.1.50 “Project Budget” means the Project Costs and anticipated sources of funds to pay the Project Costs as set forth in the Project proforma, which is subject to approval by the Housing Authority Executive Director, as may be modified from time to time pursuant to Section

6.3. 19-25
I

9 I.1.51 “Project Commencement Date” means no later than the date 30 days after the Escrow Closing Date..

I.1.52 “Project Completion Date” means that date by which a Certificate of Completion must be issued for the Project, as more particularly provided in the Schedule of Performance. The Project Completion Date shall be no later than the earlier of the following (1) 36 months after both of the following: the Close of Escrow and the Project Commencement Date; or (2) February 2028.

I.1.53 “Project Costs ” means all of the costs of acquiring the Property and developing, constructing and equipping the Project.

I.1.54 “P
roperty ” means that real property, and all current and future improvements thereon (including, without implied limitation, the Project), legally described in Exhibit A.

I.1.55 “Property Transfer” means and refers to any “change in ownership,” as defined in Revenue and Taxation Code Sections 60, 61(a)- (i), 65(a) and 67, of all or any portion of the Property.

I.1.56 “Purchase Price” means the purchase price for the Property in the amount of one dollar ($1.00).

I.1.57 “Qualifying Units” will have the meaning ascribed thereto in the Regulatory Agreement.

I.1.58 “Qu itclaim Deed ” means a deed substantially in the form of Exhibit D to this Agreement, conveying Housing Authority’s interest in the Property to the Developer.

I.1.59 R ecord ”, “recorded”, “recording” or “recordation” each mean and refer to recordation of the referenced document in the official records of the Recorder of the County of Riverside, California.

I.1.60 Refinancing. Any loan secured by a Permitted Security Instrument that the Developer obtains from an Institutional Lender subsequent to recordation of the Permanent Loan for a loan amount which, when combined with the then balances of all Subordinate Loans encumbering the Property, does not exceed 90% of the appraised value of the Property plus the value of Tax Credits allocated to the Project by TCAC, with said values evidenced by an appraisal or other evidence acceptable to the Housing Authority.

I.1.61 “R
egulatory Agreement ” means the Declaration of Restrictive Covenants, Conditions and Restrictions Restricting the Use of Property for Affordable Housing in substantially the form of Exhibit H attached to this Agreement, which shall be recorded against the Pr operty at the Close of Escrow. The express terms of which are subject to the Housing Authority’s reasonable approval, consistent with the terms of this Agreement, and which will impose certain covenants and affordability restrictions in full force and effect for a term of 55 years following recordation of Certificate of Completion.
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10 I.1.62 “Schedule of Performance” means the schedule of dates to complete performance of certain critical actions by the Parties pursuant to this Agreement, attached to this Agreement as Exhibit C.

I.1.63 “Scope of Development ” means the detailed description of the Project attached to this Agreement as Exhibit B.

I.1.64 “Security Instrument ” means any security instrument, deed of trust, security deed, contract for deed, deed to secure debt, or other voluntary real property (including leasehold) security instrument(s) or agreement(s) intended to encumber the Property (including leasehold) to provide security for any obligation (including a purchase-money or other promissory note) arising from or relating to financing for the Project, as entered into, renewed, modified, consolidated, increased, decreased, amended, extended, restated, assigned (wholly or partially), collaterally assigned, or supplemented from time to time, unless and until paid, satisfied, and discharged of record. If two or more such security instruments are consolidated or restated as a single lien or held by the same Lender (as applicable), then all such security instruments so consolidated or restated shall constitute a single Security Instrument. A participation interest in a security instrument (or partial assignment of the secured loan) does not itself constitute a Security Instrument.

I.1.65 “Senior” means, referring to multiple Security Instruments, the Security Instrument that has the greatest priority in lien of the same type. Where Senior is used as a comparative term as against any specified Security Instrument, such term refers to any Security Instrument of the same type that is prior in interest to the other specified Security Instrument. If only one Security Instrument of a particular type exists, then it shall be deemed the Senior Security Instrument of such type.

I.1.66 “Senior Loan” has the meaning as set forth in Section 2.2.3.

I.1.67 “State” means the State of California.

I.1.68 “Subordinate Loan” means any loan shown in the Project Budget or through revisions to the Project Budget approved by the Housing Authority Executive Director pursuant to Section 6.2, and which is secured by a Permitted Security Instrument.

I.1.69 “Tax Credit Equity ” means the equity investment toward the cost of development and construction of the Project contributed to the Developer (when in the form of a limited partnership) by the Tax Credit Investor, in the amount set forth in the Project Budget.

I.1.70 “Tax Credit Investor” means the limited partner in Developer (when in the form of a limited partnership) that provides the Tax Credit Equity for the development and construction of the Project.

