Agenda — Richmond City Council, April 21, 2026 (part 4 of 4)

Site work for this additional investigation occurred March 20, 2026. Marx Okubo’s scope excluded videoing any lines less than 3” in diameter (because the video camera will not fit in smaller pipes) and the removal of any plumbing fixtures. We were only able to access the sewer lines through two cleanouts serving plumbing systems for the Craneway Pavilion: one in the Women’s Restroom and one exterior cleanout immediately west of the building by the Main Building’s southernmost exterior access door. Due to a lack of available cleanouts, as-built information is somewhat limited; however, enough of the system was able to be viewed through the two cleanout locations to allow Marx Okubo to gain an overall understanding of the systems.

The information in this report must be referenced in conjunction with the updated FCA report to gain a complete understanding of the systems.

General System Description:

There are two separate plumbing systems that serve the Craneway Pavilion or are adjacent to it. Two multi-user restrooms, a wet bar area and a small service kitchen serve the Craneway Pavilion space. Along the north wall of the Craneway Pavilion restrooms, two multi-user restrooms serve the adjacent tenant space in the Main Building. Refer to the attached plans for details on the location of these various rooms and the location of the cleanouts that were used to access the systems. The sewer lines from the Craneway Pavilion restrooms drain to the west side of the building, where they connect to the municipal sewer system underneath Harbour Way South. Piping at the restrooms is either cast iron, but the laterals as they connect to the municipal sewer system are PVC.

The restaurant’s kitchen is provided with separate grease waste and regular sanitary sewer lines. The grease waste exits the restaurant’s kitchen below the north wall (about midway along that elevation), turns to the west just outside of the building footprint, and then turns north to the inlet of a below-ground grease trap of unknown capacity. The discharge from the grease trap travels roughly 300’ north into the Main Building’s sewage ejector sump pump system along the east elevation of the Main Building. This sump pump reportedly discharges into a main sewer lateral immediately north of the Main Building.

Conditions:

The engineer for the Main Building happened to be present on March 20, 2026, and reported that whenever the restaurant’s grease trap overflowed, the sewage ejector station would fill with grease, which would then have to be cleaned out from the sump. He further stated that he was aware of at least one instance when the restaurant’s kitchen experienced a sewer backup, likely caused by an overflowing grease trap. During our site visit, the grease trap was nearly full, and only an inch or two below the rims of the PVC pipes. Significant buildup of debris inside the grease waste pipes inside the kitchen was noted from the video.

DRAFT
746
Brad Wolf
Craneway Pavilion, Addendum 1

SEWER LINE VIDEOSCOPING REPORT - DRAFT
Marx Okubo Project No.: 25-5427
April 1, 2026

Page 3 ends

In the Craneway Pavilion’s service kitchen, no cleanouts were available in the service kitchen to video sewer piping. A plumbing access panel on the north wall of the service kitchen is blocked by the kitchen’s service sink. It is unclear if this access panel serves domestic water lines or waste lines. We were able to access a portion of the Craneway Pavilion’s restroom sewer lines via a wall cleanout in the Women’s room. This provided us with a view of a portion of the sewer lines, which did not appear to have any major blockages or pipe dips, and water drained adequately when toilets were flushed and lavatories flowing. A ground cleanout, located immediately west of the Main Building at the southernmost exterior door, provided us with a second point of access to the sewer laterals serving that area. A main east/west lateral flows out of the building past this cleanout into the municipal sewer system, which turns to the north under Harbour Avenue South. The drainage from the Craneway Pavilion restrooms discharges to this line. This was confirmed by flushing toilets in those restrooms and by running the sink in the service kitchen. Through the video camera, we could see water flowing through the cleanout; we were able to confirm that the service kitchen waste is tied into the same sewer lines as the restrooms.

Conclusions:

We believe that the main complaint that prompted this additional investigation affected the restaurant’s kitchen and was likely caused by the grease trap not being emptied promptly, which caused a backup into the kitchen and caused grease to travel to the Main Building’s sewage ejector. We do not believe that the service kitchen for the Craneway Pavilion was affected by any backups based on the response, when queried, of the Main Building’s engineer.

Marx Okubo recommends the following actions, all of which should be coordinated with the Main Building.

Restaurant kitchen:
• Clean out the grease trap
• Hydrojet all sanitary sewer and grease waste lines
Craneway Pavilion Restrooms and kitchen:
• Hydrojet all sanitary sewer lines
Additional improvements to the plumbing system to increase access and cleanability should be considered. These include:
• Add a wall cleanout in the service kitchen connected to the service kitchen’s floor drains • Add a wall cleanout connected to the Craneway Pavilion’s Men’s room along the restroom’s north wall to provide good access to the main sewer lines

DRAFT
747
Brad Wolf
Craneway Pavilion, Addendum 1

SEWER LINE VIDEOSCOPING REPORT - DRAFT
Marx Okubo Project No.: 25-5427
April 1, 2026

Page 4 ends

Photographs:

Screen capture of video taken from ground cleanout
west of Main Building showing restroom sinks flowing
out of building (from fitting to the right).

Screen capture of video taken from wall cleanout in
Craneway Pavilion’s Women’s Restroom.

Grease trap north of the restaurant.

Discharge portion of the grease trap showing levels
immediately below the rim of the pipe outlet (meant to
flow only clear water).

DRAFT
748
Brad Wolf
Craneway Pavilion, Addendum 1

SEWER LINE VIDEOSCOPING REPORT - DRAFT
Marx Okubo Project No.: 25-5427
April 1, 2026

Page 5 ends

Please do not hesitate to contact me with any questions or concerns.

Sincerely,

MARX OKUBO ASSOCIATES, INC.

Brad Wolf, P.E.

Senior Associate
[email protected]

By email
cc: Tammy Siliznoff, RDH Building Science ([email protected]) Kurt Wenninger, RDH Building Science ([email protected]) DRAFT
749
DRAFT

SERVICE KITCHEN

CRANEWAY

RESTROOMS

SEPARATE TENANT
SPACE

RESTAURANT

ENLARGED

SEWER PLAN
AREA
750
DRAFT
751
COLD
HOT
DRAFT
North is down
on this sheet.

Change between
as-built and design
LINE

VIDEOED
Ground
cleanout
Grease trap
752

PHOTOGRAPHS
DRAFT
753
1 - West elevation.
2 - South elevation.

DRAFT
754
3 - East elevation.
4 - Clogged trench drain along the east perimeter of the building.

DRAFT
755
5 - Rusted area drain located along the south perimeter of the site. 6 - Typical wall-mounted, exterior light fixture on the south elevation of the Craneway Pavilion.

DRAFT
756
7 - Significant cracking and damage on the asphalt pavement along the south perimeter of the site. 8 - Precast concrete paving is provided at the northwest corner of the site.

DRAFT
757
9 - Corroded steel piles at the main pier along the south perimeter of the site. 10 - Metal guardrails provided along the south boarder of the site.

DRAFT
758
11 - Rusted and damaged metal picket fencing, located underneath the pier at the northeast corner of the site.
12 - Monument signage identifying the building name provided at the east parking area.

DRAFT
759
13 - Historical informational signage mounted on metal post is provided along the south elevation of the building.
14 - Multi-panel industrial craneway door provided at the east elevation of the building.

DRAFT
760
15 - A bicycle station for public use is provided on the west side of the site. 16 - Trash dumpsters are provided within the east parking area, adjacent to the Main Building.

DRAFT
761
17 - Exposed ceiling structure and polished concrete flooring within the tenant space. 18 - Interior historic brick and mortar walls.

DRAFT
762
19 - Metal-framed glass entryway door provided at the office/storage space. 20 - Restroom finishes.

DRAFT
763
21 - Typical utility room finishes.
22 - Bar area.

DRAFT
764
23 - Kitchen finishes.
24 - Minor damage to the concrete flooring along the east elevation.

DRAFT
765
25 - Significant damage to the concrete flooring along the east elevation. 26 - Typical ceiling-hung unit heaters in the Craneway Pavilion.

DRAFT
766
27 - Dishwasher exhaust hood in the service kitchen.
28 - Dishwasher exhaust fan on the roof of the small Main Building tower projecting above the main roof.

DRAFT
767
29 - Small Main Building tower projecting above the main roof with HVAC equipment for the service kitchen in the Craneway Pavilion.
30 - Typical outside air supply ductwork and diffusers in the restroom.

DRAFT
768
31 - Typical outside air supply ductwork and diffusers in the service kitchen. 32 - Outside air supply fan for the service kitchen on the roof of the small Main Building tower projecting above the main roof.

DRAFT
769
33 - Backflow preventer adjacent to the restaurant.
34 - Typical urinals in the men's restroom.

DRAFT
770
35 - Domestic water heater serving the restrooms.
36 - Closeup view of the restroom DWH showing signs of leakage and corrosion in drain pan.

DRAFT
771
37 - Domestic water heater for the service kitchen in the adjacent utility room. 38 - One of two water filtration systems for the service kitchen.

DRAFT
772
39 - Electrical yard on the southeast portion of the Main Building. One of these two transformers and termination cabinets serves the Craneway Pavilion.
40 - Termination cabinet that serves the Craneway Pavilion, along with the Visitor Center, restaurant, and other portions of the Main Building.

DRAFT
773
41 - Distribution panels in the Craneway Pavilion office/utility room. 42 - One of two A/V special electrical panels. This is located on the west beam crane's operator's station.

DRAFT
774
43 - The second of two A/V special electrical panels. This is located on the east wall of the Craneway Pavilion.
44 - Typical high-bay LED light fixture in the Craneway Pavilion.

DRAFT
775
45 - Close-up view of typical high-bay LED light fixture. 46 - Typical restroom light fixtures.

DRAFT
776
47 - Lighting control panel.
48 - Timeclock for lighting controls.

DRAFT
777
49 - Abandoned safety switch with damaged front cover on the west wall of the Craneway Pavilion. 50 - A/V system equipment rack in the crane operator's station on the west beam crane.

DRAFT
778
51 - Typical A/V connection panel.
52 - Typical A/V system connection panel.

DRAFT
779
53 - Main fire alarm control panel located in the Main Building. 54 - Satellite fire alarm notification panel in the office/utility room of the Craneway Pavilion.

DRAFT
780
55 - West site water loop connection.
56 - East sprinkler riser.

DRAFT
781
57 - West sprinkler riser.
58 - Window sprinklers enhance fire separation between the areas.

DRAFT
782
59 - Typical fire extinguisher.
60 - Non-illuminated exit sign.

DRAFT
783
61 - Emergency lights are spaced along the south wall.
62 - Partially disassembled beam crane hoist.

DRAFT
784
63 - Beam crane operator's station access ladder with missing bolt. 64 - Typical security alarm station in the Craneway Pavilion.

DRAFT
785
65 - Video camera mounted from the west beam crane support.

DRAFT
786

Appendix C
SLR Environmental Report
787
SLR International Corporation
2175 N California Blvd, Suite 205, Walnut Creek, California, 94596

1 February 2, 2026
Tammy Siliznoff | MS, P.E., LEED AP
Principal, Specialist - Building Enclosure
RDH Building Science Inc.
1901 Harrison Street #1210, Oakland, CA 94612

RE: DRAFT Conditional Assessment Report, Environmental – Craneway Pavilion Historic Ford Assembly Plant, 1414 Harbour Way South Richmond CA

Dear Ms. Siliznoff,
In accordance with your request, SLR is pleased to submit our Inspection report for conducting our inspection services for the Craneway Pavilion portion of Historic Ford Assembly Plant at 1414 Harbour Way South in Richmond CA (Site). The Site consists of the Craneway portion of the historical building built in 1931 that underwent significant renovation in 2007.

SCOPE OF WORK
The following was completed as part of the Scope of Work:

SLR conducted a site reconnaissance on January 8 th to look for conditions that could indicate current or past releases of hazardous substances or petroleum products at the Subject Property.

During the site reconnaissance SLR looked for the following conditions, additional documentation and findings are provided in Attachments 1-4.

1. Asbestos/lead/: survey status, remaining Asbesto s Containing Materials (ACM) / Lead Based Paint (LBP)
Description
ACM is typically observed various locations in buil ding materials including insulation, roofing materials, various tarry glues and substances used to glue, and in window putty, sealants or insulating boards beneath the sills. Historical design documents for the building show presence of corrugated roofing materials containing asbestos . LPB is likely present in the building. The interior and exterior of the building appeared to h ave been coated with new paint in the last 10- 15 years. However the condition of the original pa int was not documented in the original documents that were made available to SLR. It is l ikely that the paint flakes generated during demolition were removed and disposed along with other debris material when the renovation took place. It is also likely that underlying pain con tains lead. Due to the size of the structure and variety and extent of the painted area, limited sam pling of the LBP would not provide a likely confident assessment.
788
Craneway Pavilion Richmond
Draft Conditional Assessment Report
February 2, 2026

2 Condition
SLR inspected the condition of the above materials within the building. The roof is comprised of two sloped panels rising towards the middle on either side. These panels are constructed of Corrugated metal roofing. Under these is a 2-3 inch layer of insulation which acts as acoustic absorption. In the middle is a M shaped structure consisting of glass walls and corrugated transite panels. The panels present on the roof of the building appeared to be in good condition. In some areas with water leakage, sealants appeared to have been applied. The facility drawings label these panels as corrugated asbestos. Suspect ACM may also be present in the window insulation materials. The window putty appeared to have been dry and, in some cases, may have been ready to become friable. The LBP associated with structural steel and associated with other building materials is likely present.

However since the building has been painted in the last 10-15 years, the LBP is likely sealed under the new roll of paint. SLR was not provided any reports related to assessment or management of LBP at the site.

Recommendations
Corrugated roofing material appear to be in good condition. A management plan can be developed to address the need for management of ACM materials in the event the roofing materials need to be repaired or replaced to ensure that all of the BAAQMD, and OSHA requirements are followed. In either case, the building needs to post Prop 65 warnings.

The window putty is in friable condition. They could either be sealed in place or replaced. If they are to be sealed in place, sampling is needed to confirm the presence of ACM in the window sills and putty.

The building should be tested for LBP. It could be performed by a certified inspector with a XRF monitor. In the event the presence of LPB is confirmed, a management plan should be developed.

2. PCB (sash windows/caulks), ballast/transformer
Description
PCBs are generally found in building materials ranging from Caulk, grout, and expansion joints which are frequently manufactured with PCBs for flexibility and adhesion. Putty, silicone, and bitumen-based joint materials are often used around windows, doors, and masonry.

Coatings & Surface Materials. PCBs are also found in glues and plastics as they were added to improve durability.

Related to Electrical & Lighting Components PCBs are found in older fluorescent light ballasts. Many pre ‑1980 ballasts contain PCB oil, which can leak as they age.

PCBs are also found in common older transformers and capacitors.

In addition to the above, PCBs may also be found in flooring adhesives and mastic. There is flooring glued to the concrete floor as the site is used for pickleball. The flooring appears to have been installed in the last 10 -15 years.

789
Craneway Pavilion Richmond
Draft Conditional Assessment Report
February 2, 2026

3 Condition
SLR inspected the condition of the above materials within the building. For this building electricity is provided through transformers that are related to the overall complex.

Transformers related to the building appear to have been upgraded during the facility renovation.

Window calking is typically observed various locations in building materials The window putty appeared to have been dry and, in some cases, may have become friable. The caulking may be impacted with PCBs. The flooring material that is glued to the concrete surface is rather new and likely does not contain PCBs. SLR was not provided any reports related to assessment or management of PCBs at the Site.

Recommendations
The potential for presence of PCB containing oil in electrical equipment is low. The window putty is in friable condition. The putty could either be sealed in place or replaced. Sampling is needed to confirm the presence of PCBs in the window sills and putty. If present, Prop 65 notifications should be placed on the building.

3. Mold/moisture: roof/wall leaks, HVAC condensate issues; spore sampling if warranted.

Description
The building is open space and there are four high capacity natural gas air heaters hung from the ceiling. The exhaust is vented to the roof through metal piping. A water heater was observed near the kitchen area to supply hot water for bathrooms and kitchen operations.

Roof and wall leaks were not readily observed. No evidence of statining from leaks was readily observed.

Condition
The equipment mentioned above appeared to be installed post renovation. No condensate issues or mold was observed. Spore sampling does not appear to be warranted.

Recommendation
None.

4. Indoor air quality: CO
₂, CO, particulate, VOCs (screening), odors.

Description
Indoor air quality is associated with heaters and air conditioning systems for a building.

Additional factors include presence of solvents in the building, or presence of soil impacts or groundwater plumes that may impact the indoor environment through vapor intrusion. The indoor air is heated through forced air heaters powered by natural gas. The heaters are exhausted through the ceiling. There is potential for CO2 and CO escape into the room.

Condition
790
Craneway Pavilion Richmond
Draft Conditional Assessment Report
February 2, 2026

4 The heaters have been installed post facility renovation and are not likely to cause inefficient burn or cracks. The building floor is constructed on piles on top of the bay waters. There are no observed sources of soil impacts that would lead to soil vapor migration to the indoor air.

Recommendation
The heaters should be maintained based on the maintenance schedule and the exhaust piping should be inspected regularly to ensure there are no openings that would lead to escape of CO2 and CO into the building.

5. Universal wastes: lamps, batteries, e-waste storage.

Description
The new ceiling lights have been installed throughout the site. Not batteries or storage areas for battery usage was observed.

Condition
The lights appeared to be in good condition. The facility should designate areas for waste and e waste storage, however at the time of the site visit, it appeared that those storage areas are handled by management company that manages the entire complex.

Recommendation
The facility should designate e-waste and waste storage areas.

6. Fuel systems: generator/day tanks, secondary containment, odor/leak checks .

Description
As indicated previously, natural gas fuels the heater and the water heater onsite. No tanks marked as fuel tanks were observed. A large white 5,000 to 10,000 gallon cylindrical tank was observed below the ceiling at the center of the building. Due to the size of the piping, it was assumed to be a water tank used to feed the water sprinklers in case of fire. No other above or underground storage tanks, or vents or piping showing evidence of underground storage tanks were observed.

Condition
The condition of the tank could not be assessed as the tank could not be reached.

Recommendation
The tank below the ceiling should be assessed.

7. Stormwater compliance: BMPs, grease management for concessions.

Description
The roof stormwater is captured and drains to the San Francisco Bay. The stormwater on the drive ways and walking areas on the side of the building also drain to the Bay. No BMPs were observed, or deemed necessary.
791
Craneway Pavilion Richmond
Draft Conditional Assessment Report
February 2, 2026

5 Condition
The stormwater collection facilities appeared to be in good condition.

Recommendation
None.

8. Wildlife/birds: nesting in trusses/ledges; guano cleanup protocols.

Description
As this is a building in the coastal area, wildlife birds may nest on the roof of the building or in trusses or ledges. State and Federal regulation dictate management of these nests, in the event the building is going to go through renovation. Special consideration should be given and a biological monitor should be used to assess presence of birds and develop a mitigation plan in case there is going to be activities that disturb the birds.

Condition
At the time of the site visit, no migratory bird nests were observed.

Recommendation
The inspection and management of wildlife birds should be incorporated into any schedule associated with site development.

9. Environmental: staining, UST/AST presence, hazardous storage, waste enclosures.

Description
Industrial buildings contain underground and or aboveground storage tanks that contain fuels or hazardous liquids for use in the industrial production. These facilities also have waste enclosures that must meet state and federal regulations for waste storage, accumulation and disposal. Staining is also observed at facilities where such materials are used and it is associated with spills of fuels and hazardous materials.

Condition
During the site visit, no evidence of USTs or ASTs were observed. USTs are often identified by either signs of indentation in the floor, or raised pipes associated with vents or staining at the dispenser area. ASTs are often identified by signs of secondary containment and surface staining. None of these was observed. No evidence of waste enclosures was observed.

Two rail lines were observed in the dock area between the building and the bay. The ground surrounding the rail spurs were paved and no evidence of staining was visible.

However rail lines are often installed on top of creosote posts, and surrounded on slag ballast to allow for a stable surface.

Recommendation
In the event the rail lines are to be disturbed there is potential for presence of impacts associated with either slag ballast or creosote laden poles underneath the tracks. Those impacts should be evaluated prior to start of the project.