I.1.71 “Tax Credits” means an allocation from TCAC of 4% federal low income housing tax credits to finance a portion of the Project Costs, all in accordance with Section 42 of the Internal Revenue Code of 1986, as amended, all associated Internal Revenue Service regulations and all associated TCAC regulations.
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11 I.1.72 “TCAC” means the California Tax Credit Allocation Committee or successor in function.

I.1.73 “TCAC Regulatory Agreement” means the extended low income housing commitment within the meaning of Internal Revenue Code Section 42(h)(6)(B) in favor of TCAC, required by TCAC to be recorded against the Property in connection with the award of Tax Credits to the Project.

I.1.74 “Title Company” means First American Title Insurance Company, Attn:

Greg Franke, Title Officer, through its office located at 901 Via Piemonte, Suite 105, Ontario, CA 91764, or such other title company mutually agreed upon in writing by both Housing Authority and Developer
I.1.75 “Title Policy” means an ALTA owner ’s standard coverage policy of title insurance issued by the Title Company, with coverage in the full amount of the _______ and insuring Developer’s fee title to the Property, subject only to the Permitted Exceptions. Developer shall pay for the Title Policy.

I.1.76 “Transfer” means any of the following:

I.1.76.1 Any assignment, conveyance, grant, hypothecation, mortgage, pledge, sale, or other transfer, whether direct or indirect, of all or any part of such property, right or obligation, or of any legal, beneficial, or equitable interest or estate in such property, right or obligation or any part of it (including the grant of any easement, or non-monetary lien or encumbrance); or
I.1.76.2 Any conversion, exchange, issuance, modification, reallocation, sale, or other transfer of any direct or indirect equity interest(s) in the owner of such property, right or obligation by the holders of such equity interest(s); or I.1.76.3 Any merger, consolidation, sale, or lease of all or substantially all of the assets of the Developer or a series of such sales, assignments and the like that, in the aggregate, result in a disposition of more than a 49% interest of all or substantially all of the assets of the Developer; or
I.1.76.4 Any Permitted Transfer; or Except for a Permitted Security Instrument, the recordation of any deed of trust, mortgage, lien or similar encumbrance against all or any portion of the Property or the Project.

I.1.77 “Unavoidable Delay” means any delay that is caused in all material respects by the other Party or that is beyond the control of the Housing Authority or the Developer, including delay caused by strikes, acts of God, pandemics, epidemics, declarations or proclamations of emergency by either the Housing Authority, the State, or the Federal government, weather, inability to obtain labor or materials, inability to obtain governmental permits or approvals, governmental restrictions, civil commotion, fire or similar causes, but excluding circumstances subject to Section VIII.7.1.
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12 I.2 Representations and Warranties.

I.2.0 Housing Authority Representations and Warranties . The representations and warranties of Housing Authority contained in this Section 0 will be based upon the actual knowledge of the Housing Authority Executive Director as of the Effective Date. All representations and warranties contained in this Section 0 are true and correct as of the Effective Date. Housing Authority’s liability for misrepresentation or breach of warranty, representation or covenant, wherever contained in this Agreement, shall survive the execution and delivery of this Agreement and the Closing. Housing Authority hereby makes the following representations, covenants and warranties and acknowledges that the execution of this Agreement by Developer has been made in material reliance by Developer on such covenants, representations and warranties:

I.2.0.2 Housing Authority has taken all requisite action and obtained all requisite consents for agreements or matters to which Housing Authority is a party in connection with entering into this Agreement and the instruments and documents referenced herein and in connection with the consummation of the transactions contemplated hereby.

I.2.0.3 On the Effective Date, the Property is composed of and contains a single legally formed parcels containing a total of approximately 10 acres.

I.2.0.4 Housing Authority is the owner of the entire right, title and interest in and to the Property.

I.2.0.6 To the best of Housing Authority’s actual knowledge, and without independent investigation having been made by Housing Authority, the Housing 19-29

13 Authority has received no written notice of any Hazardous Materials located on, under, or about the Property.

I.2.1 D
eveloper Representations and Warranties . The representations and warranties of Developer contained in this Section I.2.1 s hall be based upon the actual knowledge of Mark Bigley, Vice President, of Developer, as of the Effective Date. All representations and warranties contained in this Section I.2.1 are true and correct as of the Effective Date. The Developer’s liability for misrepresentation or breach of warranty, representation or covenant, wherever contained in this Agreement, shall survive the execution and delivery of this Agreement and the Closing. The Developer hereby makes the following representations, covenants and warranties and acknowledges that the execution of this Agreement by Housing Authority has been made in material reliance by Housing Authority on such covenants, representations and warranties:

I.2.1.1 The Developer is a California limited liability company, lawfully entitled to do business in the State of California. The Developer has the legal right, power and authority to enter into this Agreement and the instruments and documents referenced herein and to consummate the transactions contemplated hereby.

The person(s) executing this Agreement and the instruments referenced herein on behalf of the Developer hereby represent and warrant that such person(s) have the power, right and authority to bind the Developer.