792
Craneway Pavilion Richmond
Draft Conditional Assessment Report
February 2, 2026

6 . The assessments above are documented by the inspection list outlined in attachment 1, Photo log in Attachment 2. A deficiency list is outlined below. It is mostly related to testing related to presence and quantification of ACM, LBP and PCBs in building materials.

Deficiency List:

1. Lead, ACM and PCB assessment and Report – $45-65 K. The sampling will be performed based on ASTM and CA standards and provide a document suitable for developing a bid document.

2. Site Assessment for soils adjacent to railroad T racks - $30-40K.

Since the magnitude of the impacts from ACM and LBP impacts are not known and the desired site renovation that may address these areas are no t fully identified, it is difficult to develop a Rough order of magnitude for abatement or management of these issues.

Please call if you have any questions.

Regards,
SLR International Corporation

Mohammad Bazargani, P.E.

Senior Principal
[email protected]

Attachments

1. Completed Inspection Checklists with notes.

2. Annotated Photographic Log organized by system/location.

793
City of Richmond
Craneway Pavilion – Phase 1
January 8, 2026
SLR Project No.: 102.021370.00001

1 Craneway Pavilion
Photo 1: Brick interior wall and windows (1/8/ 2026 )

Photo 2: Interior window putty and sils (1/8/2026 )

794
City of Richmond
Craneway Pavilion – Phase 1
January 8, 2026
SLR Project No.: 102.021370.00001

2 Photo 3: Electrical panels and piping, painted surf aces (1/8/2026)

Photo 4: Ceiling water conveyance pipes (1/8/2026)

795
City of Richmond
Craneway Pavilion – Phase 1
January 8, 2026
SLR Project No.: 102.021370.00001

3 Photo 5: Floor covering (1/8/2026)

Photo 6: Window Panels aged sills (1/8/2026)

796
City of Richmond
Craneway Pavilion – Phase 1
January 8, 2026
SLR Project No.: 102.021370.00001

4 Photo 7: Painted interior wall, Structural frame (1 /8/2026)

Photo 8: Sound Insulation on walls (1/8/2026)

797
City of Richmond
Craneway Pavilion – Phase 1
January 8, 2026
SLR Project No.: 102.021370.00001

5 Photo 9: Building exterior from south west visible railroad tracks (1/8/2026)

Photo 10: Railroad tracks (1/8/2026)

798
City of Richmond
Craneway Pavilion – Phase 1
January 8, 2026
SLR Project No.: 102.021370.00001

6 Photo 11: Corrugated Metal Roof (1/8/2026)

Photo 12: View of Building from South east over Piles (1/8/2026)

799
City of Richmond
Craneway Pavilion – Phase 1
January 8, 2026
SLR Project No.: 102.021370.00001

7 Photo 13: Corrugated Transit Roof (1/8/2026)

800
City of Richmond
Craneway Pavilion – Phase 1
January 8, 2026
SLR Project No.: 102.021370.00001

8 Photo 14: Interior piping tray and heater (1/8/2026)

801
Privileged & Confidential
Attorney-Client Privilege DRAFT

SLR SITE VISIT CHECKLIST AND DOCUMENTATION

Task Completed
Identify Property and Building size(s) to be assessed. Limited to Craneway Pavilion Obtain and review copies of any previous Phase I or Phase II Reports.

None provided. Plan set was
provided and historical
drawings
Identify who provide s access to the Site and their association to the Site. Done
Identify the weather conditions during the assessment. Sunny 60 degress Identify weather -related restrictions . None
Identify facility access restrictions . None. Except tank under the ceiling.

Identify client -related restrictions .

None
Note topography of the Site. Sea Level
Traverse the outer Site boundary. Exterior is asphalt Bay is to the west.

Traverse transects across the Site. Done
Traverse the periphery of all structures on the Site. Went to the roof Visually observe accessible interior areas expected to be used by occupants or the public, maintenance and repair areas, utility areas, and a representative sample of occupied spaces.

Take photographs of the Site (inside and out) and surrounding areas. (Please take at least 20 photos.) See Photo log
Complete additional form s and fields on following pages . Done

802
Privileged & Confidential
Attorney-Client Privilege DRAFT

1. SITE AND SURROUNDING AREA OBSERVATIONS
Access to the Site was provided by ___HDR and City of Richmond __________________ SLR conducted the Site visit on _____January 8, 2026______________________________________ The weather-related conditions at the time of the Site visit were _____sunny__________________ and approximately __60____ degrees Fahrenheit.

1.1 RESTRICTIONS
Restriction Type Comments
Weather-related restrictions: None
Facility access restrictions: Could not access the tank hanging from ceiling Client-related restrictions: None

2. GENERAL DESCRIPTIONS

2.1 SITE AND SURROUNDING AREA DESCRIPTION
Open building, used for pickel ball. Tall ceilings with large windows. In an industrial/harbor part o f Richmond.

2.2 SITE BACKGROUND / OPERATING HISTORY
Historical usage(s) of the Site and
approximate dates of usage: Ford Motor plan, then machinery for WWII, then Ford plan 803
Privileged & Confidential
Attorney-Client Privilege DRAFT
Observed evidence of past Site
use(s):

The boiler/restaurant next door. Rail outside for moving cargo onto ships.

2.3 SITE OPERATIONS
Sewage Disposal Method: City
Electric Utility: PG&E
Water Supply/Provider: EBMUD

3. EXTERIOR OBSERVATIONS
Observation Description
Potential for wetlands, endangered
species, historic landmarks /
structures, and/or archaeological
features to be present at the Site:

The site is likely a historical site.

Roads or paths with no apparent
outlet observed on the Site or
adjacent roadways, alleyways, or
easements:

None
Onsite railroad tracks or spurs: Two spurs parallel with the site and Bay on the docks Farm waste, feed lot spoils, or
manure stockpiles:

None
Evidence of groundwater or surface
water discharge:

None
Known or potential groundwater or
surface water contamination: None identified- Still searching RWQCB and DTSC we b pages
Standing water (sheen?): None observed
On-site pits, ponds, or lagoons
sheen?):

None
Stained soil or pavement sheen?): None
Stressed vegetation: None
804
Privileged & Confidential
Attorney-Client Privilege DRAFT
Observation Description
Polychlorinated Biphenyl (PCB)-
containing equipment including
hydraulic lifts, elevators, and
transformers (labeled?):

The facility has wall to wall windows that appear to be historical. PCB maybe present in caulking in window sills.

Cuts or markings in pavement areas
or parking areas that could indicate
the former or current presence of
USTs or other buried structures:

None observed
Concrete structures that could
indicate the location of former UST
dispensers:

None observed
On -site solid waste disposal
including land filling, dumping,
disturbed soils, or direct burial
activities:

None observed, City of Richmond. The site maybe built on fill.

Wastewater: None
Stormwater (condition of drains,
conveyances, preferential pathways,
sheet flow, dry wells):

Discharges to bay
Roof drains (discharge areas): Discharge to bay
Water wells including monitoring
wells:

None observed
Septic systems (current/historic): None observed
Drum rings, i.e. circular depressions
in asphalt or soil that indicated the
former storage or presence of
drums:

None observed
Evidence of onsite fueling
operations:

None observed
Emergency generators: None observed
Recent improvements,
maintenance, or remodeling: 2007-2012 remodling post Loma Prieta Quake.

Routine painting program:

Contracted? Materials kept onsite? Not known.

Landscaping of grounds:

Contracted? Materials kept onsite? Not known
805
Privileged & Confidential
Attorney-Client Privilege DRAFT
Observation Description
Loading Docks (water collection
sumps/drains; handling
spills/releases):

None

4. INTERIOR OBSERVATIONS
Observation Description
Heating/cooling method (HVAC,
boilers, fuel storage, etc.): 4 gas fired heaters hanging from ceiling Stains or corrosion: None observed interior is painted.

Floor drains and sumps: None observed
Belowground structures,
basements, and/or subsurface
vaults:

None observed
Oil/water separators: None observed
Evidence of lead -based paint (pre -
1978) (and condition): Yes not sure if the paint was over old LBP paint.

Evidence of asbestos -containing
material (and condition): Yes, roof and window sills
Water damage or any evidence of
roof leakage: None evident. May have been painted over.

Any damp odors or standing water
inside the building or basement: None, no basement.

Evidence of m old: None observed, no smell.

Old fluorescent lighting (pre -1980): Lights are new, post 2000 Mercury vapor lamps: None
Paint booths or spray rigs: None

5. HAZARDOUS SUBSTANCES, PETROLEUM PRODUCTS & OTHER WASTE

MATERIALS
Observation Description
Industrial or manufacturing
operations:

Historical car assembly and manufacturing. Not sur e about this specific pavilion area. Overhead cranes were likely used to move parts.

Hazardous substances and
petroleum products: None observed
806
Privileged & Confidential
Attorney-Client Privilege DRAFT
Observation Description
Other chemical usage :

Not known.

Drums ( ≥5 gallons): None observed
Strong, pungent, or noxious odors: None
Pools of liquid:

None
Unidentified substance containers:

None
Garbage and debris:

Managed by facility
Polychlorinated Biphenyl (PCB) -
containing equipment including
hydraulic lifts, elevators, and
transformers:

No lifts, maybe present in window sills or paints
Air emission sources: None currently.

Radiological equipment:

None
Oil or gas well exploration or
refinery activities: None
Known or potential prolonged use,
misapplication or storage/disposal
of pesticides/herbicides:

Not known
Discharges, migration or run -off of
potential contaminants to the Site
from an off-site source:

None

6. UNDERGROUND STORAGE TANKS (USTS)
UST/Structure Observations
Existing USTs: None observed or documented
807
Privileged & Confidential
Attorney-Client Privilege DRAFT
Former USTs: None
Other Underground Structures : Site is on top of piles on the bay

7. ABOVEGROUND STORAGE TANKS (ASTS)
AST Observations
Existing ASTs: None
Former ASTs: None

8. ADJOINING PROPERTIES
Check for (at a minimum) evidence of onsite fueling operations, dry cleaners, automotive repair, oil change/lube operations, etc.

8.1 CURRENT USES OF ADJOINING PROPERTIES
North: Passenger ferry loading
South: Museum
East: Additional office building and restaurant
West: SF Bay

8.2 OBSERVED EVIDENCE OF PAST USES OF ADJOINING PROPERTIES North: None
South: None
East: Ford Plant
West: Port for loading supplies for War

8.3 PITS, PONDS, OR LAGOONS ON ADJOINING PROPERTIES
North: Bay
South: BAy
East: None
West: SF Bay
808
Privileged & Confidential
Attorney-Client Privilege DRAFT

WASTE AND HAZARDOUS SUBSTANCE STORAGE
For sites with heavy chemical use and disposal, please request associated SDS Sheets, as well as hazardous waste disposal records.

Type of Waste or Substance and Size
and Type of Container
Observations:

Condition of containers / Evidence of spillage / Secondary containment present / Who handles disposal / How often
is disposal performed / etc.

Paint cans (insert size)
Is this a solvent-based paint?

Paint thinner (insert size)
Gasoline or fuels
New oil (insert size and type of
container and type of oil)

Used oil (insert size and type of
container and type of oil)

Solvents (insert size and type of
container and type of solvent)

Safety -Kleen type parts washers
Ammonia for refrigeration
Tires (identify types and quantities )
Rubbish (provide a brief description of
contents and an estimate of quantity)

Construction debris (provide a brief
description of contents and an
estimate of quantity)

Other chemicals

809

Appendix D
Tipping Structural Report
810
Structural Condition Assessment Report

RICHMOND CRANEWAY PAVILION ASSESSMENT
1414 Harbour Way S February 19, 2026
Richmond, CA 94804 Tipping Job: 2025.263.00

GENERAL OVERVIEW
The Craneway Pavilion is a roughly 40,000 square foot steel structure with brick facade and infill walls, originally constructed in the 1930s as an assembly plant for the Ford Motor Company. The Craneway Pavilion makes up the south portion of the larger assembly plant building, which extends an additional 950 feet to the north. The remainder of this report will focus on the craneway portion of the structure.

We understand that the building has been leased since 2004 and that it is being returned to the City of Richmond by the current leaseholder. The purpose of this report is to document the structural condition of the building, provide a code evaluation to describe seismic retrofit requirements triggered by certain renovation options, identify key seismic deficiencies, and provide conceptual structural upgrade recommendations to address the identified seismic deficiencies.

As part of our assessment of the existing building, we have performed a Tier 1 seismic evaluation in accordance with ASCE 41-23. The Tier 1 evaluation suggests that there are a number of potentially critical seismic deficiencies at the Craneway Pavilion. A more detailed evaluation could be used to better inform an appropriate scope of voluntary seismic retrofit measures to provide better safety and assurance of asset preservation under a large seismic event. Given the complexity of the structural system, the potential interaction with the remaining assembly plant, and the limitations of a Tier 1 evaluation, we recommend that a more detailed (Tier 3 non-linear response history analysis) evaluation be performed.
811
Richmond Craneway Pavilion Assessment February 19, 2026

INFORMATION REVIEWED
In preparation for this assessment we reviewed the following documents:

1. Original structural and architectural drawings, originally dated May 22, 1930 and prepared by Albert Kahn, Inc. Architects & Engineers.

2. Historical American Engineering Record historical report, dated September 2, 2003 by Fredric L. Quivik.

3. Voluntary structural retrofit drawings prepared by Forell/Elsesser Engineers, Inc., dated July 26, 2002 for permit.

4. Architectural renovation drawings prepared by Marcy Wong & Donn Logan Architects, dated March 15, 2007.

5. Voluntary structural retrofit drawings prepared by Crosby Group, dated November 15, 2007.

We also performed a site walk of the structure on January 6, 2026. During our site visit, we made observations from the ground, but did not remove any finishes. We did not have access to a lift to observe conditions closely at the roof line or truss level.

STRUCTURAL SYSTEM
The structural gravity system consists of steel angle framed monitor trusses at twenty feet on center that are supported by steel wide flange columns and steel beams. The interior clear height is 29ft 4 inches, with the primary truss extending additional 20 feet. The craneway portion of the building is founded on an elevated dock over the water, while the remainder of the assembly plant to the north is founded on spread footings with a conventional slab on grade floor. The dock slab below the Craneway Pavilion is a 9” thick cast in place concrete slab spanning two-way between pile 36” square caps, supported on 18 inch square concrete piles. The pile caps are spaced at approximately ten feet on center with four pile clusters below columns. The exterior portion of the dock to the south of the pavilion is an 18” thick slab, which spans between concrete beams. The concrete beams span between a perimeter row of piles and the south edge of the craneway, along Grid 43.. Per the original drawings, the dock structure was designed to support a live load of 500 pounds per square foot and the upper structure was designed to support two 10 ton cranes along the length of the craneway. These original design loads reflect the original industrial use of the building; for reference, modern design codes for assembly occupancies specify a live load of 100 pounds per square foot (1/5 the capacity of the existing dock slab).
2 of 6
812
Richmond Craneway Pavilion Assessment February 19, 2026 The lateral system of the building consists of steel braced frames in the longitudinal direction and moment frames made up of the steel roof trusses and supporting columns in the transverse direction.

The roof truss top and bottom chord are braced with a combination of rods and angles and monitor framing is braced with steel rods. Expansion joints are called out at transverse bays along Gridlines B and V, as well as between the craneway and the main building to the north along Gridline 39, between gridlines U and W.

A voluntary seismic retrofit was designed in 2002 to be in compliance with the 1998 California Historic Building Code. This retrofit was designed to resist 75% of the 1997 Uniform Building Code seismic load. Key elements of the retrofit included strengthening of existing braces, adding new steel braces on the longitudinal lines of the building, replacing the unreinforced masonry walls with reinforced or anchored masonry and bracing of the masonry parapet. The previous comprehensive retrofit has greatly enhanced the building’s resilience and ability to resist low to moderate seismic shaking; however, the building’s expected performance under a major seismic event is not likely to be adequate to prevent significant damage or risk to occupants.

SEISMIC RETROFIT CONSIDERATIONS
We understand that the building is currently classified as an Assembly occupancy with an attendant Seismic Occupancy Risk Category of III per current code categorizations. Modifications that would trigger a mandatory retrofit of the structure would include:

1. Renovations that increase the building weight by more than 10%

2. Renovations that reduce the lateral force resisting capacity by more than 10%

3. Vertical addition

4. Change in occupancy such that it is re-categorized as Risk Category IV, such as designating it as an essential facility.

If future planned uses do not trigger any of these modifications, then mandatory seismic upgrades are not required by Code, and any seismic improvements undertaken could be voluntary at the Owner’s discretion.
3 of 6
813
Richmond Craneway Pavilion Assessment February 19, 2026

SEISMIC EVALUATION
We have evaluated the existing structure in accordance with a Tier 1 screening as defined in ASCE 41- 23 “Seismic Evaluation and Retrofit of Existing Buildings”. The Tier 1 screening is a checklist evaluation that identifies potential deficiencies based on performance of similar buildings in past earthquakes. For this building we have reviewed checklist S1a: Steel moment frames with flexible diaphragms in the North-South direction, and checklist S2a: Steel brace frames with flexible diaphragms in the East-West direction. For the purpose of this evaluation we are reviewing the Collapse Prevention checklists using the average M factors for Life Safety and Collapse Prevention and using the Basic Safety Earthquake- 2E. This reviews the structure against an earthquake hazard with 5% probability of exceedance in 50 years. See attached checklists for more information.

TIER 1 FINDINGS
The following summarizes the deficiencies identified through the Tier 1 checklists and provides commentary and recommendations on the noted deficiencies. For the purpose of this evaluation, we have evaluated the Craneway Pavilion as a stand alone structure; however, this assumption requires further consideration and verification of actual conditions at the site. If the Craneway is structurally connected to the larger assembly building to the north, the full building would need to be evaluated as a combined structure to gain an accurate understanding of load sharing between the buildings.

In the North-South (moment frame), the primary deficiencies identified in the Tier 1 analysis are as follows:
• The expected seismic movement at the top of the frames is greater than the prescribed drift limit. Excessive movement could result in significant damage of finishes and pounding between the two adjacent buildings. While the Tier 1 evaluation procedure relies on simplifications that may not adequately capture the expected building behavior, the deficiency identified is not unexpected given that these frames were not included in the 2002 retrofit. This check also assumes that the column base can be considered fixed and not pinned. This would need to be verified in the field.
• The member connections are weaker than the checklist limit and are vulnerable to failure in a seismic event. This requires further study and information to better characterize the structural capacity of the existing connections. If deficient, we would recommend strengthening the connections between the truss ends and the columns.
4 of 6
814
Richmond Craneway Pavilion Assessment February 19, 2026 • The columns do not meet the AISC ductility requirements, however they are not significantly over the limit. Based on our judgment, we do not see this as a significant issue.

Note that there are a few evaluation requirements that were not completed due to a lack of information or because the requirements do not apply to a truss-beam moment frames. If further evaluation were to be performed, a more detailed site investigation would be required to characterize the undefined structural elements.

In the brace frame direction, East-West, the primary deficiencies are as follows:
• The braces do not have sufficient strength for the anticipated loading. In a significant earthquake, these members would likely buckle, leaving the pavilion unstable during continued seismic loading.
• We do not have sufficient information to check the brace connections, but it does not appear that the brace connections have sufficient strength to resist anticipated seismic loading. • The beam in the chevron brace along Grid 39 between Grids V and W does not have sufficient capacity to support the unbalanced moment due to brace buckling and tension yielding. This is not a load carrying beam, therefore failure of this beam is not critical to the support of the building; however, we recommend further study and potential retrofit of this beam.

Based on our evaluation of the Tier 1 checklist results, potential retrofit items could include strengthening brace and truss connections, adding new braced frames or strengthening existing braces, and strengthening the chevron beam noted above. If a more detailed understanding of the building’s seismic behavior and expected performance is desired, we recommend further investigations to determine if the Craneway Pavilion is seismically connected to assembly plant to the north as well a Non-Linear Response History (Tier 3) analysis to more accurately evaluate the seismic capacity of the structure.

ADDITIONAL OBSERVATIONS AND RECOMMENDATIONS
We observed significant corrosion and loss of material at a number of the lintels above window openings. At these locations, we recommend removing the compromised steel and stiffening the existing members with new steel.