14 contracting parties generally . No approval, consent, order or authorization of, or designation or declaration of any other person, is required in connection with the valid execution and delivery of in compliance with this Agreement by the Developer.

I.2.2 Effective Date. T
his Agreement is dated December 21, 2023, for reference purposes only. This Agreement shall not become effective until the date on which all of the following are true (“Effective Date”) and no later than December 29, 2023: (a) this Agreement is approved and executed by the appropriate authorities of Developer and delivered to Housing Authority; (b) Developer has delivered to Housing Authority a certified copy of the official action taken by all of the entities comprising the Developer approving this Agreement, substantially in the form attached to this Agreement as Exhibit F; (c) following all legally required notices and hearings, this Agreement is approved by the Housing Authority Board; and (d) this Agreement is executed by the authorized representatives of Housing Authority.

I.2.3 Exhibit List . T he following is a list of the Exhibits attached to this Agreement. Each of the Exhibits is incorporated by this reference into the text of this Agreement.

Exhibit A Lega l Description of Property
Exhibit B Scope of Development
Exhibit C Schedule of Performance
Exhibit D Form of Quitclaim Deed
Exhibit E Form of Notice of Agreement
Exhibit F Form of Official Action of Developer
Exhibit G Form of Certificate of Completion
Exhibit H Form of Regulatory Agreement

PROPERTY DISPOSITION
II.1 Purchase and Sale. In exchange for Developer’s payment of the Purchase Price and performance of Developer’s other covenants and undertakings set forth in this Agreement, the Housing Authority shall sell the Property to the Developer and the Developer shall purchase the Property from the Housing Authority pursuant to the terms and conditions of this Agreement.

15 of this Agreement, as may be reasonably requested by the Escrow Holder. In the event of any conflict between the provisions of this Agreement and any other escrow instructions requested by the Escrow Holder, as between the Housing Authority and the Developer, the provisions of this Agreement shall control.

II.2 P
ayment of Purchase Price

2.2.1 Note and Deed of Trust . The Developer shall pay the Purchase Price by depositing it at least 1 business day preceding the Escrow Closing Date.

II.3 Eminent Domain.

If any portion of the Property or any interest in any portion of the Property, becomes the subject of any eminent domain proceeding prior to Close of Escrow, other than such a proceeding by the Housing Authority or City, including the filing of any notice of intended condemnation or proceedings in the nature of eminent domain commenced by any Governmental Agency, the Housing Authority will immediately give the Developer notice of such occurrence, and the Developer will have the option, exercisable within 10 business days after receipt of such notice from the Housing Authority, to either: (a) cancel the Escrow and terminate this Agreement and the Escrow, in which case the Parties and the Escrow Holder shall proceed in accordance with Section

3.10; or (b) continue with this Agreement in accordance with its terms, in which event the Housing Authority will assign to the Developer any right of the Housing Authority to receive any condemnation award attributable to the Property.

16 days, Developer shall be deemed to waive its objection to any items set forth in Developer’s Title Notice.

II.4.1 If at any time prior to the Close of Escrow the Title Company issues an updated Preliminary Report containing any previously undisclosed matter affecting title to the Property, or the Housing Authority becomes aware of any previously undisclosed matter affecting title to the Property following the delivery of the Developer’s Title Notice, the Housing Authority must provide written notice to the Developer of such matter, together with any updated Preliminary Report related to such matter. Subject to the Housing Authority’s obligations under Section 2.4.3 below, the Housing Authority and the Developer will have such rights and obligations with respect to such previously undisclosed title matters as they did with respect to any title matters set forth in the original Preliminary Report as set forth in Section II.4.

Housing Authority makes no representation or warranty to the Developer relating to the condition of the Property or suitability of the Property for any intended use or development by the Developer. If the Developer does not timely deliver its Due Diligence Investigation Rejection Notice prior to the end of the Due Diligence Period, the Developer will be deemed to have accepted the Property in its current condition. If the condition of the Property is rejected, then 19-33

17 either Party will have the right, subject to Section 2.5.3, to cancel the Escrow and terminate this Agreement, in its sole discretion, without liability to the other Party or any other person, by delivery of a written notice of termination to the other Party and Escrow Holder. By its failure to timely deliver its Due Diligence Investigation Rejection Notice, the Developer will accept the condition of the Property in its existing “AS IS,” “WHERE IS” and “SUBJECT TO ALL FAULTS” condition, without any liability of the Housing Authority whatsoever. During the Due Diligence Period the Developer will conduct such environmental assessment(s) of the Property as the Developer deems appropriate. If such assessment(s) do not reveal the presence of any Hazardous Substances on the Property in levels that exceed applicable Governmental Requirements, then the Housing Authority must promptly and at its sole cost and expense install security fencing around the Property. If such assessment(s) do reveal the presence of any Hazardous Substances on the Property in levels that exceed applicable Governmental Requirements, then the Housing Authority and the Developer shall negotiate in good faith in an effort to reach agreement as to the allocation of responsibility and cost of remediation thereof.