Corrosion and spalling has been observed at the underside of the concrete dock supporting the craneway structure. The concrete slab and piles were initially designed for 500 pounds per square foot, a significantly higher load than the 100 pounds per square foot that would required for assembly 5 of 6
815
Richmond Craneway Pavilion Assessment February 19, 2026 spaces per current code. Given the excess capacity, we do not judge the underslab deterioration as a structural concern. At these locations, we recommend that any loose concrete be chipped away back to hard, sound concrete, while corroded rebar be removed with a wire brush back to sound metal. We recommend these prepared areas be patched back using steel wire and screws as necessary to secure repair mortar, providing adequate rebar cover.

LIMITATIONS
The recommendations provided herein are general and qualitative in nature. We emphasize that this is a cursory review intended to guide preliminary planning. The conclusions and recommendations outlined herein may be subject to revision on the basis on new information as it becomes available.

Our professional services have been performed exercising the degree of care and skill ordinarily used in like cases by reputable members of the same profession practicing in the same or similar locality under similar circumstances, and using reasonable diligence and judgment in the exercise of professional skill and care. No other warranties, expressed or implied, are made as to the professional advice included in this report. This report has been prepared for The City of Richmond to be used solely for the referenced project. This report has not been prepared for use by other parties and may contain insufficient information for the purposes of other parties or other uses. 6 of 6
816
Table 17-8. Collapse Prevention Structural Checklist for Building Types S1 and S1a Status Evaluation Statement
Tier 2
Reference
Commentary
Reference
Low Seismicity
Seismic-Force-Resisting System
C NC N/A U REDUNDANCY: The number of lines of moment frames in each principal direction is greater than or equal to 2.

5.5.1.1 A.3.1.1.1
C NC N/A U DRIFT CHECK: The drift ratio of the steel moment frames, calculated using the Quick Check procedure of Section 4.4.3.1, is less than 0.030.

5.5.2.1.2 A.3.1.3.1
C NC N/A U COLUMN AXIAL STRESS CHECK: The axial stress caused by gravity loads in columns subjected to overturning forces is less than 0.10 F y. Alternatively, the
axial stress caused by overturning forces alone, calculated using the Quick Check procedure of Section 4.4.3.6, is less than 0.30 F y.

5.5.2.1.3 A.3.1.3.2
C NC N/A U FLEXURAL STRESS CHECK: The average ﬂexural stress in the moment frame columns and beams, calculated using the Quick Check procedure of Section

4.4.3.9, is less than F
y. Columns need not be checked if the strong column –
weak beam checklist item is compliant.

5.5.2.1.2 A.3.1.3.3
Connections
C NC N/A U TRANSFER TO STEEL FRAMES: Diaphragms are connected for transfer of seismic forces to the steel frames.

5.7.2 A.5.2.2
C NC N/A U STEEL COLUMNS: The columns in seismic-force-resisting frames are anchored to the building foundation.

5.7.3.1 A.5.3.1
Moderate Seismicity (Complete the Following Items in Addition to the Items for Low Seismicity) Seismic-Force-Resisting System
C NC N/A U REDUNDANCY: The number of bays of moment frames in each line is greater than or equal to 2.

5.5.1.1 A.3.1.1.1
C NC N/A U INTERFERING WALLS: All concrete and masonry in ﬁll walls placed in moment frames are isolated from structural elements.

5.5.2.1.1 A.3.1.2.1
C NC N/A U MOMENT-RESISTING CONNECTIONS: All moment connections can develop the strength of the adjoining members based on the speci ﬁed minimum yield stress of steel.

5.5.2.2.1 A.3.1.3.4
High Seismicity (Complete the Following Items in Addition to the Items for Low and Moderate Seismicity) Seismic-Force-Resisting System
C NC N/A U MOMENT-RESISTING CONNECTIONS: All moment connections are able to develop the strength of the adjoining members or panel zones based on 110% of the expected yield stress of the steel in accordance with AISC 341, Section A3.2.

5.5.2.2.1 A.3.1.3.4
C NC N/A U PANEL ZONES: All panel zones have the shear capacity to resist the shear demand required to develop 0.8 times the sum of the ﬂexural strengths of the girders framing in at the face of the column.

5.5.2.2.2 A.3.1.3.5
C NC N/A U COLUMN SPLICES: All column splice details located in moment-resisting frames include connection of both ﬂanges and the web.

5.5.2.2.3 A.3.1.3.6
C NC N/A U STRONG COLUMN — WEAK BEAM: The percentage of strong column –weak beam joints in each story of each line of moment frames is greater than 50%.

5.5.2.1.5 A.3.1.3.7
C NC N/A U COMPACT MEMBERS: All frame elements meet section requirements in accordance with AISC 341, Table D1.1, for moderately ductile members.

5.5.2.2.4 A.3.1.3.8
Diaphragms (Stiff or Flexible)
C NC N/A U OPENINGS AT FRAMES: Diaphragm openings immediately adjacent to the moment frames extend less than 25% of the total frame length.

5.6.1.3 A.4.1.5
Flexible Diaphragms
C NC N/A U CROSS TIES: There are continuous cross ties between diaphragm chords. 5.6.1.2 A.4.1.2 C NC N/A U STRAIGHT SHEATHING: All straight-sheathed diaphragms have aspect ratios less than 2-to-1 in the direction being considered.

5.6.2 A.4.2.1
C NC N/A U SPANS: All wood diaphragms with spans greater than 24 ft (7.3 m) consist of wood structural panels or diagonal sheathing.

5.6.2 A.4.2.2
continues
276 STANDARD ASCE/SEI 41-17
Downloaded from ascelibrary.org by Leo Panian on 02/26/18. Copyright ASCE. For personal use only; all rights reserved.

Craneway Pavillion 02/18/2026 Tier 1 Checklist for North-South Direction
Column flanges do not meet the requirements.

Check not applicable for the truss beams.

Only 1 bay
Connections are not fully documented, however, from the information available this is not met.

Connections are not fully documented, however, from the information available this is not met.817 Table 17-8 (Continued). Collapse Prevention Structural Checklist for Building Types S1 and S1a Status Evaluation Statement
Tier 2
Reference
Commentary
Reference
C NC N/A U DIAGONALLY SHEATHED AND UNBLOCKED DIAPHRAGMS: All diagonally sheathed or unblocked wood structural panel diaphragms have horizontal spans less than 40 ft (12.2 m) and aspect ratios less than or equal to 4-to-1.

5.6.2 A.4.2.3
C NC N/A U OTHER DIAPHRAGMS: Diaphragms do not consist of a system other than wood, metal deck, concrete, or horizontal bracing.

5.6.5 A.4.7.1
Note: C = Compliant, NC = Noncompliant, N/A = Not Applicable, and U = Unknown.

Table 17-9. Immediate Occupancy Checklist for Building Types S1 and S1a Status Evaluation Statement
Tier 2
Reference
Commentary
Reference
Very Low Seismicity
Seismic-Force-Resisting System
C NC N/A U DRIFT CHECK: The drift ratio of the steel moment frames, calculated using the Quick Check procedure of Section 4.4.3.1, is less than 0.015.

5.5.2.1.3 A.3.1.3.2
C NC N/A U FLEXURAL STRESS CHECK: The average ﬂexural stress in the moment-frame columns and beams, calculated using the Quick Check procedure of Section

4.4.3.9, is less than F
y. Columns need not be checked if the strong column –
weak beam checklist item is compliant.

5.5.2.1.2 A.3.1.3.3
Connections
C NC N/A U STEEL COLUMNS: The columns in seismic-force-resisting frames are anchored to the building foundation.

5.7.3.1 A.5.3.1
Low Seismicity (Complete the Following Items in Addition to the Items for Very Low Seismicity) Seismic-Force-Resisting System
C NC N/A U REDUNDANCY: The number of lines of moment frames in each principal direction is greater than or equal to 2. The number of bays of moment frames in each line is greater than or equal to 3.

5.5.1.1 A.3.1.1.1
C NC N/A U INTERFERING WALLS: All concrete and masonry in ﬁll walls placed in moment frames are isolated from structural elements.

5.5.2.1.1 A.3.1.2.1
Connections
C NC N/A U TRANSFER TO STEEL FRAMES: Diaphragms are connected for transfer of seismic forces to the steel frames, and the connections are able to develop the lesser of the strength of the frames or the diaphragms.

5.7.2 A.5.2.2
C NC N/A U STEEL COLUMNS: The columns in seismic-force-resisting frames are anchored to the building foundation, and the anchorage is able to develop the least of the following: the tensile capacity of the column, the tensile capacity of the lowest- level column splice (if any), or the uplift capacity of the foundation.

5.7.3.1 A.5.3.1
Moderate Seismicity (Complete the Following Items in Addition to the Items for Very Low and Low Seismicity) Seismic-Force-Resisting System
C NC N/A U MOMENT-RESISTING CONNECTIONS: All moment connections are able to develop the expected strength of the adjoining members based on the speciﬁed minimum yield stress of the steel.

5.5.2.2.2 A.3.1.3.5
continues
Seismic Evaluation and Retro ﬁt of Existing Structures 277 Downloaded from ascelibrary.org by Leo Panian on 02/26/18. Copyright ASCE. For personal use only; all rights reserved.

Craneway Pavillion 02/18/2026 Tier 1 Checklist for North-South Direction818
Table 17-10. Collapse Prevention Structural Checklist for Building Types S2 and S2a Status Evaluation Statement
Tier 2
Reference
Commentary
Reference
Low Seismicity
Seismic-Force-Resisting System
C NC N/A U REDUNDANCY: The number of lines of braced frames in each principal direction is greater than or equal to 2.

5.5.1.1 A.3.3.1.1
C NC N/A U COLUMN AXIAL STRESS CHECK: The axial stress caused by gravity loads in columns subjected to overturning forces is less than 0.10 F y. Alternatively, the
axial stress caused by overturning forces alone, calculated using the Quick Check procedure of Section 4.4.3.6, is less than 0.30 F y.

5.5.2.1.3 A.3.1.3.2
C NC N/A U BRACE AXIAL STRESS CHECK: The axial stress in the diagonals, calculated using the Quick Check procedure of Section 4.4.3.4, is less than 0.50 Fy.

5.5.4.1 A.3.3.1.2
Connections
C NC N/A U TRANSFER TO STEEL FRAMES: Diaphragms are connected for transfer of seismic forces to the steel frames.

5.7.2 A.5.2.2
C NC N/A U STEEL COLUMNS: The columns in seismic-force-resisting frames are anchored to the building foundation.

5.7.3.1 A.5.3.1
Moderate Seismicity (Complete the Following Items in Addition to the Items for Low Seismicity) Seismic-Force-Resisting System
C NC N/A U REDUNDANCY: The number of braced bays in each line is greater than 2. 5.5.1.1 A.3.3.1.1 C NC N/A U CONNECTION STRENGTH: All the brace connections develop the buckling capacity of the diagonals.

5.5.4.4 A.3.3.1.5
C NC N/A U COMPACT MEMBERS: All brace elements meet compact section requirements in accordance with AISC 360, Table B4.1.

5.5.4 A.3.3.1.7
C NC N/A U K-BRACING: The bracing system does not include K-braced bays. 5.5.4.6 A.3.3.2.1 High Seismicity (Complete the Following Items in Addition to the Items for Low and Moderate Seismicity) Seismic-Force-Resisting System
C NC N/A U COLUMN SPLICES: All column splice details located in braced frames develop 50% of the tensile strength of the column.

5.5.4.2 A.3.3.1.3
C NC N/A U SLENDERNESS OF DIAGONALS: All diagonal elements required to carry compression have Kl/r ratios less than 200.

5.5.4.3 A.3.3.1.4
C NC N/A U CONNECTION STRENGTH: All the brace connections develop the yield capacity of the diagonals.

5.5.4.4 A.3.3.1.5
C NC N/A U COMPACT MEMBERS: All brace elements meet section requirements in accordance with AISC 341, Table D1.1, for moderately ductile members.

5.5.4 A.3.3.1.7
C NC N/A U CHEVRON BRACING: Beams in chevron, or V-braced, bays are capable of resisting the vertical load resulting from the simultaneous yielding and buckling of the brace pairs.

5.5.4.6 A.3.3.2.3
C NC N/A U CONCENTRICALLY BRACED FRAME JOINTS: All the diagonal braces frame into the beam –column joints concentrically.

5.5.4.8 A.3.3.2.4
Diaphragms (Stiff or Flexible)
C NC N/A U OPENINGS AT FRAMES: Diaphragm openings immediately adjacent to the braced frames extend less than 25% of the frame length.

5.6.2 A.4.2.1
C NC N/A U SPANS: All wood diaphragms with spans greater than 24 ft (7.3 m) consist of wood structural panels or diagonal sheathing.

5.6.2 A.4.2.2
C NC N/A U DIAGONALLY SHEATHED AND UNBLOCKED DIAPHRAGMS: All diagonally sheathed or unblocked wood structural panel diaphragms have horizontal spans less than 40 ft (12.2 m) and aspect ratios less than or equal to 4-to-1.

5.6.2 A.4.2.3
C NC N/A U OTHER DIAPHRAGMS: Diaphragms do not consist of a system other than wood, metal deck, concrete, or horizontal bracing.

5.6.5 A.4.7.1
Note: C = Compliant, NC = Noncompliant, N/A = Not Applicable, and U = Unknown.

All but S8 brace
Craneway Pavillion 02/18/2026 Tier 1 Checklist for East-West Direction819

Submitted via E-mail

Shasa Curl, City Manager
City Of Richmond
450 Civic Center Plaza
Suite 300
Richmond, CA 94804

Technical Memorandum: Analysis, Considerations, and Challenges of Direct City Operation of the Craneway Pavilion

Dear Ms. Curl:

This Technical Memorandum presents the results of a feasibility analysis conducted by SCIConsultingGroup on behalf of the City Of Richmond (the “ City”) to evaluate the potential for a successful direct City operation of the Craneway Pavilion. Four potential use scenarios for the Craneway Pavilion are presented:
• Non-Operation
• Special Event Venue (e.g. Weddings, etc.)
• Business/Technical Exposition Center
• Recreation Complex

Other considerations associated with direct City operation are also presented.

If you have any questions or require additional information, please do not hesitate to contact me. I can be reached at 707-430-4300 or via email at [email protected].

Sincerely,

John W. Bliss, P.E., President
SCI Consulting Group

820

EXECUTIVE SUMMARY
The City of Richmond has engaged SCI Consulting Group to conduct a cursory assessment of the operational challenges and opportunities associated with the Craneway Pavilion. The City seeks to make an informed decision regarding the facility’s future operations and the City’s potential role in that operation.

Although there are several well-established models for municipalities to operate facilities, (including direct city management, third-party operational partnerships, and private lease arrangements), t his study evaluates the financial requirements, implementation considerations, and comparative advantages of direct city management only.

The following four potential use scenarios are considered for direct city management, with estimated costs:
• Scenario 1: Base (Non-Operational or “mothball”)
o $600,000 annual operating costs
o $0 annual revenue
o -$600,000 annual stabilization impact

• Scenario 2: Special Event (e.g. Wedding, etc.) Venue:
o $1,450,000 annual operating costs
o $560,000 annual revenue
o -$930,000 annual stabilization impact

821

• Scenario 3: Business/Technical Exposition Center:
o $1,480,000 annual operating costs
o $750,000 annual revenue
o -$731,000 annual stabilization impact

• Scenario 4: Recreation Complex:
o $1,400,000 annual operating costs
o $390,000 required startup equipment costs
o $270,000 annual revenue
o -$1,600,000 annual stabilization impact
The above cost estimates are in tended for general planning only, and a more rigorous analysis would be required before the City make a final determination about how to proceed. Note that none of the four evaluated scenarios demonstrated a positive revenue source for the City, and rather, showed a significant annual deficit is likely.

This Tech Memo’s objective is to provide the City with basic finical estimates and operational insights to support the selection of a n operational model that achieves both fiscal sustainability and community benefit.

Craneway Pavillion Facility Background
The Craneway Pavilion is a significant civic asset located within one of the Bay Area’s most historically important industrial complexes : Ford Motor Company’s for mer “Richmond Assembly Plant”, which open in 1930 and later moved to Milpitas in 1956 . It has been on the National Register of Historic Places since 1988.

This 72,000- square-foot Craneway Pavillion facility occupies a prominent waterfront position at the extreme South end of extremely large and repurposed Ford Point complex.

The site represents a notable example of American industrial history, where the legacy of World War II-era manufacturing coexists with contemporary production, retail activity, and ongoing waterfront commerce.

It is s ituated along the San Francisco Bay shoreline and integrated into the Bay Trail system. The facility is adjacent to the Rosie the Riveter WWII Home Front National Historical Park, placing it within a nationally significant heritage corridor that attracts history enthusiasts and educational groups. The surrounding area experiences a st eady flow of manufacturing workers, retail employees, and daily ferry commuters between Richmond and San Francisco, providing a consistent audience for events and demonstrating the area's accessibility and vibrancy.

The waterfront location of the Craneway Pavilion connects it to the broader Bay Area trail network, offering opportunities to capitalize on existing foot traffic and regional visibility.

The Ford Point complex constitutes a distinctive mixed-use environment, combining active industrial operations, retail establishments, transportation infrastructure, and cultural and 822

recreational amenities. Regular ferry service offers direct transit connections to San Francisco and other Bay Area destinations, addressing the common challenge of providing convenient access for event patrons without dependence on personal vehicles.

The location, scale, and historic character of the Craneway Pavilion present substantial opportunities. The primary consideration for the City is determining how to optimize this asset to address both community needs and fiscal sustainability. This Tech Memo offers a comprehensive analysis of operational models and financial requirements to inform decision-making regarding revenue generation.

823

1. ALTERNATIVE OPERATIONAL APPROACHES
There are several well-stablished models for municipalities to operate facilities, including direct city management, third -party operational partnerships, and private lease arrangements. The operational model choice depends on staffing capacity, risk tolerance, control priorities, and market conditions. Complete revenue projections are needed before final recommendations can be made . Aga in, this analysis focusses on direct City management of the facility.

1.1 Direct City Management Model
Key Factors
• Complete control over operations, scheduling, and pricing • All revenue flows directly to city
• Full financial risk and staffing responsibility
Considerations
This model would be the best overall control of the facility but greatest financial and operational risk.

1.2 Third Party-Operated Model
Under third-party management, an experienced venue operator assumes responsibility for staffing, operations, and marketing. A city typically receives base rent plus a percentage of revenues, or revenue sharing after a management fee deduction.

Key Factors
• Transfers staffing recruitment and retention challenges to operator • Provides immediate access to industry expertise and networks • Eliminates procurement constraint issues through operator vendor relationships • Reduces indirect municipal administrative burden
• Operator assumes revenue risk and performance accountability Considerations
Management fees are typically 10 -20% of gross revenue , reducing net city return.

Operator control over scheduling and pricing may limit city priorities for community access.

Contract negotiation and oversight require staff capacity.

1.3 Private Lease Model
Private lease transfers full operational control to a lessee in exchange for fixed lease payments. The City receives predictable revenue without operational involvement.

Key Factors
• Eliminates all staffing and operational challenges
• Provides predictable revenue without performance risk • Minimal ongoing city administrative burden
• Transfers all expertise requirements to private operator 824

Considerations:

City loses operational control and the ability to prioritize community events. Revenue is limited to lease amount regardless of facility performance. The city m ay face political considerations regarding the privatization of a public asset.

Table 1 – Operational-Model Risk Considerations

825

2. FACILITY OVERVIEW AND USE SCENARIOS

2.1 Property Description
The Craneway Pavilion serves as a prominent waterfront event venue situated on the Richmond shoreline, featuring extensive indoor space and panoramic views of the San Francisco Bay. Located within the historic Ford Assembly Building, the pavilion integrates industrial architect ure elements with contemporary infrastructure, providing an environment appropriate for large gatherings, conferences, exhibitions, performances and other private events.

The interior space is column-free with 40-foot ceilings that accommodate diverse staging, lighting, and production configurations. Floor -to-ceiling windows provide natural light throughout the day and views of sunsets in the evening. The adjacent grounds f eature outdoor terraces and direct waterfront access, enabling planners to incorporate indoor - outdoor programming.

Craneway Pavilion is located on the far left of the above map of the Ford Point

2.2 Operational Use Scenarios
• Special Event Venue: Private events, weddings, and corporate functions. This model can likely coexist as a standalone model or with Exposition Center operations. • Business/Exposition Center: Trade shows, conventions, exhibitions, and community events. This model c an likely coexist as a standalone model or with Wedding Venue operations included.
• Recreation Complex: Indoor sports facility with batting cages, basketball, volleyball, and soccer areas.

826

2.3 Scenario 1: Non-Operation (Mothball) of Facility
Below in Table 2 is a summary of estimated costs for a non-operation of the facility. One consideration would be to mothball the facility while determining its best use.

Table 2 – Non-Operation Annual Costs

827

2.4 Scenario 2: Special Event (e.g. Wedding, etc.) Venue:

Below are the additional estimated costs for the City to directly operate a special event venue. These costs are added to the base costs ($619,000) as outlined in the previous section to determine the overall annual costs.

Table 3 Special Event Venue Additional Staffing Costs

Table 4 Special Event Venue - Additional Other Operating Costs

Total Annual Operational Costs = $1,495,400 (619k+554k +394k) Revenue
The revenue projections presented below assume fully-booked events event throughout the year. This scenario is optimistic yet achievable for a successfully marketed venue with established industry relationships. Actual performance in the initial years may vary as the venue builds market awareness and develops its client base. These calculations are based on the reasonable assumption:
75 events (e.g. Weddings, Quinceañeras, etc.)
$7,500 per event
= revenue of $562,000.

Table 5, below, summari zes costs and revenues and estimates an overall re venue shortfall of -$932,900 per year.

828

Table 5 Special Event Venue - Summary

Key assumptions include:
• Steady monthly booking activity throughout the operational year • Mix of corporate events and community gatherings
• Average event duration and setup/teardown requirements aligned with industry standards
• Competitive but sustainable pricing that reflects the venue's unique attributes Considerations:

The Craneway Pavilion holds a very distinctive position in the greater Bay Area market.

Due to its large capacity, historic architecture and waterfront location, the venue offers a combination of features that are unmatched by existing special event facili ties in the region. This uniqueness opens up an opportunity for the Craneway to establish itself as a premier destination venue and tap into an unmet market demand for larger -scale waterfront event spaces.

Due to the absence of market comparables, revenue projections are based on historical rental rates from the period when the building previously operated as an event space.

These rates offer a grounded foundation for financial modeling, while acknowledging that actual performance will depend on market conditions, competitive positioning, and operational execution.

However, as reference, below are several local wedding venues and pricing:

Venue Size Fee per Event
Rockefeller Lodge San Pablo CA, 20,000 sqft. $5,000
Richmond Civic Center Richmond CA, 20,000 sqft. $5,000
Fern Cottage Richmond CA, 1,000 sqft. $1,600
Fair View Napa CA, 3,000 sqft. $5,000 to $20,000
The Brazilian Room Berkeley CA, 2,000 sqft. $500 to $5,538

829

2.5 Business/Technical Exposition Center
Below are the additional estimated costs for the City to directly operate a Business/Technical Exposition Center: These costs are added to the base costs ($619,000) listed in section 2.3 to determine the overall annual costs.

Table 6 Business/Technical Exposition Center - Additional Staffing Costs

Table 7 Business/Technical Exposition Center - Additional Other Operating Costs

Total Annual Operational Costs = $1,481,000 (619k + 540k + 322k) Revenue
The revenue projections presented below assume fully-booked conference and exposition events event throughout the year. This scenario is optimistic yet achievable for a successfully marketed venue with established industry relationships. Actual performance in the initial years may vary as the venue builds market awareness and develops its client base. These calculations are based on the reasonable assumption:
150 day events (e.g. conferences etc.)
$5,000 per day
= revenue of $750,000.

Table 8, below, summarizes costs and revenues and estimates an overall revenue shortfall of -$731,000 per year.

830

Table 8 Business/Technical Exposition Center - Summary

Key assumptions:
• Steady monthly booking activity throughout the operational year • Mix of corporate events and community gatherings
• Average event duration and setup/teardown requirements aligned with industry standards
• Competitive but sustainable pricing that reflects the venue's unique attributes Considerations:

Event centers in the Bay Area vary widely in size and capacity. The list below outlines a representative set of facilities that can be used for comparative cost analysis.

Venue Size Fee per Day
Cow Palace: San Francisco CA, 30,000 sqft (Main Area) $10,000 to $21,000 Richmond Civic Center: Richmond CA, 20,000 sqft. $5,000 Impact Hub Oakland: Oakland CA, 16,000 sqft $6,000
El Cerrito Community Center: El Cerrito CA. 5,600 sqft $1500 Hillside Club: Berkeley CA, 2,000 sqft $2000
831

2.6 Scenario 4: Recreation Complex:

Below are the additional estimated costs for the city to directly operate a Recreation Complex: These costs are added to the base costs ($619,000) as outlined in the previous section 2.3 for overall annual costs.

Table 9 Recreation Complex – Startup Equipment Costs

Table 10 Recreation Complex - Additional Staffing Costs

Table 11 Recreation Complex - Additional Other Operating Costs

Total Annual Operational Costs = $1,943,300 (619k + 387k + 623k + 314k) Revenue
36 paying participants per day
300 days operation per year
$25 per participant
= revenue of $270,000

832

Based on average rental rates observed at comparable nearby sports facilities, annual revenue is estimated at approximately $270,000. The first year is notably more expensive due to the additional startup cost
Table 12, below, summarizes costs and revenues and estimates an overall revenue shortfall of -$1,673,300 per year.

Table 12 Recreation Complex - Summary

Key assumptions:
• Batting cages, basketball court, volleyball court, turf soccer field, scoreboards • Steady monthly booking activity throughout the operational year • Competitive but sustainable pricing that reflects the venue's unique attributes Considerations:
• Replacement intervals of approximately 12 years for basketball/volleyball court tiles and soccer turf
• Sports Complex operation requires additional specialized expertise in sports programming, league management, and recreational facility operations beyond venue event management

833

3. OTHER MUNICIPAL OPERATIONAL CONSIDERATIONS
Below is a brief discussion of operation considerations.

3.1 Staffing and Expertise Requirements
Specialized Skill Sets Required
Venue management requires specialized expertise not typically found in municipal government, including event sales and marketing, customer relationship management, technical production oversight, and hospitality service delivery.

Recruitment Challenges
Competitive compensation for venue management professionals may exceed standard municipal salary ranges. Civil service hiring processes may limit the ability to recruit candidates with private sector event management experience. The City of Richmond may have limited labor market depth for specialized venue positions.

Training and Development
Building internal capacity requires time and resources. Staff would need training in event booking systems, venue management software, technical equipment operation, and customer service protocols specific to event venues.

3.2 Operational Constraints
Below are operational constraints to consider.

Procurement and Vendor Management
Municipal procurement rules may limit flexibility in vendor selection and contracting. Event venues require responsive vendor relationships for catering, AV equipment, staging, and specialty services. Competitive bidding requirements may conflict with need for established, reliable vendor partnerships.

Budget Cycle Limitations
Annual budget cycles may not align with venue operational needs. Dynamic pricing strategies, marketing campaigns, and equipment upgrades may require mid-year budget adjustments. Revenue volatility creates challenges for fixed annual budget planning.

Decision-Making Speed
Event bookings often require rapid response to inquiries and contract negotiations.

Municipal approval processes may create delays in pricing decisions, contract execution, and operational changes that affect competitiveness in the event venue market.

3.3 Expertise Gaps
Marketing and Sales
834

Successful venue operation requires proactive sales efforts, including attendance at industry trade shows, relationship building with event planners, digital marketing expertise, and customer relationship management. These capabilities may not currently exist within city departments.

Technical Production
Event production involves audiovisual systems, lighting design, rigging safety, and technical troubleshooting. While staff can be trained, building this expertise requires time and may involve multiple hires to ensure coverage.

Industry Networks
Established venue operators benefit from industry relationships with event planners, booking agents, and corporate clients. Municipal operation would start without these networks, requiring significant time to establish market presence.

3.4 Indirect Municipal Costs
Direct operating costs do not capture full municipal burden:
• Human Resources: Recruitment, onboarding, payroll processing, benefits administration
• Finance Department: Accounts payable, revenue processing, budget monitoring, financial reporting
• Legal Services: Contract review, liability management, compliance oversight • Information Technology: Systems support, booking software, network infrastructure • Administrative Overhead: Facilities, utilities, general city services allocated to the operation
Note: Indirect costs typically add 15- 25% to direct operating expenses but are not quantified in this preliminary analysis.

835

4. OTHER IMPLEMENTATION CHALLENGES
Below is a discussion of implementation challenges to consider.

4.1 Startup Timeline
Staffing Lead Time
Recruiting qualified venue management staff through municipal hiring processes typically requires four to six months. Specialized positions may take longer due to limited candidate pools. Building a complete team could extend six to nine months from authorization to full staffing.

Market Entry
Establishing market presence requires marketing campaign development, website creation, sales collateral production, and relationship building with event planners and corporate clients. Revenue ramp-up may be slower under municipal operation due to lack of existing industry relationships.

4.2 Ongoing Operational Challenges
Staff Retention
Event venue work involves irregular hours including evenings and weekends. Turnover in hospitality industry positions is typically high. Municipal benefit structures may not fully compensate for schedule demands, potentially affecting retention of quality staff.

Performance Management
Venue success requires customer service excellence and operational responsiveness.

Municipal performance management systems may not align well with hospitality industry standards and metrics.

Seasonal Fluctuations
Event venue revenue typically experiences significant seasonal variation. Managing staffing levels and cash flow through peak and off-peak periods presents challenges within municipal budget and employment frameworks.

4.3 Risk Factors Specific to Municipal Operation
• Political oversight may limit operational flexibility and pricing autonomy • Public scrutiny of operating deficits may affect long-term viability • Competing municipal priorities may affect resource allocation • Limited ability to respond quickly to market changes or opportunities Potential conflicts between revenue maximization and community access goals 836

5. CONCLUSION
The Craneway Pavilion represents a significant revenue opportunity for the City of Richmond, ranging from $270K to $750k. However, there are significant operational costs associated with this revenue that are estimated to run from $1.0M to $1.6M. As such, the City’s direct operation of the facility brings significant financial risk.

The operational model choice involves fundamental trade-offs between control, risk, and revenue potential. City operation provides maximum control but requires specialized staffing and assumes full financial risk. Third- party and lease models reduce risk and staffing needs but limit control and revenue upside.

The financial analysis of the four operational scenarios reveals that none would achieve self-sufficiency without substantial ongoing subsidization. Under Scenario 1 (Base/Non - Operational), maintaining the facility in a dormant state would require $600,000 annually with no offsetting revenue.

Activating the facility as a special event venue (Scenario 2) would increase operational costs to $1,450,000 while generating approximately $560,000 in annual revenue, resulting in a net annual funding gap of $930,000. Similarly, converting the property to a business/technical exposition center (Scenario 3) would require $1,480,000 in operating costs against projected revenue of $750,000, leaving a $731,000 annual deficit —the smallest shortfall among the active-use scenarios.

The recreation complex option (Scenario 4) presents the most challenging financial profile, requiring not only $1,400,000 in annual operating costs and generating only $270,000 in revenue, but also necessitating $390,000 in initial equipment investment. This scenario would require ongoing stabilization funding of approximately $1,600,000 in the first year.

In summary, all scenarios analyzed would necessitate significant and ongoing public subsidy, ranging from $600,000 to $1,600,000 annually depending on the operational model selected.

Our recommendation would be to combine Scenarios 2 and 3 and run them in tandem for minimal losses if the City chooses to directly operate this facility. Subsidized funding would still be necessary.

837

REUSE CONCEPT DEVELEOPMENT AND ECONOMIC ANALYSIS FOR CRANEWAY BUILDING Prepared for: City of Richmond Submitted by: Date: December 18, 2025 838
Land Econ Group 2
2 General and Limiting Conditions Every reasonable eﬀort has been made to ensure that the data and informaCon contained in this report are accurate as of the date of this study. However, factors exist that are outside the control of Land Econ Group (LEG) that may aﬀect the esCmates and forecasts contained herein. This study is based upon research informaCon, esCmates, assumpCons and forecasts developed by Land Econ Group and its subconsultants from independent research eﬀorts and knowledge of the industry. LEG does not assume responsibility for inaccurate informaCon provided by the clients, the client’s agents and representaCves, or other data sources used in the preparaCon of this study. The report is based upon informaCon current as of December 2025. LEG has not undertaken any updates of its research since such date. Because future events and circumstances, many of which are not known or predictable as of the date of this study, may aﬀect the esCmates contained therein, no warranty or representaCon is made by Land Econ Group that any of the projected values or results contained in the study will actually be achieved. 839
Land Econ Group 3
3 Table of Contents I. INTRODUCTION ........................................................................................................................................................................................ 5 II. EXECUTIVE SUMMARY .............................................................................................................................................................................. 5 Operations of the Event Center ................................................................................................................................................................................ 5 Longer Term Vision Includes a Hotel at the Southern End of Terminal 3 ................................................................................................................. 6 III. PUBLIC USES ALLOWED BY THE STATE LANDS COMMISSION ..................................................................................................................... 9 IV. CASE STUDIES ......................................................................................................................................................................................... 10 Foss Waterway Seaport in Tacoma ........................................................................................................................................................................ 10 Fort Mason Center in San Francisco ....................................................................................................................................................................... 15 The Bridge Yard Building in Oakland ....................................................................................................................................................................... 19 Pier 70 Building 12 on San Francisco Waterfront ................................................................................................................................................... 21 Alternatives for Operating the Craneway Pavilion ................................................................................................................................................. 22 V. A LONGER-TERM STRATEGY FOR A NEW RICHMOND LIVING ROOM ....................................................................................................... 26 Advantages for WETA ............................................................................................................................................................................................. 27 Advantages for the Craneway Event Center Operator ........................................................................................................................................... 28 Advantages for the Hotel Developer and Operator ................................................................................................................................................ 28 Advantages for the City of Richmond ..................................................................................................................................................................... 28 Outlook for Hotel Development ............................................................................................................................................................................. 28 840
Land Econ Group 4
4 Index of Tables Table 1: Estimated Craneway Building Operating Cost for 2025 ................................................................................................................................ 25 Table 2: Hotel Market Trend in the Northeast Bay .................................................................................................................................................... 29 Table 3: Competitive Hotels in the Market Area ........................................................................................................................................................ 30 Index of Figures Figure 1: Hotel Development Concept at the Ferry Terminal (not final image) ........................................................................................................... 7 Figure 2: Foss Waterway Seaport Building ................................................................................................................................................................. 11 Figure 3: Interior of Foss Waterway Seaport Building ................................................................................................................................................ 12 Figure 4: Fort Mason Center ....................................................................................................................................................................................... 16 Figure 5: The Gateway Pavilion .................................................................................................................................................................................. 17 Figure 6: FMCAC Revenue and Expense Summary for 2024 ...................................................................................................................................... 18 Figure 7: The Bridge Yard at the Base of the Bay Bridge ............................................................................................................................................ 19 Figure 8: Wedding Reception at the Bridge Yard ....................................................................................................................................................... 20 Figure 9: Hotel Development Concept Site Plan at the Ferry Terminal ...................................................................................................................... 26 841
Land Econ Group 5
5 I. INTRODUCTION The Craneway Pavilion is a stunning historic building located on the San Francisco Bayfront and enjoys magniﬁcent views of not only the bay but also Downtown Oakland and Downtown San Francisco in the distance. Both the building and the bay frontage have been designated for public access and public use. Due to the public use mandate, the longCme lessee has been unable to generate suﬃcient revenue to cover operaCng costs of the building aber acempCng mulCple reuse concepts including an event center and a pickleball facility. The lessee has recently proposed returning this building as a gib to the City of Richmond, the lessor of the property. City staﬀ and leadership are interested in regaining control of this historic waterfront building but are concerned with ﬁnancial implicaCons of such a decision. Because the operaCng cost to sustain public use of the building could be a signiﬁcant annual burden on the City’s General Fund, the City has requested that Land Econ Group (LEG) develop and analyze reuse concepts that saCsfy the criteria of public use and minimize the ﬁnancial burden on the City. With the following scope of work, LEG proposes to explore reuse alternaCves and their ﬁnancial implicaCons on the City of Richmond. II. EXECUTIVE SUMMARY Opera&ons of the Event Center Using a case study approach, we idenCﬁed and analyzed several waterfront historic buildings designated for public use. The most informaCve of the case studies include the Foss Waterway Seaport in Tacoma Washington, the Fort Mason Art and Cultural Center along the northern waterfront of San Francisco, the Bridge Yard at the eastern end of the Bay Bridge in Oakland and the Building 12 in the Pier 70 redevelopment in San Francisco. The lessons from the case study research indicate three opCons for the operaCon of the Craneway Pavilion: 1) Long term lease to a non-proﬁt serving the public mission of this historic building, 2) Contract with a commercial for-proﬁt venue operaCng company, and 3) Direct management and operaCon by a City department or bureau. Given the advantages and disadvantages of each approach, we favor a long-term lease to a non-proﬁt if such an organizaCon can be found. Contract management by a commercial venue operator is a second choice provided the contract details the expected public usage and sets parameters for private commercial usage. We do not recommend direct City operaCon for reasons of lower cost eﬃciency due to regulatory requirements and the Cme-consuming public decision process hampering negoCaCons with potenCal users. 842
Land Econ Group 6
6 In terms of operaCng economics, a ramp up period of 18 months is likely required for event revenue to cover both building and staﬀ operaCng cost. There will be a correlaCon between the amount of front-end investment that a lessee or operator needs to bring to reacCvate the building and the length of lease period required to recoup the front-end investment. Longer Term Vision Includes a Hotel at the Southern End of Terminal 3 For the Craneway to operate successfully as a public serving event center, a hotel development at the southern end of Terminal 3 would provide considerable synergy. Our recommended strategy is for the City to build a public garage of approximately 350 stalls on the current ferry parking site that is controlled by WETA the ferry operator unCl 2047. The annual land lease payment by the hotel for this highly desirable waterfront locaCon with ferry service, hotel parking and a historic Craneway building available for corporate and private events should cover the bond amorCzaCon cost of the public parking garage and generate an annual surplus of approximately $300,000. The City should oﬀer to share this surplus with WETA to encourage lease revision to facilitate this hotel development. The San Francisco Bay Area is in the mid stage of a hotel market recovery powered in part by the return to oﬃce movement and the explosive growth of AI ﬁrms. The City of Richmond lacks a desCnaCon hotel, and the northeast bay waterfront has experienced no new hotel development since 2016. The current Cming is ideal for the planning of a new desCnaCon waterfront hotel at the Richmond ferry terminal for construcCon in the 2027 to 2029 Cmeframe. The reacCvaCon of the Craneway Pavilion as an event center with the reopening of the former Assemble restaurant plus public investment in a parking structure make hotel development at the Richmond ferry terminal all the more acracCve. Financial Implica&ons of the Alterna&ves Since the alternaCves are very conceptual at this stage, a detailed ﬁnancial analysis is premature. However, Land Econ Group is able to provide some preliminary opinions of the General Fund implicaCons of three hypotheCcal alternaCves once operaCon is stabilized: 1) Direct City OperaCon of the Craneway Pavilion – NegaCve $250,000 to $500,000 per year 2) Lease to a Non-proﬁt or Commercial Operator – Breakeven to $150,000 per year 3) Hotel Development with Parking Structure in Support of Event Center – PosiCve $800,000 to $1,100,000 including TOT receipts 843
Land Econ Group 7
7 Figure 1: Hotel Development Concept at the Ferry Terminal