18 II.6 Developer to Obtain all Project Entitlements. Developer shall develop and present to Housing Authority staff, for review, the following (collectively, the “Plans and Specifications”), subject to the Housing Authority’s Executive Director’s sole and absolute discretion:

II.6.1.1 A complete conceptual development plan for the Project on the Property that describes and depicts: ( a) the location and placement of proposed buildings and (b) the architecture and elevations of the proposed buildings; II.6.1.2 The proposed unit mix consistent with this
Agreement, showing unit size and affordability levels, including any Housing Authority approved managers’ units, for the Project;
II.6.1.3 A proposed time schedule and cost estimates for the development of the Project on the Property; and
II.6.1.4 A proposed financing plan identifying financing sources for all private and public improvements proposed for the Project; and II.6.1.5 Any and all Construction and Engineering Plans.

Housing Authority’s review and disapproval/approval of such Scope of Development and Construction Plans is outside the context of any review City performs in its regulatory/permitting capacity, and Housing Authority’s review shall be at its sole and absolute discretion. The Developer obtains no right to develop the Project on the Property or any portion of the Property by virtue of this Agreement, except that following the Close of Escrow, the Developer will possess the same rights as any other owner of property within the Housing Authority that desires to develop 19-35

19 its property in a manner consistent with the City’s General Plan. If any revisions of the Scope of Development are required by a Governmental Agency (other than the Housing Authority) having jurisdiction over the Property or the Project, the Developer will promptly make any such revisions that are generally consistent with the Scope of Development.

II.6.5 Developer to Pay All Costs and Expenses . Except as may otherwise be provided in Article VI of this Agreement, the Parties agree that the Housing Authority is under no obligation to provide any financial assistance to the Developer in connection with the Project. The Developer will be solely responsible for paying for the costs of all design work, construction, labor, materials, fees and permit expenses associated with the Project. The Developer must pay any and all fees pertaining to the review and approval of the Project by the Housing Authority, Planning Commission and/or City Council, any other Governmental Agency and utility service providers, including the costs of preparation of all required construction, planning and other documents reasonably required by a Governmental Agency pertinent to the development or operation of the Project on the Property, including, but not limited to, specifications, drawings, plans, maps, permit applications, land use applications, zoning applications, environmental review and disclosure documents and design review documents. The Developer must pay for any and all costs, including, but not limited to, the costs of design, construction, relocation and securing of permits for sewer or utility improvements and connections that may be required in development of the Project, whether located on or off of the Property. The Developer must obtain any and all necessary approvals prior to the commencement of applicable portions of construction, and the Developer must take reasonable precautions to ensure the safety and stability of surrounding properties during said construction. In accordance with this Section II.6.5, Developer will be responsible for the payment of the costs, or immediate reimbursement to the Housing Authority upon delivery of an invoice for the costs, of the following:

20 Governmental Agency, within the time period for such actions specifically set forth in the Schedule of Performance, subject to any extensions of time authorized by this Agreement upon the occurrence of an Unavoidable Delay.

II.7 Delivery of Property Free of Occupants. A
t the Close of Escrow, the Housing
Authority must deliver possession of the Property to Developer free and clear of occupancy by any persons and of any contractual rights created by or with the consent of the Housing Authority for any person or entity (other than Developer) to use or occupy the Property.

II.8 Project Marketing Plan.

At least 45 calendar days prior to the Close of Escrow, Developer must submit to the Housing Authority an affirmative fair housing marketing plan for the Project. Within 10 calendar days after the Housing Authority receives such marketing plan submitted by Developer, the Housing Authority will approve or disapprove such marketing plan. The marketing plan must include provisions to ensure that Developer will use commercially reasonable efforts to market the Project to eligible residents of the City, including but not limited to (a) no later than 90 days prior to completion of construction of the Project, notifying local government and nonprofit agencies serving Low, Very-Low, 40% Households and Extremely Low Income Households ( in the City (a list of suggested organizations will be provided to Developer by the Housing Authority) of the availability of the Qualifying Units and requesting that these organizations assist in publicizing the availability of the Qualifying Units to their members and clients; (b) placing a sign on the Property advertising the availability of the Qualifying Units and providing contact information throughout the marketing period; The Housing Authority’s failure to approve such marketing plan within the specified 10 calendar day period, will constitute Housing Authority’s deemed approval of such marketing plan.

ESCROW INSTRUCTIONS
III.1 Opening of Escrow. For purposes of this Agreement, the opening of Escrow will be the first date on which a fully executed copy of this Agreement is deposited with Escrow Holder (“Escrow Opening Date”) (which may be deposited with Escrow Holder by electronic transmission, if acceptable to Escrow Holder). The Developer must cause the Escrow to be opened within 5 days following the Effective Date. Escrow Holder must promptly confirm in writing to each of the Parties the escrow number assigned to this transaction and the Escrow Opening Date. This ARTICLE III will constitute the joint escrow instructions of the Housing 19-37
ARTICLE III.

21 Authority and the Developer to Escrow Holder for conduct of the Escrow to complete the purchase and sale of the Property between them, as contemplated in this Agreement.

III.2 C onditions to Close of Escrow. The conditions set forth below must be satisfied or waived in writing by the respective benefited Party on or before the Escrow Closing Date or the Party benefited by any unsatisfied condition will not be required to proceed to close Escrow.

III.2.1 Developer’s Conditions to Close of Escrow .

The Developer’s obligation
to purchase the Property from the Housing Authority on the Escrow Closing Date will be subject to the satisfaction of the following conditions precedent, each of which can only be waived in writing by the Developer:

III.2.1.1 T
he Developer agrees, or is deemed to agree, to
accept the title to and conveyance of the Property, pursuant to Section II.4; III.2.1.2 The Developer fails to deliver a Due Diligence Investigation Rejection Notice to the Housing Authority prior to the expiration of the Due Diligence Period;
III.2.1.3 Developer has received a reservation letter from TCAC reserving Tax Credits for the Project;
III.2.1.4 Developer has received the commitments for funding to make the construction and operation of the Project financially feasible consistent with the Project Budget;
III.2.1.5 The Title Company is unconditionally committed to issue the Title Policy for the Property, subject to any Permitted Exceptions, to the Developer;
III.2.1.6 Developer approves the Escrow Holder’s estimated Escrow closing/settlement statement;
III.2.1.7 The representations, warranties and covenants of the Housing Authority set forth in Section 0 are true and correct in all material respects on the Effective Date and on the Escrow Closing Date;
III.2.1.8 The Developer has obtained all entitlements required in connection with the development of the Property, subject to conditions of approval reasonably acceptable to Developer (provided, however, nothing herein shall be interpreted or deemed to prevent or limit the City’s regulatory authority to impose conditions of approval of entitlement), any applicable appeal period has expired without appeal having been filed or, if an appeal is filed, such appeal has been denied, and no legal action has been instituted against Developer or the Housing Authority alleging the invalidity of such entitlements;
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22 III.2.1.9 The Housing Authority has completed all of its material obligations required by this Agreement to be completed prior to the Close of Escrow; and
III.2.1.10 The Housing Authority deposits the items into the Escrow required by Section III.3.

III.2.2.1 The Developer agrees, or is deemed to agree, to accept the title to and conveyance of the Property, pursuant to Section II.4; III.2.2.2 The Developer fails to deliver a Due Diligence Investigation Rejection Notice to the Housing Authority prior to the expiration of the Due Diligence Period;
III.2.2.3 Developer has obtained all approvals of City and Housing Authority, including but not limited to approval of the Construction Plans, which are subject to Housing Authority’s sole and absolute discretion, and subject to City’s review in accordance with its police powers and all applicable federal, state and local laws, rules and regulations.

III.2.2.4 The Developer submits to the Housing Authority evidence satisfactory to the Housing Authority, in the Housing Authority’s reasonable discretion, that the Developer has obtained all entitlements necessary for the development of the Property from each applicable Governmental Agency, including the Housing Authority, including issuance of a grading permit, which must be accomplished no later than seven years after the effective date of this Agreement, as set forth in the Schedule of Performance;
III.2.2.5 The Developer has completed all of its material obligations required by this Agreement to be completed prior to the Close of Escrow; III.2.2.6 The Developer submits to the Housing Authority the Developer’s organizational documents;
III.2.2.7 The Developer submits to the Housing Authority the marketing plan for the Project pursuant to Section 2.8; III.2.2.8 The Developer submits to the Housing Authority a copy of the construction contract for the Project in substantially final form (with a copy of the final construction contract being delivered to the Housing Authority by Close of Escrow);
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23 III.2.2.9 The Developer submits to the Housing Authority copies of the Construction Financing Documents in substantially final form and the Housing Authority has reviewed and approved the form of an amended and restated agreement of limited partnership for the entity established to receive the capital contributions of the Tax Credit Investor (with copies of the final instruments for both being delivered to the Housing Authority through Close of Escrow); III.2.2.10 The Developer submits to the Housing Authority a document evidencing a commitment from the Tax Credit Investor to Developer to provide the Tax Credit Equity;
III.2.2.11 The Developer submits to the Housing Authority documents evidencing a commitment from an Institutional Lender to Developer to provide the Permanent Loan;
III.2.2.12 The Developer submits to the Housing Authority documents evidencing a commitment from the Lender(s) of all Subordinate Loan(s), if any, to Developer to provide the Subordinate Loan(s);
III.2.2.13 Developer has received any other commitments for funding to make the construction and operation of the Project financially feasible consistent with the Project Budget;
III.2.2.14 The representations, warranties and covenants of the Developer set forth in Section I.2.1 are true and correct in all material respects on the Effective Date and on the Escrow Closing Date; and
III.2.2.15 The Developer deposits the items into the Escrow required by Section III.3.