844
Land Econ Group 8
8 845
Land Econ Group 9
9 III. PUBLIC USES ALLOWED BY THE STATE LANDS COMMISSION “The City is the current owner of the Craneway Pavilion. In 2004 the City and the State of California, acCng through the State Lands Commission (“SLC”), entered into a Title Seclement Agreement to encumber the Craneway Pavilion with a Public Trust Easement, which restricts the uses of the Craneway and the surrounding parcel to ensure public access for certain acCviCes related to overnight accommodaCons, restaurants and cafes, water-related industry and museums, visitor service retail, or boaCng and ferry services.”1 The State Lands Commission (SLC) will allow uses that serve a public purpose and are consistent with the Public Trust. The following are typical of the uses commonly authorized for historic buildings on public trust lands: • Museum / cultural center / exhibit space / historic interpretaCon — classical public uses for historic buildings. • EducaConal / research / visitor-interpreCve uses — school programs, visitor centers, research connected to the site’s history or natural resources. • Public oﬃces and nonproﬁt space where the occupants provide public services or programs. • Visitor-serving retail and concessions (cafés, gib shops, CckeCng) — commonly permiced as long as they support and do not exclude public access or convert the trust land to private use. • Event / performance space for public events — permiced if managed to preserve public access and the historic resource. • Water-dependent commerce or mariCme uses (if the building/site is over/adjacent to Cdelands or submerged lands) — these are high-priority trust uses. Venues are permiced to charge rent or fees to cover operaCng costs, allow for lease payments to the public agency landlord and make capital investment to sustain the historic building and substructure. 1 City Attorney’s Council Agenda Report, March 26, 2024 846
Land Econ Group 10
10 IV. CASE STUDIES The following four case studies provide examples of how similar buildings have been operated successfully to minimize ﬁnancial burden on the public agency owner. Foss Waterway Seaport in Tacoma The Foss Waterway Seaport is located at 705 Dock Street in Tacoma, Washington in the original Balfour Dock building. It is on the shores of Commencement Bay between Downtown Tacoma and the Port of Tacoma. The building is approximately 45,000 square feet in size and was originally a wheat and Cmber warehouse that was reopened with a major retroﬁt in 2013. The building is owned by the Foss Waterway Development Authority (FWDA) which is an economic development arm of the City of Tacoma. The Foss Waterway Seaport is a heritage museum and event venue and leases the building from FWDA. This 125-year-old building on the Tacoma waterfront is now equal parts mariCme museum, educaCon facility, boat shop, dock, moorage and event venue. The mission of the Foss Waterway Seaport is to celebrate Tacoma’s rich mariCme heritage and to provide the community with an educaConal and recreaConal resource. The Seaport houses a collecCon of primarily small watercrab. These original arCfacts include canoes, rowboats, racing shells, and pleasure crab that were used by the people of the Paciﬁc Northwest for over a century. The back end of the building contains a newly renovated boat shop that allows for carpenters, shipwrights and community volunteers to hand-build wooden boats and other wood related projects. This boat shop allows for the tradiCon of wooden boat building to be sustained in the Paciﬁc Northwest. The meeCng facility has recepCon capacity for 600, theater capacity for 400 and banquet capacity for 400. The building is similar in size, shape and seong to the Craneway Pavilion. 847
Land Econ Group 11
11 Figure 2: Foss Waterway Seaport Building

848
Land Econ Group 12
12 Figure 3: Interior of Foss Waterway Seaport Building Legal and Financial Structure The building is owned by the Foss Waterway Development Authority and leased to Foss Waterway Management LLC, which operates the Foss Waterway Seaport museum and event center. The tenant paid an annual base rent in accordance to the following schedule: • 2015 (Year 10) — $27,805.06 • 2016 (Year 11) — $28,639.21 • 2017 (Year 12) — $29,498.38 • 2018 (Year 13) — $30,383.34 • 2019 (Year 14) — $31,294.84 • 2020 (Year 15) — $32,233.68 849
Land Econ Group 13
13 • 2021 (Year 16) — $33,200.69 • 2022 (Year 17) — $34,196.71 • 2023 (Year 18) — $35,222.61 • 2024 (Year 19) — $36,279.29 • 2025 (Year 20) — $37,367.67 There is no percentage rent, and the tenant has paid a security deposit of $25,000 to the landlord. The following are some key quotes from the City of Tacoma Legistar “Fourth Amendment to Agreement of Marina Lease:” “Maintenance. … Tenant, at its sole cost and expense, shall maintain, repair, operate, manage and replace the shore side and the Property, including without limitaCon the Marinas and Improvements, and any systems and uCliCes serving the same … Tenant’s maintenance, repair and replacement obligaCons under the Lease shall include without limitaCon making any and all capital improvements, repairs and replacements to the Property and shore side. Tenant shall provide Landlord with a construcCon schedule for any planned improvements, replacements or repairs cosCng more than $100,000.00 … Before Tenant engages in any maintenance, repair or replacement acCvity cosCng more than $100,000.00, Tenant shall provide Landlo rd with a construcCon b ond …” “Notwithstanding the foregoing, Tenant shall not be responsible for the capital replacement of the MulC-Use Float on 15th Street or the Human Powered Watercrab Float so long as the same are non-revenue generaCng; … the capital replacement of the guest docks in the Dock Street Marina … shall be made at Landlord and Tenant’s shared and equal expense according to a mutually acceptable schedule.” “OpVon to Extend. … Tenant shall have the opCon to extend the Term of the Lease for ten (10) successive periods of ﬁve (5) years … If Tenant validly exercises its opCon to extend … then from and aber January 1, 2026 … Tenant shall also pay to Landlord ‘Annual Rent’ in the amount of $60,000.00 per year in 2014 Dollars … adjusted annually … by the greater of (a) one and one-half percent (1.5%) and (b) the cumulaCve percentage increase in the annual growth in the CPI-U …” “Property Insurance. Tenant agrees t hat through out t he Term of the Lease … Ten ant ’s obligaCon to at all Cmes carry all risk pro perty, ﬁre and earthquake insurance pursuant to SecCon 11.03 of the IniCal Lease shall apply to all structures, buildings and improvements located upon the Property or shore side. Such insurance shall be maintained by Tenant at its sole cost and expense.” “… According to the lease agreement between Foss Waterway Authority Development (FWDA) as Landlord, and Foss Waterway Seaport as tenant for the Seaport Building, Ctle to any alteraCons to the building constructed by Seaport shall become the property of FWDA upon their installaCon, free and clear of all liens and encumbrances, without any obligaCon on the part of FWDA to pay therefor…” 850
Land Econ Group 14
14 Some key points from this lease are summarized as follows: • The lease rate is modest and provides predictable cash ﬂow forecasCng for the tenant but removes the upside from the landlord if the tenant’s ﬁnancial performance becomes excepConal. This is consistent with the mutual objecCve that the tenant is providing a community cultural and educaConal experience rather than operaCng a for-proﬁt commercial enterprise. • The tenant is responsible for maintenance, repairs and most capital improvements. However, the landlord retains authority to require capital items every ﬁve years. • Capital improvements made by the tenant become capital assets of the landlord. • The tenant has the right to extend for ten successive ﬁve-year terms, but the extensions are condiConed upon compliance with the capital investment schedule and non-default on lease payments. This provides the tenant with a long-term operaCng outlook and insures property maintenance and reinvestment for the landlord. • The tenant must carry property, all risk and other insurance at its own cost and provide indemnity protecCon for the landlord. The Tenant’s Operations and Staffing The Foss Waterfront Seaport traces its organizaConal origin to 1996, when it was founded as the Commencement Bay MariCme AssociaCon, a nonproﬁt created to develop a mariCme heritage museum and educaCon center on the Tacoma waterfront. It was able to secure a locaCon in the Balfour Dock Building, a warehouse originally built as part of the “rail to sails” era of the Tacoma waterfront. The Thea Foss Waterway underwent major remediaCon under the Federal Superfund program which cleaned up this industrial waterfront. The rehabilitaCon of the Balfour Dock Building was completed in 2012, and the Seaport museum and event center occupied the building shortly thereaber. The Seaport is now a substanCal organizaCon within the Tacoma community. According to their 2022 Form 990, the tax return for organizaCons exempt from income tax, this non-proﬁt had a 21 member board, 36 employees and approximately 50 volunteers. Their total revenue for 2022, the latest year we have been able to obtain, indicated revenue of $1.34 million and expenses of $1.16 million and an operaCng surplus of $176,800. The major revenue sources were $887,300 from grants and contribuCons and $390,400 from charges for services. The major expense line items were employee salaries and beneﬁts of $612,600 and other expenses of $552,300. Its key staﬀ include an execuCve director, an educaCon director, a development director and a venue manager . 851
Land Econ Group 15
15 Comparison of the Seaport Building to the Craneway Pavilion The Foss Waterfront Seaport building and the Craneway Pavilion are very similar in size and shape. Both are historic buildings that have substanCal glass curtainwalls that allow natural light penetraCon and long clear spans that facilitate mulCple use conﬁguraCons. Both buildings have waterfront locaCon, mariCme history and water access. The Seaport building is owned by the economic development authority of the City of Tacoma, and the Craneway Pavilion will be owned by the City of Richmond. The Foss Waterfront Seaport is an excellent example for the Craneway Pavilion; however, Richmond may not currently have a non-proﬁt organizaCon seeking such a space and has the ﬁnancial capacity to carry operaCng cost and pay rent. Fort Mason Center in San Francisco Fort Mason Center is located on the northern waterfront of San Francisco and is part of the Fort Mason Historic District, a NaConal Historic Landmark. Once an army base and point of embarkaCon for soldiers headed into the Paciﬁc theaters of war from the late 19th century through World War II, it is now owned by the NaConal Park Service which created the Golden Gate NaConal RecreaCon Area (GGNRA) that includes Fort Mason. 852
Land Econ Group 16
16 Figure 4: Fort Mason Center

853
Land Econ Group 17
17 The Fort Mason Center has a 13-acre campus that includes 12 venue opCons ranging in size from 500 to 50,000 square feet. The venues include: • The Gateway Pavilion is located on Pier 2 and is a building of 66,000 square feet. It houses conferences, trade shows, exhibiCons and gala events and has a capacity of 2,000 or 750 as a theater. This is the building most similar to the Craneway pavilion. • The FesCval Pavilion with capacity of 3,800 for trade shows, conferences, convenCons and fesCvals. • The Store House with capacity for 150 for banquets or recepCons and 112 for theater style seaCng. • The General’s Residence with capacity of 400 for weddings, ceremonies, parCes and art exhibits. • Gallery 308 that has capacity of 430 for parCes, weddings, art exhibits and conferences. • The Cowell Theater with capacity for 437 for concerts, ﬁlms, lectures and performances • The Firehouse with capacity for 110 for classes, meeCng, small parCes and weddings. The wide range of venues allows the Center great ﬂexibility in saCsfying user needs and the opportunity to house mulCple events simultaneously. Many of the buildings oﬀers views of the Golden Gate Bridge, the Marin Headlands and the Island of Alcatraz. Figure 5: The Gateway Pavilion

854
Land Econ Group 18
18 Long term tenants at Fort Mason Center includes nearly two dozen non-proﬁt and arts organizaCons, such as galleries, theater companies and art supply stores, restaurants, cafes, bars and the famous Greens Restaurant. Legal and Financial Structure The Fort Mason Center for Arts & Culture (FMCAC) is a 501(c)(3) non-proﬁt that that entered into a 60-year lease with GGNRA in 2006. The land and structures remain in public ownership (federal), and FMCAC operates the site under lease and in turn manages subleases and venue rentals. FMCAC’s mission is to “engage and connect people with arts and culture on a historic waterfront campus.” In recent years the center hosts approximately 1.2 million annual visitors. During 2024, the Center earned total revenue of $10.9 million and incurred expenses of $9.4 million with details shown in Figure 6 below: Figure 6: FMCAC Revenue and Expense Summary for 2024 Source: FMCAC 2024 Annual Financial Report The operaCng model integrates historic preservaCon (maintenance and infrastructure upgrades) with community beneﬁts (arts educaCon, event space and public access) and commercial services/uses (restaurants, coﬀee shops, galleries, oﬃces and shops) to provide revenue and on-site services. The substanCal earned income allows the Center to cover its operaCng cost and contribute rent to the public landlord. Public subsidy is limited to major renovaCon and repairs to the substructures. During 2024, the Center contributed $2.1 million in capital investment. To maintain and preserve Fort Mason Center as a NaConal Historic Landmark, a historic preservaCon fee of 10 percent of the room rental is assessed on all venue and room rentals. 855
Land Econ Group 19
19 Comparison of Fort Mason Center to the Craneway Pavilion Both the Fort Mason Center and the Craneway Pavilion enjoy scenic bayfront locaCon, although being at the Northern San Francisco Waterfront Fort Mason oﬀers superior views, access to a larger populaCon and a signiﬁcant tourist visitaCon potenCal. Fort Mason is a larger complex with many more venue opCons to cater to a wide range of client needs. The Gateway Pavilion on Pier 2 while longer than the Craneway is similar in shape and conﬁguraCon. While larger in scale, FMCAC’s operaCng model of public ownership, non-proﬁt operaCon, venue leasing and commercial tenants to augment revenue and provide on-site service is a potenCal model for the Craneway Pavilion. The Bridge Yard Building in Oakland The 24,000 square foot Bridge Yard Building, located at 210 Burma Road in Oakland, was formerly the Interurban Electric Railway Bridge Yard built in 1938 as the maintenance and repair facility for Key System streetcars that travel over the Bay Bridge. In 2012 Caltrans and the Bay Area Toll Aut hority (BATA) began a renovaCo n pro jec t to resto re th is single-story steel-frame structure which is eligible for lisCng on the NaConal Register of Historic Places. The restoraCon project has won several awards for preservaCon and outstanding engineering. The Bridge Yard Building is the anchor to a new shoreline park operated by the East Bay Regional Park District (EBRPD) and created with funding assistance from BATA. The park has been dedicated as the Judge John Sucer Regional Shoreline Park and is located at the eastern anchor to the Bay Bridge. Figure 7: The Bridge Yard at the Base of the Bay Bridge

856
Land Econ Group 20
20 Figure 8: Wedding Reception at the Bridge Yard
Legal Structure The Bridge Yard Building is property of Caltrans which has a long-term lease with the East Bay Regional Park District that manages the Judge John Sucer Shoreline Park. Oakland Venue Management (OVM), a private meeCng/venue management company serves as on-site manager and operator. OVM conducts markeCng, makes bookings and provides in-house services and event producCon. Unlike the previous two case studies, the Bridge Yard is managed and operated by a private for-proﬁt meeCng and venue management company. Because OVM is privately held, we have not been able to uncover any reliable ﬁnancial informaCon on its operaCons other than the fact its venue rental packages range widely from $7,500 to $65,000. OVM manages one other venue, the atrium space in Oakland’s Uptown StaCon, an oﬃce and retail building with a large atrium. 857
Land Econ Group 21
21 Comparison of Bridge Yard to Craneway Pavilion Both are historic industrial buildings with frontage on San Francisco Bay. At 24,000 square feet, the Bridge Yard is smaller with less than half the rentable space. While it is central to the Bay Area populaCon, the Bridge Yard is in an obscure locaCon neglected for decades. The building’s restoraCon surrounded by a new shoreline park foreshadow its growing success as an event venue. If the opportunity arises, OVM could bid for management and operaCons of the Craneway Pavilion. Pier 70 Building 12 on San Francisco Waterfront Pier 70 located at San Francisco’s eastern waterfront has been an important industrial and ship building site since the Gold Rush days of the mid 1800s. The importance of Pier 70 soared during World War II when it was acquired by Bethlehem Steel CorporaCon and transformed into one of the largest shipyards on the West Coast. Bethlehem produced a wide range of ships including naval war ships and the famous Liberty cargo ships essenCal to the Allied war resupply eﬀort. Aber World War II as demand for ships waned, Pier 70 slipped into neglect and decay. The Port of San Francisco acquired this property in 1980. By 2010 the Port acquiesced to the long-term economic trend along the San Francisco waterfront and approved a master plan to redevelop this pier for residenCal and commercial uses. The iniCally selected developers were Orton Development and Forest City. More recently, Brookﬁeld ProperCes gained the development rights to Pier 70 and started planning the 28-acre waterfront parcel to include approximately 2,000 residenCal units, 1.0 to 1.75 million square feet of oﬃce and lab space, 90,000 square feet of arts and non-proﬁt space, 115,000 square feet of retail and neighborhood ameniCes, 60,000 square feet of small manufacturing space and a waterfront park. Central to this development is Building 12, a 230,000 square feet steel frame historic building. This building is being re-envisioned as a vibrant community gathering and event space that is integrally connected to the historic nature of the overall site. While the detailed uses are sCll being sorted, this building is envisioned as some combinaCon of manufacturing, retail, recreaCon and event space for public and private events. It will funcCon as the “living room and center piece” of the larger development. In order to retain its historic character and address future sea level raise, Brookﬁeld incurred considerable expense to raise the enCre building. Jacks were placed under each of its 30 steel columns, and the enCre building was raised by nine feet. Legal Structure and Financial Framework The Port of San Francisco retains ownership of the land to maintain strategic oversite of the development. Brookﬁeld, a private developer, serves as the master developer through a development disposiCon agreement (DDA). It makes the redevelopment investments, is able to subcontract 858
Land Econ Group 22
22 other developers, and manages detailed planning, design, construcCon, markeCng, leasing and operaCons. Being the centerpiece and a community amenity, a successful Build 12 enhances the value of surrounding properCes. Its value is far greater than its operaCng statement. Parallels with the Craneway Pavilion Like Building 12, an acCve and vital Craneway Pavilion as a cultural space and event center enhances the value of surrounding properCes. Given its architectural elegance, historic interest, waterfront seong and bay views, a successful Craneway will add value to Madison Capital’s other Fort Point properCes. Likewise, its success will enhance the value and future development potenCal to the southern porCon of Terminal 3 which is owned by the City of Richmond through its Port District but leased to the ferry operator San Francisco Bay Area Emergency TransportaCon Authority (WETA). WETA has the ferry parking lot property under lease control unCl 2047. The success of the Craneway Pavilion can be viewed from two overlapping perspecCves. To the lessee or management or operaCng company, it needs to cover expenditures including staﬀ salaries to sustain operaCon. To Madison Capital, the City of Richmond and WETA, its success will be deﬁned by the level of community interest and vitality it generates making it the waterfront living room for this part of Richmond. Such success will create addiConal ferry patronage, enhance surrounding real estate values and build Richmond’s reputaCon as a desirable community to live, work and play. Alterna&ves for Opera&ng the Craneway Pavilion Richmond has three alternaCves for operaCng the Craneway: 1) Lease to a non-proﬁt enCty, 2) Contract with a commercial operator, and 3) Create a City department or bureau for self-operaCon. Learning from the case studies presented above and others, the advantages and disadvantages of each approach are summarized below. It is reasonably common for ciCes or its aﬃliated organizaCons to hold Ctle to historic industrial buildings for public use as a museum, theater, wedding venue and community event center. Due to the staﬃng and experCse required, the public agency owner typically leases the building to a non-proﬁt operator, oben a museum, or retain a private for proﬁt venue management ﬁrm to operate the building. The public agency owner could appoint members to the board of directors of the non-proﬁt. Advantages of a Non-profit Operator/Lessee • Public Mission Alignment – Non-proﬁts can becer operate the building as a community asset that aligns well with the City’s mission for the Craneway. • Funding Advantages – Non-proﬁts can secure grants, tax-deducCble donaCons and volunteer personnel resources. 859
Land Econ Group 23
23 • Community Trust and Access – Non-proﬁts are more likely to enjoy community trust and goodwill and be more recepCve to community programs, free events and equitable pricing. • Historic Integrity – Non-proﬁts are more likely to have a strong commitment to the preservaCon ethos and face less pressure for commercial compromises. Disadvantages of a Non-profit Operator/Lessee • Limited Profession ExperVse – Smaller non-proﬁts may lack staﬀ experCse to manage and operate the Craneway eﬃciently. • Lack Financial Depth – Reliance on grants and donaCons makes longer term ﬁnancial planning and investment diﬃcult. • Lack Reserve for Maintenance – Without strong ﬁnancial reserves, maintenance to true historic standards may be compromised. • Agency Oversight – A small and ﬁnancially shallow non-proﬁt may require more City guidance, oversight and possibly even ﬁnancial assistance. In two of the case studies, a non-proﬁt operator was either available or was speciﬁcally created to be the operator. In Richmond, such an operator may not be available, and the retenCon of a commercial operator is a viable opCon. Advantages of a For Profit Operator/Lessee • Experience and Eﬃciency – A for-proﬁt operator may be able to bring a depth of experience, operaConal experCse, event markeCng contacts and hospitality management systems. • Financial Stability – A commercial operator may be in posiCon to make longer term investment decision if the lease terms permit. • Reduced Agency Burden – With a well structured management contract or lease agreement, an experienced for-proﬁt operator is more likely to minimize City oversight burden. • Impact on Surrounding ProperVes – A for-proﬁt enterprise that has surrounding property interests may view the Craneway, at least in part, as an amenity for the surrounding real estate rather than simply as its own operaCng enCty resulCng in a greater willingness to invest in its success. 860
Land Econ Group 24
24 Disadvantages of a For Profit Operator/Lessee • Mission Conﬂict – There will be constant tension between serving the public interest versus the catering to the ﬁnancial interests of the organizaCon and/or its investors. This could result in higher event prices and/or restricCon on days of public access resulCng in public backlash. Much of this mission conﬂict can be contained with a well wricen management contract or lease. • PreservaVon Risks – Maintenance or reinvestment decision may favor cost eﬃciency over historic authenCcity. • Public Trust – The public is likely to have more trust in a non-proﬁt organizaCon as compared to a for-proﬁt commercial enterprise. In some cases, the City may wish to retain direct operaCng control to ensure its objecCves for the historic building are fully saCsﬁed. This approach has advantages and disadvantages as well. Advantages of City Operation • Direct Control – Either the City Council or its appointed staﬀ or board would have direct control to align the mission of the historic building with its designated public purpose. • Accountability – All signiﬁcant ﬁnancial decisions would fall under public oversight and be consistent with public records obligaCons. • CoordinaVon with Other City Services – There may be coordinaCon with other City services that allows for some eﬃciency, such as maintenance and public works. Disadvantages of City Operation • Higher OperaVng Cost – City labor rules and requirements such as civil service structure, living wage mandates and other rules can signiﬁcantly increase salary cost. • Limited ExperVse in Event Management – Most ciCes lack specialized experience in event management, markeCng and sales and have challenges acracCng and retaining such personnel. • Slow and Cumbersome Decision Making – Some booking opportuniCes will require quick decisions which a public body is not structured to make as Council approvals are typically Cme consuming and slows operaCng agility essenCal for ﬁnancial performance. • PoliVcal Exposure – Controversial bookings, ﬁnancial shorxalls, poor customer saCsfacCon are all public issues that fall back on staﬀ and Council. 861
Land Econ Group 25
25 Building Operating Cost The case studies demonstrate that once established, a well-organized lessee or venue operator is able to relieve the public enCty of the building operaCng and maintenance cost. In the Fort Mason case there was even suﬃcient operaCng surplus to pay some rent and subsidize non-proﬁt and commercial tenants that support the mission of the complex. However, in the case of the Craneway which is restarCng event center operaCon, a ramp up period of likely 18 months is required before it is able to carry building operaCng cost. That cost is esCmated at $269,000 for 2025 (Table 1). However, if the dock is removed as expected, the 2026 cost will be in the vicinity of $250,000 as marine insurance will no longer be required. The uCliCes cost will of course vary with usage. Table 1: Estimated Craneway Building Operating Cost for 2025 Impact on Surrounding Properties Because of its strategic locaCon on the bay front with views and adjacency to the ferry terminal augmented by its historic architectural character, the success of Craneway Pavilion as a community event and cultural center will add acCvity and enhance the value of surrounding real estate. The restaurant in the space formerly occupied by Assemble, a once popular regional desCnaCon, would be much more viable because of its ability to service acendees and provide catering services. A successful Craneway would also have an elevaCng inﬂuence on rents at the balance of Fort Point and the value of the City’s property at Terminal 3. Complemented by surrounding new uses, the Craneway Pavilion could serve as a new “living room” for Richmond.