III.3 D
eveloper’s Escrow Deposits. Following satisfaction or waiver of each of the Developer’s conditions to Close of Escrow set forth in Section III.2.1, the Developer shall de
posit the following funds and documents into Escrow at least 1 business day prior to the Escrow Closing Date:

III.3.1 P CO Statement . A PCO Statement executed by an authorized representative of the Developer.

III.3.2 Quitclaim Deed . The Quitclaim Deed , executed by an authorized representative of the Developer, in recordable form.

III.3.3 Notice of Agreement. The Notice of Agreement executed by an authorized representative of the Developer , in recordable form, to be recorded against the Property at the Close of Escrow.

III.3.4 Regulatory Agreement . T he Regulatory Agreement executed by an authorized representative of Developer, in recordable form, to be recorded against the Property at the Close of Escrow.
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24 III.3.5 Construction Financing Security Instrument(s) . Permitted Security Instrument(s) securing repayment of the Construction Financing, executed by an authorized representative of Developer, in recordable form, to be recorded against the Property at the Close of Escrow.

III.3.6 Subor dinate Loan(s) Security Instrument(s) . Permitted Security Instrument(s) securing repayment of such of the Subordinate Loan(s) closing and funding at the Close of Escrow, if any, executed by an authorized representative of Developer , in recordable form, to be recorded against the Property at the Close of Escrow.

III.3.7 Subor dinate Loan Land Use Restriction Agreement(s) . Agreement(s) restricting occupancy and rents in the Project as required by the makers of one or more of the Subordinate Loans, if any, executed by an authorized representative of Developer , in recordable form, to be recorded against the Property at the Close of Escrow.

III.3.8 Subor dination Agreements . Subordination agreement(s) subordinating any financing to this Agreement and the Regulatory Agreement, reasonably approved by the Housing Authority and executed by an authorized representative of Developer, in recordable form, to be recorded against the Property at the Close of Escrow. For the avoidance of doubt, the Regulatory Agreement will be Senior to any lien placed upon the Property or any portion thereof, including the lien of any mortgage.

III.4 Housing Authority’
s Escrow Deposits. Following satisfaction or waiver of each of the Housing Authority’s conditions to Close of Escrow set forth in Section III.2.2, t he Housing Authority must deposit the following documents into Escrow at least 1 business day prior to the Escrow Closing Date:

III.4.1 Qu
itclaim Deed . The Quitclaim Deed executed by the authorized representative(s) of the Housing Authority in recordable form.

III.4.2 FIRPTA Affidavit. The FIRPTA Affidavit completed and executed by the authorized representative(s) of the Housing Authority.

III.4.3 Notice of Agreement. The Notice of Agreement executed by the authorized representative(s) of the Housing Authority in recordable form.

III.4.4 Regulatory Agreement . T he Regulatory Agreement signed by the authorized representative(s) of the Housing Authority in recordable form.

25 III.5 Closing Procedure. When each of the Developer’s Escrow required deposits specified in Section III.3 and each of the Housing Authority’s Escrow required deposits specified in Section III.4 are deposited into Escrow, Escrow Holder must request confirmation in writing from both the Housing Authority and the Developer that each of their respective conditions to the Close of Escrow, as set forth in Section III.2, are satisfied or waived. Upon Escrow Holder’s receipt of such written confirmation from both the Housing Authority and the Developer, Escrow Holder will close the Escrow by doing all of the following:

III.5.1 Recordation of Documents . File the documents set forth in Section III.7 with the Office of the Recorder of the County, for recordation in the order set forth in Section III.7.

III.5.2 D istribution of Recorded Documents . Distribute each recorded document to the Party or person designated for such distribution in Section III.7.

III.5.3 P CO Statement . File the PCO Statement with the appropriate office of the County.

III.5.4 FIRPTA Affidavit . File the FIRPTA Affidavit with the United States Internal Revenue Service.

III.5.5 Title Policy. Obtain and deliver the Title Policy to the Developer.

III.5.6 Funds. Deliver all funds held by the Escrow Holder for the account of Housing Authority to Housing Authority, less any charges to the account of Housing Authority pursuant to the Escrow closing statement approved by the Housing Authority and the terms of this Agreement, and all other remaining funds held by the Escrow Holder for the account of Developer to Developer and less any other charges to the account of Developer pursuant to the Escrow closing statement approved by the Developer and to the terms of this Agreement.

III.6 Close of Escrow.