Annual Monthly CranewayCraneway Aux
Total Total 40,000 SF 3,412 SF
Common Area Charges $53,755.92 $4,479.66 $1,795.15 $2,684.51 Insurance $24,932.64 $2,077.72 $1,908.60 $169.12
Marine Insurance $23,605.92 $1,967.16 $1,967.16
Property Tax $22,900.20 $1,908.35 $1,908.35
PG&E Electrical and Gas $144,000.00 $12,000.00 $11,000.00 $1,000.00 Total $269,194.68 $22,432.89 $18,579.26 $3,853.63
Total Without Marine Insurance$245,588.76 $20,465.73 $16,612.10 $3,853.63 Source: City of Richmond
862
Land Econ Group 26
26 V. A LONGER-TERM STRATEGY FOR A NEW RICHMOND LIVING ROOM The longer-term strategy for this part of Richmond calls for a hotel development on Terminal 3 to complement the Craneway Pavilion event center and the ferry terminal. Such a strategy has advantages for all interested parCes including the City of Richmond, WETA the ferry operator, the hotel developer, operator of the Craneway and the property interests at Ford Point. An illustraCve site plan of this strategy is presented in Figure 9 below. Figure 9: Hotel Development Concept Site Plan at the Ferry Terminal

863
Land Econ Group 27
27 This concept proposes a 150-room hotel located at the southern Cp of Terminal 3 with a parking structure immediately to the north. The parking structure is proposed to be three levels accommodaCng approximately 350 parking stalls designed to replace and expand the parking needs for the ferry service, accommodate the hotel’s guest parking and oﬀer some peak event parking for the Craneway Pavilion. Given that the hotel parking demand will be late abernoons and evenings and the ferry parking demand will be primarily during the workday, the potenCal for shared parking reduces combined individual parking requirements by perhaps 20 or 25 percent. The strategy is for the City to build a three-level public garage of approximately 350 stalls at an average per stall cost of $40,000, a reasonable cost considering that approximately one-third of the stalls would be at ground level and only two-thirds of the stalls would in an above ground structure, the total cost would be esCmated at $14 million. Using a bond rate of 4.5 percent, the annual debt serve cost would be in the vicinity of $860,000. The 150-room hotel at a development cost of $375,000 per room translates into a hotel value of $56.3 million. The supportable land cost would be approximately 30 percent or $16.9 million. Using a typical land lease rate of seven percent for the annual payment, the hotel would be paying $1.18 million per year to the City for the site, usage of the garage and proximity to the Craneway event center. The land rent exceeds the annual garage bond amorCzaCon cost of $860,000 by approximately $320,000. The City could share a porCon of this net revenue with WETA to encourage a revised lease to facilitate a hotel development that serves mutual interests. Advantages for WETA WETA, the ferry service provider, has three ten-year lease opCons on this property currently used for surface parking as long as they are providing ferry service. WETA, therefore, has eﬀecCve lease control of this parking lot property unCl 2047. Since the original lease was executed in 2017, the ﬁrst opCon for renew comes up in 2027. WETA could derive the following beneﬁts by renegoCaCng this lease with the City or Richmond to facilitate a new hotel that would complement the ferry terminal and the Craneway event center: • A hotel at this locaCon adjacent to an event and conference center at the Craneway Pavilion would increase ferry patronage especially in the counter-commute direcCon when the boats are returning largely empty. San Francisco organizaCons could come to the Craneway by ferry for private oﬀsite meeCngs and team building sessions. • With an ample parking structure, WETA would not lose but rather gain addiConal ferry parking. • The land economics of this hotel development indicates that the hotel land lease payments to the City would more than cover the bond amorCzaCon cost of the parking garage. As addiConal incenCve for WETA to parCcipate in this strategy, the City of Richmond could oﬀer to share the land lease surplus with WETA. 864
Land Econ Group 28
28 Advantages for the Craneway Event Center Operator • Having a hotel adjacent to the Craneway would likely increase the events booking by 20 or 30 percent for conferences, markeCng presentaCons, cultural events, family reunions and weddings. This addiConal usage demand improves the ﬁnancial sustainability of the Craneway as public event and cultural center and enhances the operator’s ability to pay some rent to the City. • Having the Craneway Pavilion, the ferry terminal, a new restaurant at the former Assemble site and a new hotel greatly strengthens this locaCon as a desCnaCon and makes markeCng the Craneway easier . Family and friends coming from out of town for a wedding at the Craneway will have a logical headquarters hotel. Advantages for the Hotel Developer and Operator • With a long-term land lease, likely 60 years or more, this hotel will be able to control a bayfront site with ferry service and access to a meeCng facility without addiConal capital cost. This is likely a unique opportunity on the San Francisco waterfront. • In addiCon to access to the Craneway Pavilion, the hotel will also have access to a public parking structure designed to accommodate hotel guests and employees without addiConal capital investment. • The hotel will be able to market conferences to San Francisco organizaCons that wish to have their events oﬀsite in a secure and private locaCon yet is within a 35-minute ferry ride. To reinforce company team building goals, all acendees can come by ferry. Advantages for the City of Richmond By building a public parking structure that provides both the ferry service and the hotel with ample parking, the City may be able to acract a hotel to strengthen the Craneway as an event center and increase ferry patronage. This not only increases the parCcipaCon rent that the City is likely to receive from Craneway operaCons but also generates transient occupancy tax (TOT) revenue for the general fund. For example, a 150-room hotel with an average room rate of $250 and 72 percent occupancy would generate approximately one million per year in TOT . More importantly, the City would create a new waterfront “living room” for Richmond to host locals and visitors along the hotel and Craneway Pavilion. Outlook for Hotel Development The compeCCve market area for this Richmond ferry terminal hotel is an arc across the northeast part of San Francisco Bay extending from Tiburon through Richmond and down along the East Bay waterfront through Albany, Berkeley to Emeryville. As shown in Table 2, this market area currently has eight hotels of signiﬁcant size with 1,532 room. This market area was hit hard by the Covid pandemic and is sCll recovering. 865
Land Econ Group 29
29 The average room rate was at $196 in 2019 but dropped to $147 by 2021 and has climbed back to $174 by 2025. The occupancy rate and sales price per room moved in correlaCon. Because of the slow market recovery, the last new hotel to be constructed in this market area was the 175-room Hyac Place built in Emeryville in 2016. Table 2: Hotel Market Trend in the Northeast Bay In order to esCmate how this new ferry terminal hotel would perform, we selected ﬁve market area hotels that would likely be the most direct compeCtors (Table 3). These ﬁve hotels total over 1,000 rooms; however, the lack of new construcCon over the last decade suggests an aging compeCCve inventory providing an opportunity for a new entrant when the market recovers.

Period
Inventory
Rooms
Existing
Buildings
Avg Rooms
Per Building12 Mo Revenue
12 Mo
Occupancy12 Mo ADROccupancy
Market Sale
Price/Room
Market Cap
Rate
Sep 2025 1,532 8 192 $70,377,537 69.0% $173.65 77.5% $205,862.00 8.8% Sep 2024 1,532 8 192 $68,704,553 68.0% $172.01 70.4% $199,705.00 8.5% Sep 2023 1,532 8 192 $73,225,853 69.5% $179.55 74.1% $179,494.00 8.2% Sep 2022 1,532 8 192 $70,212,704 66.5% $179.82 75.7% $190,987.00 7.4% Sep 2021 1,530 8 191 $42,760,269 50.2% $147.16 58.6% $220,400.00 6.7% Sep 2020 1,504 8 188 $52,799,357 52.6% $175.49 43.5% $262,932.00 6.8% Sep 2019 1,504 8 188 $96,868,211 85.8% $195.96 90.8% $298,743.00 6.6% Sep 2018 1,504 8 188 $96,445,289 86.2% $194.02 90.8% $289,508.00 6.5% Sep 2017 1,504 8 188 $90,262,359 84.1% $188.00 84.4% $265,133.00 6.7% Sep 2016 1,329 7 190 $84,265,839 86.4% $191.57 88.0% $226,960.00 7.0% Sep 2015 1,328 7 190 $76,646,607 85.3% $176.50 89.3% $183,086.00 7.4% Source: CoStar 11.7.2025
866
Land Econ Group 30
30 Table 3: Competitive Hotels in the Market Area
A closer look at the operaCng characterisCcs of these ﬁve hotels combined indicate the following: • The occupancy rate for the year to date as of September 2025 was 74.1 percent and moving upward. • The average year to date daily room rate was $182.87 and moving upward. • The average room rate for September 2025 was $199.12 and moving upward. The local hotel market indicates conCnued recovery, and the regional picture is even more posiCve as major investment ﬁrms are purchasing premium properCes at discount prices. For example, Blackstone Real Estate recently acquired the Four Seasons Hotel in the heart of Downtown San Francisco showing conﬁdence in visitor market resurgence. The San Francisco Bay Area is in the mid stage of a hotel market recovery powered in part by the return to oﬃce movement and the explosive growth of AI ﬁrms. The City of Richmond lacks a desCnaCon hotel, and the northeast bay waterfront has experienced no new hotel development since 2016. The current Cming is ideal for the planning of a new desCnaCon waterfront hotel at the Richmond ferry terminal for construcCon in the 2027 to 2029 Cmeframe. The reacCvaCon of the Craneway Pavilion as an event center with the reopening of the former Assemble restaurant plus public investment in a parking structure make hotel development at the Richmond ferry terminal a very acracCve opportunity.

Year OpenedLand MeetingParkingParking
Name Address City RenovatedAreaRoomsSpace in SFStalls Ratio Hyatt Place 5700 Bay StreetEmeryville 2016 1.29 175 1,440 32 0.18 DoubleTree by Hilton200 Marina BlvdBerkeley 1972/2019 NA 378 20,619 434 1.15 Four Points by Sheraton1603 Powell StreetEmeryville 1985 1.58 153 1,300 200 1.31 Hyatt House 5800 ShellmoundEmeryville2000/20152.39 234 1,600 143 0.61 The Lodge at Tiburon1651 Tiburon BlvdTiburon 1977/20132.31 104 4,008 272 2.62 Average 1.51 209 5,793 216 1.17 Source: CoStar 11.7.2025
867
868
869
870
871
872
873
874
875
876
877
878
879

DISPOSITION AND DEVELOPMENT AGREEMENT
by and between
THE REDEVELOPMENT AGENCY OF THE CITY OF RlCHMOND
and
ORTON DEVELOPMENT, INC.

ASSEMBLY BUJLDING
733\171172718.6 880

TABLE OF CONTENTS
ARTICLE 1. PARTJES, FACTS AND DEFJNITIONS .................................................................. 2

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

1.2 Exhibits ..................................................................................................................... 9 ARTICLE2.

2.1 2.2

2.3 2.4

2.5 2.6

2.7 2.8

2.9 2.10

2.11 2.12

2.13 2.14

2.15 2.16

2.17 2.18

2.19 2.20

2.21 2.22
ARTICLE3.

3.1 3.2

3.3 3.4

3.5 ARTICLE4.

4.1 4.2

4.3 4.4
733\17\172718.6
DEVELOPER PRE-DISPOSITION REQUIREMENTS ...................................... 9 Conditions Precedent ................................................................................................ 9 CEOAINEP A Documentation ................................................................................ 1 0 Refit Work ............................................................................................................... 10 Preliminary Site Plan .............................................................................................. 1 0 Developer Deposit .................................................................................................. 11 Site Investigation Reports ....................................................................................... 11 Design Development Documents ........................................................................... 12 Land Use Approvals ............................................................................................... 13 Final Construction Plans ......................................................................................... 13 Financing Plan ......................................................................................................... 14 Building Pennit ....................................................................................................... l6 Evidence of Availability of Funds .......................................................................... 16 Construction Contract. ............................................................................................ 16 Performance and Payment Bond(s) ........................................................................ 17 Insurance ................................................................................................................. 17 User Commitments ................................................................................................. 18 Agency Note and Agency Deed ofTrust. ............................................................... l8 Section 108 Loan Note and Section 108 Loan Deed of Trust.. ............................. 18 National Park Service Lease ................................................................................... 18 Ferrv Terminal Public Access Easement. ............................................................... 18 Certificate of Readiness and Completion Guarantee ............................................. 18 Cooperation in Securing HUD Funds .................................................................... 19 AGENCY PRE-DISPOSITION ACTIONS ........................................................ 19 Conditions Precedent .............................................................................................. 19 CEQAINEP A Review ............................................................................................. l9 Tidelands Exchange Agreement.. ........................................................................... 19 Use ofHUD Funds ................................................................................................. 19 Craneway Lease .......................... ~ .......................................................................... 19 DISPOSITION OF PROPERTY ......................................................................... 20 Sale and Purchase/Lease ......................................................................................... 20 Opening Escrow ...................................................................................................... 20 Close of Escrow ...................................................................................................... 20 Condition ofTitle .................................................................................................... 21 I 881

4.5 Physical Condition of Property and Craneway ....................................................... 21

4.6 Costs of Escrow and Closing .................................................................................. 22

4.7 Real Estate Coinmissions ....................................................................................... 22

4.8 Prior Developer Plans ............................................................................................. 22 ARTICLE 5. SECTION 108 LOAN AND BEDI GRANT ........................................................... 22

5.1 HUD Section 108 Loan andBEDI Grant Documents ........................................... 22

5.2 Section 108 Loan .................................................................................................... 22

5.3 Section 108 Loan Definitions ................................................................................. 23

5.4 Interest. .................................................................................................................... 23

5.5 Use of Section 108 LoanFunds .............................................................................. 24

5.6 Section 108 Loan Deed ofTrust.. ..... , ..................................................................... 24

5.7 Conditions Precedent to Disbursement of Section 108 Loan ................................ 24

5.8 Interest Reserve ....................................................................................................... 25

5.9 Repayment of Section 108 Loan ............................................................................. 26

5.10 PaymentofLoanFees ............................................................................................. 26

5.11 BEDI Grant.. ........................................................................................................... 26

5.12 Use ofBEDI Grant Funds ....................................................................................... 26

5.13 Conditions Precedent to Disbursement of BED I Grant. ........................................ 27

5.14 Applicable Federal Requirements .......................................................................... 27 ARTICLE6.

6.1 6.2

6.3 6.4

6.5 6.6

6.7 6.8

6.9 6.10

6.11 6.12
ARTICLE 7.

7.1 7.2

7.3 7.4

7.5 7.6

7.7 733\17\172718.6
CONSTRUCTION OF THE PROJECT ............................................................. 28 Construction Pursuant to Plans ............................................................................... 28 Material Change in Final Construction Plans ........................................................ 28 Commencement ofConstruction ............................................................................ 28 Completion of the Project ....................................................................................... 28 Progress Reports ..................................................................................................... 28 Off-Site Improvements ........................................................................................... 28 Entry by the Agency ................................................................................................ 28 Egual Opportunity ................................................................................................... 29 Prevailing Wages .................................................................................................... 29 Compliance with Applicable Law .......................................................................... 30 Certificates of Completion ...................................................................................... 30 First Source Agreement. ......................................................................................... 30 ON-GOING REQUIREMENTS ........................................................................ .31 Applicability ............................................................................................................ 31 Use and Maintenance .............................................................................................. 31 Mandatory Language in All Subseguent Deeds, Leases and Contracts ................. 31 Hazardous Materials ............................................................................................... 3 2 Taxes and Assessments ........................................................................................... 33 Changes ................................................................................................................... 33 Mitigation Measures ............................................................................................... 33 11 882

7.8 Sales and Use Tax Allocations ............................................................................... 33

7.9 SLC Approved Uses for Craneway ........................................................................ 34

7.10 Visitor Center Lease ................................................................................................ 34

7.11 Leases ...................................................................................................................... 34

7.12 Entry by FEMA ....................................................................................................... 35

7.13 North Parking Area Planning Process .................................................................... 35

7.14 Cooperation on Ferrv Service ................................................................................ 35 ARTICLE 8. AGENCY PARTICIPATION .................................................................................. 35

8.1 Agency Participation ............................................................................................... 35

8.2 Payment of Project Cash Flow Participation to the Agency .................................. 36

8.3 Books and Records ................................................................................................. 36

8.4 Agency Audits ......................................................................................................... 37

8.5 Agency Note and Agency Deed ofTrust.. .............................................................. 37

8.6 Approval of Financing ............................................................................................ 38 ARTICLE 9. CHANGES INDEVELOPER .................................................................................. .38

9.1 Changes Only Pursuant to this Agreement. ............................................................ 3 8

9.2 Prohibition Against Transfer ofPropertv and Craneway and Assignment of Agreement ............................................................................................................... 3 8

9.3 Prohibition on Transfer of Ownership Interests ..................................................... 39

9.4 Permitted Transfers ................................................................................................. 39 ARTICLE 10. SECURITY FINANCING AND RIGHTS OF HOLDERS .................................... .41

10.1 No Encumbrances Except for Development Prnposes Prior to Completion. ........ 41

10.2 Holder Not Obligated to Construct.. ....................................................................... 41

10.3 Notice of Default and Right to Cure ...................................................................... .41

10.4 Failure of Holder to Complete Project .................................................................. .42

10.5 Right of Agency to Cure ......................................................................................... 42

10.6 Right of Agency to Satisfy Other Liens .................................................................. 42

10.7 Holder to be Notified ............................................................................................. .42

10.8 Modifications .......................................................................................................... 43 ARTICLE 11. GENERAL REMEDIES DURING DEVELOPMENT .......................................... .43

11.1 Application of Remedies ....................................................................................... .43

11.2 No Fault of Parties ................................................................................................. .43

11.3 Fault of Agency ....................................................................................................... 44

11.4 FaultofDeveloper .................................................................................................. 44

11.5 Right ofReverter .................................................................................................... .46

11.6 Option to Repurchase, Reenter and Repossess ..................................................... .48

11.7 Plans, Data and Aoprovals ..................................................................................... .48

11.8 Acceleration of Agency Note: Section 108 Note .................................................. .49 733\17\172718.6 111 883

11.9 Survival ................................................................................................................... 49

11.10 Rights and Remedies Cumulative .......................................................................... 49 ARTICLE 12. GENERAL PROVISIONS ..................................................................................... .49

12.1 12.2

12.3 12.4

12.5 12.6

12.7 12.8

12.9 12.10

12.11 12.12

12.13 12.14

12.15 12.16

12.17 12.18

12.19 12.20

12.21 12.22

12.23 12.24
Exhibit A
ExhibitB
Exhibit C
ExhibitD
Exhibit E
ExhibitF
Exhibit G
ExhibitH
Exhibit I
Exhibit J
733\17\172718.6
Notice, Demands and Communication ................................................................... 49 Conflict ofinterests ................................................................................................. 50 Non-Liability of Officials, Employees and Agents ................................................ 50 Enforced Delay ........................................................................................................ 50 Inspection of Books and Records ........................................................................... 50 Provision Not Merged with Deeds ......................................................................... 51 Title of Parts and Sections ...................................................................................... 51 Indemnity ................................................................................................................ 51 Insurance ................................................................................................................. 51 Applicable Law ....................................................................................................... 51 Severability .............................................................................................................. 51 Legal Actions .......................................................................................................... 51 Binding Upon Successors; Covenants to Run With Land ..................................... 52 Discretion Retained by City .................................................................................... 52 Recordation of Memorandum of Agreement ......................................................... 52 Parties Not Co-Venturers ........................................................................................ 52 Employment Opportunity ................... , ................................................................... 52 Warranties .. , ............................................................................................................ 53 Action by the Agency or Developer ....................................................................... 53 City As Third-Party Beneficiary ............................................................................. 53 Counterparts ................................................................................ , ........................... 53 Amendments ............................................. , ............................................................. 53 Identity and Authority of Developer. ...................................................................... 53 Entire Understanding of the Parties ........................................................................ 54 Site Map
Legal Descriptions of the Property and the Craneway
Form of Grant Deed
Scope of Development
Schedule of Performance
Preliminary Site Plan
Insurance Requirements
Site Investigation Reports
Permitted Exceptions
First Source Agreement
IV 884

DISPOSITION AND DEVELOPMENT AGREEMENT
THIS DISPOSITION AND DEVELOPMENT AGREEMENT (the "Agreement") is made on or as of November 18, 2003 by and between the Redevelopment Agency of the City of Richmond, a public body corporate and politic (the "Agency") and Orton Development, Inc., a California corporation (the "Developer").

RECITALS
A. Pursuant to authority granted under California law, the Agency has the responsibility to implement the Redevelopment Plan for Project Area 11-A (Harbour) adopted by Ordinance No. 10-75 N.S. of the City Council ofthe City of Richmond on June 9, 1975, as amended (the "Redevelopment Plan"), incorporated into this Agreement by reference.

B. The Redevelopment Plan affects and controls the development and use of all real property located within that area in the City ofRichmond, Contra Costa County, California, more particularly described and set forth in the Redevelopment Plan (the "Project Area").

C. The Agency is the owner of a parcel of real property within the Project Area consisting of approximately 26 acres and commonly known as 1414-1422 Harbour Way South (the "Site") as illustrated on the Site Map attached as Exhibit A. The Site is comprised of the following: (i) the Ford Assembly Building, an approximately 517,000 square foot historic landmark structure (the "Building") (ii) a parking area located to the north of the Building (the "North Parking Area"); (iii) an adjacent approximately 7,000 square foot brick structure known as the Oill1ouse (the "Oilliouse"); (iv) an adjacent pier structure known as the Craneway (the "Craneway"); and (v) approximately 1. 7 acres of submerged land (the "Water Area").

D. Pursuant to tlris Agreement, the Agency intends to convey to the Developer the Building and surrounding area, the Oilliouse, the North Parking Area and the Water Area (collectively the "Property") as more particularly shown and described in the attached Exhibit B.

E. The Craneway is encumbered by the public trust for commerce, navigation and fisheries (the "Trust"). The Agency and the City have entered into a Title Settlement and Exchange Agreement (the "Exchange Agreement") with the State Lands Commission (the "SLC"). The Exchange Agreement establishes the Trust requirements to which the Craneway is subject. The City shall lease the Craneway to the Developer subject to the SLC requirements imposed by the Exchange Agreement
F. In response to the Agency's Request For Proposals dated July 7, 2003, the Developer submitted a proposal to acquire and develop the Property and Craneway (the "Proposal"). Pursuant to the Proposal the Developer proposes to rehabilitate the Building and develop the Property and as a mixed use development including live/work lofts, commercial /office space, and public-serving uses, together with related facilities as more fully described in tlris Agreement, and to develop the Craneway with public-serving uses consistent with SLC trust 7331171172718.6 Page 1 885
restrictions (the "Project"). Developer's development of the North Parking Area portion ofthe Property shall be subject to further community and City council planning processes.

G. The Agency has found that the development of the Property and the Craneway pursuant to this Agreement is consistent with the General Plan of the City of Richmond, the applicable zoning requirements of the City of Richmond, and the Redevelopment Plan.

H. The purpose of this Agreement is to provide a mechanism whereby the Developer shall acquire, own, and redevelop the Property and lease and redevelop the Craneway, all as more pmticularly set forth below. It is for this reason that the conditions for development on the Property and the Craneway have been set forth in this Agreement.

I. The Developer has represented that it possesses the necessary expertise, skill and ability to carry ont the commitments contained in this Agreement and that tllis Agreement is in the best interests and will materially contribute to the implementation of the Redevelopment Plan.

J. As set forth in Section 3.2 of this Agreement, the Agency has not approved, nor will it approve, the Project until all required environmental reviews under the California Environmental Quality Act and the National Environmental Policy Act have been completed.

K. The Agency has prepared the report required by, and has conducted a joint public hearing with the City Council of the City of Richmond, pursuant to Califonlia Health and Safety Code Section 33433 with respect to the sale of the Property to the Developer for redevelopment.

The City Council has made the findings required pursuant to California Health and Safety Code Section 33433 with respect to such sale.

L. The redevelopment of the Property pursuant to this Agreement will serve Redevelopment Plan goals and objectives by alleviating the existing blight on the Property and within the Project Area and is consistent with the Agency's Implementation Plan.

THEREFORE, the Agency and the Developer agree as follows:

AGREEMENT
ARTICLE 1. PARTIES, FACTS AND DEFINITIONS

1.1 Definitions: The following terms shall have the following meanings in the Agreement:
(a) "Agency" means the Redevelopment Agency of the City of Richmond, which is a public body, corporate and politic, exercising governmental powers and organized and existing pursuant to the Califonlia Community Redevelopment law (Health and Safety Code Section 33000 et@.). The principal office of the Agency is 1401 Marina Way South, Richmond, CA 94804. "Agency" as used in this Agreement includes the Redevelopment Agency of the City of Richmond and any assignees of or successors to its rights, powers and responsibilities. 733\17\172718.6 Page2 886
(b) "Agency Deed of Trust" shall mean the deed of trust recorded in third lien position on the Property at the Closing to secure the Agency Note and the Developer's obligation to make participation payments to the Agency pursuant to Article 8, in a form to be provided by the Agency.
(c) "Agency Note" shall mean the promissory note payable to the Agency to be executed and delivered by the Developer to the Agency evidencing the Developer's obligation to make participation payments to the Agency as set forth in Article 8, in a form to be provided by the Agency.
(d) "Agreement" means this Disposition and Development Agreement, including the attached Exhibits and all subsequent amendments to the Agreement. (e) "Approved Security Interest" means a mortgage, deed of trust, or other reasonable method of security encumbering the Property that (i) meets the requirements of this Agreement, and (ii) secures any loan and/or refinancing approved by the Agency in connection with the approval of the Financing Plan.
(f) "Bankruptcy/Insolvency Event" means any of the following:
(1) Insolvency. A court having jurisdiction shall have made or entered any decree or order (i) adjudging the Developer to be bankrupt or insolvent, (ii) approving as properly filed a petition seeking reorganization of the Developer or seeking any arrangement for the entity in question under the bankruptcy law or any other applicable debtor's relief law or statute of the United States or any state or other jurisdiction, (iii) appointing a receiver, trustee, liquidator, or assignee of the Developer in bankruptcy or insolvency or for any of its properties, or (iv) directing the winding up or liquidation of the Developer, if any such decree or order described in clause (i) to (iv), inclusive, shall have continued unstayed or undischarged for a period of ninety (90) days unless a lesser time period will apply nnder this subsection; or the Developer shall have admitted in writing its inability to pay its debts as they fall due or shall have volnntarily submitted to or filed a petition seeking any decree or order of the nature described in clauses (i) to (iv), inclusive. (2) Assignment; Attachment. The Developer shall have assigned its assets for the benefit of its creditors or suffered a sequestration or attachment of or execution on any substantial part of its property, unless the property so assigned, sequestered, attached or executed upon shall have been returned or released within ninety (90) days after such event or prior to sooner sale pursuant to such sequestration, attachment or execution. (3) Suspension; Termination: The Developer shall have volnntarily suspended its business or fails to maintain its good standing. (g) "BCDC" means the San Francisco Bay Conservation and Development Commission.
733\17\172718.6 Page3 887
(h) "BEDI Grant" means the Brownsfield Economic Development Initiative grant from the Agency to the Developer in the amount of One Million Five Hundred Thousand Dollars ($1,500,000).
(i) "Building" means the approximately 517,000 square foot historic landmark structure known as the Ford Assembly building, a portion of the Property located on the Site as shown on the Site Map.

G) "Building Permit" means all building permits for the Project required to be obtained from the City or other governmental entities. (k) "CEQA" means the California Environmental Quality Act, Sections 21000 et seq. of the Public Resources Code and the CEQA Guidelines set forth at 14 California Code of Regulations Sections 15000 et seq.
(1) "Certificate of Completion" means the certificate issued by the Agency to the Developer after completion of the Project in accordance with the provisions set forth in Section 6.11 of this Agreement.
(m) "City" means the City of Richmond, a charter city.
(n) "Closing" means the date on which the Property and the Craneway is conveyed to the Developer pursuant to Article 4.
( o) "Construction Contracts" means, collectively, all the contracts between the Developer and any general contractor(s) covering the construction of the Project. (p) "Craneway" means the portion of the Site constructed on pilings at the waterfront of the Building as shown on the Site Map, to be leased to the Developer by the City subject to SLC requirements.
( q) "Deposit" means the amount to be advanced by the Developer to the Agency pursuant to Section 2.5.
(r) "Design Development Documents" means the documentary expression of the preliminary design concepts for the Project which shall include both (1) preliminary site plan and elevations, and (2) a detailed narrative. The Design Development Documents shall address the footprint and general location on the Property and the Craneway ofthe Project, the number of buildings and the height, size, bulk and number of stories or building, the interior layout, the mix of proposed uses by square footage on each floor, the style and quality of architectural treatment, the materials used on the exterior of the Project, the access and pedestrian and traffic circulation features (including location and methods of ingress and egress), the preliminary fa<;ade treatment, an all other relevant design factors. (s) "Design Guidelines" means the Knox Freeway/Cutting Boulevard Corridor Speci.fic Plan requirements applicable to the Property and the Craneway. 733\171172718.6 Page4 888
(t) "Developer" means the Developer identified on page 1 of this Agreement. The Developer represents the following to be true and correct: the Developer is Orton Development, Inc. a California corporation. "Developer" as used in this Agreement means Orton Development, Inc., and any authorized and approved successors and assigns pursuant to this Agreement. The principal office of the Developer is 3049 Research Drive, Richmond, CA 94806.
(u) "Escrow Holder" means the Walnut Creek branch of First American Title Company or such other title company as may be mutually agreed to by the Agency and the Developer.
(v) "Event of Default" means an event of default described in Sections 11.3 and 11.4.
(w) "Exchange Agreement" shall have the meaning set forth in Recital E. (x) "FEMA" means the Federal Emergency Management Agency. (y) "Final Construction Plans" means all construction documentation upon which the Developer and its contractors shall rely in building the Project. The Final Construction Plans shall include, without limitation, final architectural drawings, landscaping plans and specifications, final elevations, building plans and specification (also known as "working drawings" and commonly referred to in the construction industry as "Construction Documents"), and a time schedule for construction. The Final Construction Plans shall include the mitigation measures set forth the in the attached Exhibit C and any other measures required by any public entity as a condition of any permits or Land Use Approvals required for the Project.
(z) "Financing Plan" Shall have the meaning as provided in Section 2.9. (aa) "First Source Agreement" shall have the meaning as provided in Section

6.12, a form of which is attached as Exhibit J.
(bb) "Grant Deed" means the grant deed by which the Agency shall convey the Property in whole or in part to the Developer, substantially in the form of the attached Exhibit C.
( cc) "Hazardous Materials" means any substance, material, or waste which is:
(1) defined as a "hazardous waste", "hazardous material", "hazardous substance", "extremely hazardous waste", "restricted hazardous waste", "pollutant" or any other terms comparable to the foregoing terms under any provision of California law or federal law; (2) petroleum; (3) asbestos and asbestos containing materials; (4) polychlorinated biphenyls; (5) radioactive materials; (6) MTBE; or (7) determined by California, federal or local governmental authority to be capable of posing a risk of injury to health, safety, property or the environment. 7331171172718.6 PageS 889
The term "Hazardous Materials" shall not include: (i) construction materials, gardening materials, household products, office supply products or janitorial supply products customarily used in the construction, maintenance, rehabilitation, or management of commercial properties, buildings and grounds, or typically used in household activities, or (ii) certain substances which may contain chemicals listed by the State of California pursuant to California Health and Safety Code Section 25249.8 et seq., which substances are commonly used by a significant portion of the population living within the region of the Project, including . but not limited to, alcoholic beverages, aspirin, tobacco products, nutrasweet and saccharine, so long as such materials and substances are stored, used, and disposed of in compliance with all applicable Hazardous Materials Laws.
( dd) "Hazardous Materials Laws" means all federal, state, and local laws, ordinances, regulations, orders and directives pertaining to Hazardous Materials. (ee) "HUD" means the U.S. Department of Housing and Urban Development. (ff) "HUD Loan Documents" shall mean the documents evidencing the Section 108 Loan and BEDI Grant entered into by and between the Agency and HUD. (gg) "HUD Funds" means the Section 108 Loan and the BEDI Grant. (hh) "Land Use Approvals" means any governmental or regulatory approvals, permits or authority for the Project, other than the Building Permit, and including without limitation, approvals from SLC, BCDC, SHPO and the City. (ii) "NEP A" means the National Environmental Policy Act. (jj) "North Parking Area" shall mean that portion of the Property to be developed by the Developer as shown on the Site Map, subject to the City and community planning process as further set forth in Section 7.13.
(kk) "NPS" means the National Park Service.
(ll) "Off-Site Improvements" shall have the meaning set forth in Section 6.6 below.
(mm) "Oilhouse" means the approximately 7,000 square foot brick structure adjacent to the Building, and part of the Property as shown on the Site Map. (nn) "Performance and Payment Bonds" means bonds issued by a surety authorized to do business in California and approved by the Agency and/or City, such approval not to be unreasonably withheld, delayed or conditioned, to secure performance of the general contractor, subcontractors, and the work so bonded and to fund completion of any bonded work in the event the contractor so bonded is unable to complete its performance. 733\17\17271 8.6 Page6 890
( oo) "Permitted Exceptions" means those liens, encumbrances, and matters on the title to the Property shown on the Preliminary Title Report, this Agreement, and the Grant Deed and other exceptions required in connection with the approval of the Project and conveyance of the Property, as approved by the Developer and the Agency, all as set forth in Exhibit I.
(pp) "PMA" means the Program Management Agreement entered into by and between the Agency and the Developer dated November 4, 2003, concerning the performance of the Refit Work.
( qq) "Preliminary Title Report" means the following: Preliminary Title Report, number 780717CC, dated June 20, 2003 issued by First American Title Company. (rr) "Project" means the historic rehabilitation of the Ford Assembly Building and the Craneway into live/work lofts, commercial/office space, and public-serving uses, park and open space and pedestrian, bicycle and vehicular access and circulation, as more pmticularly described in the Scope of Development attached as Exhibit D. The Project also includes any ancillary facilities to be constructed, landscaping improvements. (ss) "Project Area" means the redevelopment project area established pursuant to the Redevelopment Plan.
(tt) "Property" means the Building, the Oilhouse, the North Parking Area, the Water Area and surrounding landscaped area as described in Exhibit B. (uu) "Purchase Price" has the meaning given in Section 4.3(b). (vv) "Redevelopment Plan" means the Amended and Restated Redevelopment Plan for Project Area 11-A (Harbour) adopted by City Council Ordinance No. 10-75 N.S. on June 9, 1975, as amended, and as it now exists or may hereafter be amended. (ww) "Refit Work" means the historic preservation, seismic strengthening and remediation work to be performed by the Developer prior to Closing, pursuant to the PMA. (xx) "Schedule of Performance" means the summary of the performance obligations of the Developer and the Agency required by this Agreement to be performed prior to the issuance of the Certificate of Completion for the Project. The Schedule of Performance is attached as Exhibit E and is included for ease of reference only. It is not intended to in any way modify this Agreement.
(yy) "Scope of Development" means the description of the Project set forth in the attached Exhibit D.
733\17\172718.6 Page? 891
(zz) "Section 108 Loan Deed of Trust" shall mean the deed of trust recorded against the Property in second lien position at Closing, securing the Developer's obligation to repay to the Agency the Section 108 Loan.
(aaa) "Section 108 Loan" means the Loan from the Agency to the Developer of up to Three Million Dollars ($3,000,000).
(bbb) "Section 108 Loan Note" means the promissory note payable to the Agency to be executed and delivered by the Developer to the Agency evidencing the Developer's obligation to repay the Section 108 Loan, in a form to be provided by the Agency. ( ccc) "SHPO" means the State Historic Preservation Officer. ( ddd) "Site" means the approximately 26-acre site on which the Property, the Craneway and certain other improvements are located as more particularly shown on the Site Plan.
(eee) "Site Investigation Reports" shall mean the reports governing physical assessment of the Property attached to this Agreement as Exhibit H, and provided to the Developer as further set forth in Section 2.6.
(fff) "Site Map" means the diagram attached to this Agreement as Exhibit A showing the Site.
(ggg) "SLC" means the State Lands Commission.
(hhh) "Te1m" means the te1m of this Agreement, commending on the date of this Agreement and ending on the earlier to occur of (1) the expiration date of the effectiveness of the Redevelopment Plan (currently, July 13, 2029), or (2) the date of any termination of this Agreement in accordance with the provisions hereof.
(iii) "Transfer" means, except as expressly excluded below:
(1) Any total or partial sale, lease, assignment or conveyance, or any trust or power, or any transfer in any other mode or form with respect to this Agreement or of the Property or any part thereof or interest therein, or any contract or agreement to do any of the same; or
(2) Any total or partial sale, assignment or conveyance, any trust or power, or any transfer in any other mode or form, of or with respect to the membership interest in the Developer or any member of the Developer or any contract to any of the same, including without limitation, any transfer or sale of any interest in the Developer for financing purposes unless approved by the Agency as part of the approved Financing Plan; or 7331171172718.6 Page8 892
(3) Any merger, consolidation, sale or lease of all or substantially all the assets of the Developer; or
( 4) The leasing of part or all the Property; provided, however, that the leases of commercial or office space to tenants of the Property in the ordinary course of business by Developer shall not be deemed a "Transfer" for purposes of this Agreement.