The Close of Escrow must occur on or before the Escrow
Closing Date. The Housing Authority and the Developer may mutually agree to change the Escrow Closing Date by joint written instruction to the Escrow Holder. The Housing Authority Executive Director is authorized to agree to one or more extensions of the Escrow Closing Date on behalf of the Housing Authority, in the Housing Authority Executive Director’s sole and absolute discretion. If for any reason the Close of Escrow has not occurred by the Escrow Closing Date, as it may have been extended, then any Party not then in default of this Agreement may cancel the Escrow and terminate this Agreement, subject to the notice and cure provisions of Section VII.1 (
to the extent applicable), without liability to any other Party or any other person for such termination and cancellation, by delivering written notice of termination to the other Party and Escrow Holder and, thereafter, the Parties shall proceed pursuant to Section III.10 if the non-terminating Party is not in default or pursuant to Section 7.1 or 7.1.4 (as applicable) if the non-terminating Party is in default. Without limiting the right of any Party to terminate this Agreement pursuant to the preceding sentence, if Escrow does not close on or before the Escrow Closing Date and if no Party has exercised its contractual right to cancel Escrow and terminate this Agreement before such time, then Escrow may close as soon as reasonably possible 19-42

26 following the first date on which Escrow Holder is in a position to close the Escrow pursuant to the terms and conditions of this Agreement.

3.3.8; and (f) any other documents to be recorded through the Escrow upon the joint instructions of the Housing Authority and the Developer. The Escrow Holder will deliver conformed copies of all documents filed for recording to the Housing Authority, the Developer and any other entity or person designated in the written closing escrow instructions of the Parties to receive an original or conformed copy of each such document. Each copy of a document filed for recording shall show all recording information. The Parties intend and agree that this Section 3.7 shall establish the relative priorities of the documents to be recorded in the official records of the County through the Escrow, by providing for recordation of Senior interests prior in time to junior interests, as provided in this Section 3.7.

III.8 Escrow Closing Costs, Taxes and Title Policy Premium. The Developer shall pay the Escrow fees and such other costs as Escrow Holder may charge for the conduct of the Escrow. Escrow Holder will notify the Developer and the Housing Authority of the costs to be borne by Developer at the Close of Escrow by delivering the Escrow Holder’s estimated closing/settlement statement to both the Housing Authority and the Developer at least 4 business days prior to the Escrow Closing Date. The Developer must pay the premium charged by the Title Company for the Title Policy, as well as all recording fees charged as reflected in the approved closing statement, all documentary transfer taxes, all Escrow fees, and any and all other charges, fees and taxes levied by a Governmental Agency arising from the conveyance of any portion of the Property through the transaction contemplated in this Agreement.

III.9 Escrow Cancellation Charges.

If the Escrow fails to close due to the Housing
Authority’s material default under this Agreement and the Escrow is cancelled and this Agreement is terminated, the Housing Authority must pay all ordinary and reasonable Escrow and title order cancellation charges. If the Escrow fails to close due to the Developer’s material default under this Agreement and the Escrow is cancelled and this Agreement is terminated, the Developer must pay all ordinary and reasonable Escrow and title order cancellation charges. If the Escrow fails to close for any reason other than the material default of either the Developer or the Housing Authority and the Escrow is cancelled and this Agreement is terminated, the Developer and the Housing Authority shall each pay one-half of any ordinary and reasonable Escrow and title order cancellation charges.

III.10 Escrow C
ancellation. If this Agreement is terminated and the Escrow cancelled pursuant to a contractual right granted to a Party in this Agreement to terminate this Agreement 19-43

27 and cancel the Escrow, other than due to the material default of another Party, the Parties must do each of the following:

III.10.1 Ca ncellation Instructions. The Parties will, within 3 business days of receipt of Escrow Holder’s written request, execute any reasonable Escrow cancellation instructions requested by Escrow Holder;
III.10.2 Ret
urn of Funds and Documents. Within 10 days of receipt by the Parties of a statement of Escrow and title order cancellation charges from Escrow Holder: (a) the Developer or Escrow Holder shall return to the Housing Authority any documents previously delivered by the Housing Authority to the Developer or Escrow Holder, (b) the Housing Authority or Escrow Holder must return to the Developer all documents previously delivered by the Developer to the Housing Authority or Escrow Holder; (c) Escrow Holder shall return to the Developer any funds deposited by Developer into Escrow, less the Developer’s share of customary and reasonable Escrow and title order cancellation charges as provided in Section 3.9, if any; and (d) Escrow Holder shall return to the Housing Authority any funds deposited by Housing Authority into Escrow if it has already been deposited, less the Housing Authority’s share of customary and reasonable Escrow and title order cancellation charges as provided in Section 3.9, if any.

III.11 Report to IRS. F
ollowing the Close of Escrow and prior to the last date on which such report is required to be filed with the Internal Revenue Service, if such report is required pursuant to Section 6045(e) of the Internal Revenue Code, Escrow Holder must report the gross proceeds of the purchase and sale of the Property to the Internal Revenue Service on Form 1099- B, W-9 or such other form(s) as may be specified by the Internal Revenue Service pursuant to Section 6045(e). Upon the filing of such reporting form with the Internal Revenue Service, Escrow Holder must deliver a copy of the filed form to the Housing Authority and the Developer.

IV.2 Construction Contract; Construction Schedule. Prior to commencing construction of the Project, Developer shall provide the Housing Authority with a copy of a 19-44
ARTICLE IV.

28 stipulated sum-based construction contract or guaranteed maximum price construction contract between Developer and its general contractor for all of the improvements required to be constructed by Developer hereunder, certified by Developer to be a true and correct copy thereof. Developer shall obtain building permits, and commence and complete construction of the Project, by the respective times established therefor in the Schedule of Performance.

IV.4 Construction Start and Completion of Project.

The Developer shall commence construction of the Project no later than the Project Commencement Date, and thereafter to be completed in a good and workmanlike manner in substantial conformity with the approved Plans and Specifications and conditions for the Project approved by the Housing Authority and the Schedule of Performance, subject to Unavoidable Delays. Promptly upon Completion of Construction of the Project, Developer must request that the Housing Authority issue an executed Certification of Completion and if the Housing Authority determines that the final Certificate of Occupancy for the Project has been issued, the Housing Authority must execute and deliver a Certificate of Completion to the Developer. The Developer will, promptly upon completion of the work of improvement(s) for the Project , cause the Project to be inspected by each Governmental Agency with jurisdiction over the Project, must correct any defects and deficiencies that may be disclosed by any such inspection and must cause all occupancy certificates and other licenses, permits and author izations necessary for the operation and occupancy of the completed Project to be promptly issued. The Developer shall do and perform all of the foregoing acts and things and cause all such occupancy certificates, licenses, and authorizations for the Project to be issued on or before the date set forth therefor in the Schedule of Performance as the completion date for the Project. After construction of the Project has commenced, the Developer shall not permit construction of the Project to cease or be suspended for a time period in excess of 30 consecutive calendar days, subject to Unavoidable Delays.

IV.5 Co
mpliance with Laws. All work performed in connection with the development and construction of the Project shall comply with all Governmental Requirements.

29 Unavoidable Delays, the deadline for completion of such task or satisfaction of such condition will be extended on a day-for-day basis equal to the delay caused by such Unavoidable Delays.

IV.7 D eveloper Attendance at Housing Authority Board Meetings. The Developer agrees to have one or more of its employees or consultants who are knowledgeable regarding this Agreement and the development of the Project, such that such person(s) can meaningfully respond to Housing Authority questions regarding the progress of the Project, attend Housing Authority Board when requested to do so on not less than 10 days prior written notice by Housing Authority staff.

Such officers, employees, agents or representatives of the Housing Authority must observe safety protocols generally applicable to all visitors to the Project when on the Property. Any and all Housing Authority officers, employees, agents or representatives who enter the Property must identify themselves at the construction management office when they enter the Property, and must, when on the Property, be accompanied by a representative of the Developer. The Developer must make a Developer representative available for this purpose at all times during normal construction hours, upon reasonable notice from the Housing Authority. The Housing Authority must indemnify and hold the Developer harmless from injury, property damage or liability arising out of the exercise by the Housing Authority of the right of access to the Property provided in this Section 4.6, other than injury, property damage or liability arising from the negligence or willful misconduct of the Developer or its officers, agents or employees. If in the Housing Authority’s reasonable judgment it is necessary, the Housing Authority will have the further right, from time to time, to retain one or more consultants to inspect the Project and verify compliance by the Developer with the provisions of this Agreement. The Developer acknowledges and agrees that any such inspections are for the sole purpose of protecting the Housing Authority’s rights under this Agreement, are made solely for the Housing Authority’s benefit, and that all such inspections may be superficial and general in nature made for the purpose of informing the Housing Authority of the progress of the Project and the conformity of the Project with the terms and conditions of this Agreement. As a consequence of the foregoing, Developer acknowledges and agrees that it will not be entitled to rely on any such inspection(s) as constituting an approval, satisfaction or acceptance of any materials, workmanship, conformity of the Project with this Agreement or otherwise. The Developer agrees to make its own regular inspections of the Project to determine that the quality of the Project and all other requirements of the work of construction of the Project are being performed in a manner satisfactory to the Developer. The Developer also agrees to immediately notify the Housing Authority in writing should the Developer’s inspections or those of the Lender supplying the Construction Financing show any matters that will prevent the entire Project from being completed by the Project Completion Date set forth in the Schedule of Performance. Without limiting the foregoing, the Developer will permit the Housing Authority upon reasonable notice to examine and copy all books and account records and other papers relating to the Property and the construction of the Project. The Developer will use commercially reasonable efforts to cause 19-46

Rancho Mirage City CouncilDecember 21, 2023

Rancho Mirage City Council
December 21, 2023