Gjj) "Water Area" means the approximately 1.7 acre portion of the Property that is submerged under water as shown in the Site Map.

1.2 Exhibits. The following exhibits are attached to and incorporated by reference into this Agreement.

Exhibit A Site Map
ExhibitB Legal Descriptions of the Property and the Craneway ExhibitC Form of Grant Deed
ExhibitD Scope of Development
ExhibitE Schedule ofPerfom1ance
ExhibitF Preliminary Site Plan
Exhibit G Insurance Requirements
ExhibitH Site Investigation Reports
Exhibit I Permitted Exceptions
Exhibit J First Source Agreement
ARTICLE 2. DEVELOPER PRE-DISPOSITION REQUIREMENTS

2.1 Conditions Precedent. As conditions precedent to the Agency's selling and conveying the Property to the Developer, the City's lease of the Cranewayto the Developer and the Developer's commencement of construction of the Project, the conditions set forth in this Article 2 must first be met by the times set for such conditions, unless such times are extended in writing by the Agency upon request of either party. Performance and achievement of the actions set forth in this Article 2 constitute conditions precedent to the Closing. Articles 3 and 4 set forth additional conditions precedent to the Closing. Satisfaction ofthese conditions depends on performance by the Developer. Only the Agency can waive satisfaction of the conditions in this Article 2.
7331171172718.6 Page9 893

2.2 CEQAJNEPA Documentation. Within sixty (60) days after the date of this Agreement, the Developer shall prepare and submit to the Agency such plans, specifications, drawings, and other information, as specified by the Agency, are reasonably necessary for the Agency to perform the environmental review process required by CEQA and NEP A, including any necessary archaeological or historical resource assessments. The Developer shall provide the Agency any updated documentation of the Project in order to facilitate the Agency's performance of the CEQAJNEP A review process.

2.3 Refit Work. The Developer and the Agency have entered into the PMA to accomplish certain Site clean up, remediation, seismic strengthening and weatherproofing work, as more fully set forth in the PMA. Developer's completion of the Refit Work in a manner satisfactory to FEMA and the Agency in their reasonable discretion shall be a condition precedent to the Agency's obligation to convey the Property to Developer. Notwithstanding the above, the Agency shall be solely responsible for compliance with all FEMA grant closeout and reporting requirements. The Developer shall provide FEMA representatives access to inspect the Property pursuant to Section 7.12 below.

2.4 Preliminary Site Plan.
(a) Prior to the Agency's consideration of this Agreement, the Developer submitted the Preliminary Site Plan to the Agency for review and approval. The approved Preliminary Site Plan is attached as Exhibit F. The Preliminary Site Plan shows the use of the Building by floor, the Craneway and the North Parking Area including the components called out in the Scope of Development. By execution of this Agreement, the Agency Board approves the Preliminary Site Plan.
(b) The Preliminary Site Plan reflects the goals and objectives of creating approximately 106 live/work units and related courtyards occupying approximately 160,000 square feet in the Building and 364,000 square feet of entertainment, office, commercial and visitor center space in the Building, the Oilhouse and the Craneway, while maintaining public access to the San Francisco Bay Trail and the waterfront. (c) lf, prior to submission of the Design Development Documents for the Project, the Developer desires to change the Project in any material manner which causes the Project not to be substantially in conformity with the distribution of uses in the Preliminary Site Plan, the Developer shall submit to the Agency Board ("Board") a revised Preliminary Site Plan for the Board's consideration. The Board shall review the revised Preliminary Site Plan and either approve or disapprove the revised Preliminary Site Plan within thirty (30) days after receipt. Any disapproval shall state in writing the specific reasons for the disapproval and specify in reasonable detail all of the changes the Agency requests be made in order to obtain approval. The Developer shall thereafter submit re-revised Preliminary Site Plan within thirty (30) days of notification of disapproval. The periods for submission of a revised Preliminary Site Plan and review and approval or disapproval by the Board shall continue to apply until a revised Preliminary Site Plan has been approved by the Board. When, and if, a revised Preliminary Site Plan has been approved, it shall form a part of this Agreement.
7331171172718.6 Page 10 894
(d) The Agency acknowledges that the precise layout shown in the Preliminary Site Plan is for illustrative purposes, only, and that the number of units and locations of walls shall not be deemed material elements of the Preliminary Site Plan (and, therefore, changes thereto shall not require Agency approval) so long as the overall distribution of uses of the Property is not materially altered from the Preliminary Site Plan. (e) The Agency further acknowledges that some uncertainty exists concerning the feasibility of developing residential live/work units in the Property due to life safety and related issues. If the appropriate City building department official determines that the development of the proposed residential live/work units in the Project is infeasible due to life safety or seismic concerns the Agency agrees to negotiate in good faith exclusively with the Developer on the redesign of the Project for a period not to exceed ninety (90) days beginning on the date of the infeasibility determination by the City building department. In such redesign the Developer shall have the right to alter the distribution of uses in the Property to substitute other uses for residential live-work, subject only to compliance with all applicable requirements of SHPO, FEMA, City and other laws, rules and regulations. If at the end of such ninety (90) day period the parties reach agreement on a new design for the Project this Agreement shall terminate and the parties shall enter into a new disposition and development agreement setting forth the parties obligations as to the new project. If at the end of such ninety (90) day period the parties are unable in good faith to reach agreement, then at the option of either party, this Agreement may be terminated pursuant to the provisions of Section 11.2 below. (f) Notwithstanding any other provision of this Agreement, it is mutually understood and agreed that unless the Agency, acting in its sole discretion, is willing to extend the date for Agency approval of Final Construction Plans for the Project, the Preliminary Site Plan must be approved by the Agency no later than ninety (90) days after date of this Agreement, or, at the option of either party, this Agreement may be terminated pursuant to the provisions of Article 11 below.

2.5 Developer Deposit. Upon execution of this Agreement the Developer shall deposit with the Agency the sum of One Million Dollars ($1 ,000,000), (the "Deposit"). The Deposit shall be available to the Developer to use only to pay for hard construction costs incurred by Developer under the PMA upon submission of a draw request consistent with the requirements set forth in Section 5.7(i) below, but only if the Developer has already expended at least Two Million Dollars ($2,000,000) of its own funds for work performed under the PMA.

Notwithstanding Section 9(b) of the PMA, if this Agreement is terminated pursuant to Section

11.4 below, the portion of the Deposit expended by Developer under the PMA shall be nonrefundable. The portion of the Deposit not withdrawn by the Developer for use under the PMA shall be nonrefundable except as set forth in Sections 11.2 and 11.3 below. The portion of the Deposit remaining with the Agency at Closing shall be applied to the Purchase Price.

2.6 Site Investigation Reports.
(a) The Agency has, prior to the date ofthis Agreement, delivered to the Developer the Site Investigation Reports relating to the condition of the Site (including the potential presence of Hazardous Materials) as attached in Exhibit H. The Developer shall 733\17\172718.6 Page 11 895
review the Site Investigation Reports and shall notify the Agency in writing if it accepts the condition of the Property as set forth in the Site Investigation Reports within thirty (30) days after the date of this Agreement.
(b) The Agency has, prior to the date of this Agreement, provided to Developer an opportunity of conducting environmental assessments and other tests, as deemed necessary by Developer to satisfy Developer's due diligence. The Developer shall notify the Agency in writing if it accepts the condition of the Property and Craneway based on the Developer's own investigations within thirty (30) days after the date of this Agreement.

2.7 Design Development Documents.
(a) The Developer shall submit design development documents ("Design Development Documents") for the Project within sixty (60) days after the date of this Agreement.

During the preparation of all plans and related documents, Developer shall communicate and consult informally, and shall hold regular progress meetings, as frequently as necessary to insure that the formal submittal of any plan or related document to the Agency can receive prompt consideration. The Design Development Documents shall be consistent with and in substantial conformity with the Project components set forth in the definition of Project in Section 1.1, the Scope of Development, the Preliminary Site Plan, the approved Preliminary Plans, the Redevelopment Plan, the Design Guidelines, and this Agreement. (b) The Community and Economic Development Director shall review the proposed Design Development Documents and shall approve or disapprove the Design Development Documents within thirty (30) days after receipt. Any disapproval shall state in writing the specific reasons for disapproval and the specific changes the Agency Community and Economic Development Director reasonably requests be made in order to obtain Agency's approval. The Developer shall thereafter submit revised Design Development Documents to the Community and Economic Development Director for approval within forty-five (45) days after notification of disapproval. The Agency shall either approve or disapprove (as provided above) the revised Design Development Documents within thirty (30) days after receipt. If disapproved, the Developer shall have forty-five ( 45) days to submit further revised Design Development Documents.
(c) The periods for submission of revised Design Development Documents and review and approval or disapproval by the Agency shall continue to apply until Design Development Documents are agreed to by both parties. Notwithstanding any other provision of this Agreement, it is mutually understood and agreed that unless the Agency, acting in its sole discretion, is willing to extend the date for Agency approval of Final Construction Plans, Design Development Documents must be approved by the Agency no later than one hundred fifty (150) days after the date of this Agreement, or, at the option of either party, this Agreement may be terminated pursuant to the provisions of Article 11 below. The above time frames may be extended in writing by the Agency, in its sole discretion, providing that Developer is progressing in a reasonably tin1ely fashion, upon written request from Developer. 733\17\17271 8.6 Page 12 896
(d) When the Design Development Documents have been approved by the Agency, they shall form a part of this Agreement. Only upon Agency approval of Design Development Documents shall tins pre-disposition condition be deemed met. (e) Any material change, modification, revision or alteration of the approved Design Development Documents shall be snbn1itted immediately for approval by the Community and Econon1ic Development Director, such approval not to be unreasonably withheld, delayed or conditioned. If not so approved, the previously approved Design Development Documents shall continue to control. A "material" change, modification, revision or alteration of the approved Design Development Documents is one that would substantially alter the previously approved location, design, height, size, or exterior appearance of the improvements, including but not limited to landscaping, parking, and ingress and egress improvements, to be constructed on the Property and Craneway. Changes to an individual tenant's improvements in the building's interior shall not be considered as a material change requiring additional approval providing the changes effect only the interior of the structure. The subn1ission, review, and resubn1ission provisions of subsection (b) and (c), above shall apply until the Design Development Documents have been approved.
(f) Notwithstanding the foregoing, any change in the Design Development Documents made necessary to comply with the conditions of approval imposed in connection with Development Approvals or the Building Permits shall be deemed approved by the Agency if such change does not change the uses of the Property and Craneway as set forth in the previously approved Design Development Documents or does not materially alter the density for buildings on the Property and Craneway as set forth in the previously approved Design Development Documents.

2.8 Land Use Approvals.

Developer shall use commercially reasonable efforts to obtain all necessary Land Use Approvals within sixty (60) days after Agency's approval of the Design Development Documents. If Developer is not able to obtain all necessary Land Use Approvals with City mandated conditions acceptable to Developer within said time period, Developer, at its election, may tern1inate this Agreement pursuant to Article 11.

2.9 Final Construction Plans.
(a) No later than sixty (60) days following the Agency's approval of the Design Development Documents, the Developer shall submit to the Agency its Final Construction Plans for the Project which shall meet the components set forth in the definition of Project in Section 1.1 and the Scope of Development. The Final Construction Plans shall be based upon the approved Land Use Approvals and the approved Design Development Documents and shall not materially deviate therefrom without the express written consent of the Agency.
(b) The scope of the Agency's review of the Final Construction Plans for the Project shall be linnted to a determination of conformity with the approved Design Development 733\171172718.6 Page 13 897
Documents and the Scope of Development for the Project, the exterior of the buildings (including height, size and bulk of buildings and location on the site), the interior layout, landscaping improvements, pedestrian and vehicular circulation facilities, including methods and location of ingress and egress, and the quality of design and materials for the Project. (c) If the Final Construction Plans of the Project submitted to the Agency conform to the provisions of this Agreement, the approved Design Development Documents and the Redevelopment Plan, the Agency shall approve in writing such Final Construction Plans and no further filing of Final Construction Plans by the Developer or approval by the Agency thereof shall be required except with respect to any material change. Unless rejected by the Agency for their failure to comply with the foregoing requirements within sixty (60) days of submission by the Developer, the submitted Final Construction Plans shall be deemed accepted. (d) If rejected by the Agency in whole or in part, the Developer shall submit new or corrected Final Construction Plans within thirty (30) days of notification of the Agency's rejection and the reasons therefor. The Agency shall then have fifteen (15) days to review and approve the Developer's new or corrected Final Construction Plans. The provisions of this Section 2.9 relating to time periods for approval, rejection, or resubmission of new or corrected Final Construction Plans shall continue to apply until Final Construction Plans have been approved by the Agency at which time they shall be attached to and become a part of this Agreement as if fully set forth herein. Only upon approval of the Final Construction Plans shall this pre-disposition condition be met.
(e) Notwithstanding any other provision ofthis Agreement, it is mutually understood and agreed that unless the Agency, acting in its sole discretion, agrees to extend the date for Agency approval of Final Construction Plans, Final Construction Plans must be approved by the Agency no later than eleven (11) months after the date of this Agreement, or, at the option of either party, tllis Agreement may be terminated pursuant to the provisions of Article 11 below. (f) The parties further agree and understand that notwithstanding the time requirements set forth in this Article 2 for submissions to the Agency by Developer and review and approval of such items by the Agency, Developer is responsible for assuring that all items are submitted to the Agency in approvable form in a timely manner such that the Agency may have the time permitted by this Section 2.9 to review and approve Final Construction Plans no later than the dates set forth above.
(g) If the Developer submits Final Construction Plans in an approvable form and Agency, by complete inaction, neither approves nor disapproves within the time frames established for approval of Final Construction Plans, the Final Construction Plans, as submitted, shall be deemed approved and the Agency may not terminate the Agreement pursuant to Article Nine.

2.10 Financing Plan
(a) At the time the Developer submits its Design Development Documents for the Project to the Agency, the Developer shall submit for Agency approval evidence of the 733\17\172718.6 Page 14 898
availability of the funds necessary to acquire the Property and to redevelop the Property and Craneway (the "Financing Plan"). The Financing Plan shall include:
(i) An estimated cash flow projection, including an operating pro forma for the first five (5) years of operation;
(ii) An estimated cost breakdown for development and construction of the Project;
(iii) A copy of a commitment to execute a construction contract, approved and accepted by the Developer, containing a guaranteed maximum cost for construction of the Project, which specifies the expected guaranteed maximum cost; (iv) A description of any joint ventures or parh1erships the Developer proposes to enter into in order to provide funds for construction of the Project and acquisition of the Property, including copies of the proposed joint venture or partnership agreements prior to assigning this Agreement to such entity;
(v) A copy of the commitment or connnitments obtained by the Developer for equity investments, loan or loans for interim construction financing (and permanent financing, if any) and other financing from external sources (including proposed joint ventures and partnerships), certified by the Developer to be a true and correct copy or copies thereof; and (vi) A certified financial statement, other financial statement, or certification in writing from a financial institution doing business in California in which Developer has deposited funds or other forms of security, in such form reasonably satisfactory to the Agency evidencing other sources of capital sufficient to demonstrate that the Developer has adequate funds available and is committing such funds to cover the difference, if any, between costs of development and construction of the Project and acquisition of the Property and the amount available to the Developer from external sources. (b) Upon receipt by the Agency of the proposed Financing Plan, the Agency shall promptly review the Financing Plan and shall approve or disapprove it within thirty (30) days after submission if it conforms to the provisions of this Agreement. The Agency's review of the Financing Plan shall be limited to determining if the financing contemplated in the Financing Plan would provide sufficient and reasonably available funds to undertake and complete the development and construction of the Project, to acquire the Property, and determining if it is consistent with the terms of this Agreement. (c) If the Financing Plan is not approved by the Agency, the Agency shall set forth in writing and notify the Developer of the reasons therefor. The Developer shall thereafter resubmit a revised Financing Plan to the Agency for its approval within thirty (30) days of the Agency's notification of disapproval. The Agency will either approve or disapprove the revised Financing Plan within fifteen (15) days of resubrnission by the Developer, and if disapproved, this Agreement may be teffilinated pursuant to Article Nine below. Only upon approval of a Financing Plan shall this pre-disposition condition be deemed met. 733117\172718.6 Page 15 899
(d) The parties agree that notwithstanding the time requirements set forth in this Section 2.10 for submission and resubmission to the Agency by the Developer of a proposed Financing Plan and review and approval of the Financing Plan by the Agency, the Developer is responsible for assuring that a Financing Plan in approvable form is submitted to the Agency in a timely manner such that the Agency may have the time permitted by this Section 2.10 to review and approve a Financing Plan no later than eleven (11) months after the date of this Agreement. (e) Prior to the recordation of the Certificate of Completion of the Project, any material change, modification, revision or alteration of the approved Financing Plan must first be submitted to and approved by the Agency for conformity to the provisions of this Agreement. If not so approved, the approved Financing Plan shall continue to control.

2.11 Building Permit. No later than ten (1 0) days after Developer receives the Agency's approval of the Final Construction Plans for the Project, Developer shall apply for, and make commercially reasonable efforts and obtain issuance of a building permit from the City allowing the construction of the Project on the Property and the Craneway called for in the Final Construction Plans. The Agency shall render all reasonable assistance to the Developer to obtain such Building Permit. At Developer's election, Agency agrees that Building Permits, consistent with the approved Final Construction Plans, may be pursued in phases to allow initiation of construction as early as possible. It is anticipated that potential phases may include (i) demolition, grading and foundation; and (ii) structure. Notwithstanding any other provision of this Agreement, it is mutually understood and agreed that unless the Agency, acting in its sole discretion, agrees to extend the date for application of the building permit, the Developer shall apply for building pennit no later than one year (1) after the date of this Agreement, or, at the option of either party, this Agreement may be terminated pursuant to the provisions of Article 11 below.

2.12 Evidence of Availability of Funds. Within ten (10) days following the issuance of a Building Permit for construction of the Project, but no later than one year (1) after the date of this Agreement, the Developer shall submit to the Agency evidence reasonably satisfactory to the Agency that any conditions to release or expend funds described in the approved Financing Plan for the purpose of paying the costs of constructing ofthe Project and acquiring the Property and leasing the Craneway for the Project have been met or will be met at the Closing and that such funds will be available at or following the Closing for construction and reimbursement, if any, to the Agency.

2.13 Construction Contract.
(a) The Developer shall enter into contracts for the construction of the Project with reputable contractors. Those contracts may provide for the work to be performed for fixed and specified maximum amounts or allowances or for cost-of-the-work plus a fee, pursuant to the approved Final Construction Plans and the Financing Plan. (b) Within ten (1 0) days following the issuance of a Building Pennit for construction of the Project, the Developer shall submit a copy of all construction contracts to the 733\17\172718.6 Page 16 900
Agency's Community and Economic Development Director or a designee, on a confidential basis, for the sole and limited purposes of determining: (a) that the amount of the costs of work has been reasonably estimated and is consistent with the amount set forth in the approved Financing Plan; (b) that no changes to the provisions of the contract requiring the approval of Agency shall be made without the prior consent ofthe Agency's Community and Economic Development Director or a designee; and (c) that the covenants as to Equal Opportunity, Prevailing Wages and First Source hiring set forth in Sections 6.8, 6.9, and 6.12 of this Agreement have been met.

Unless the Agency's Community and Economic Development Director or a designee notifies the Developer in writing within ten (1 0) days of submitting the contract( s) that the contract has been disapproved, it shall be deemed approved. Agency's approval shall merely constitute satisfaction ofthe conditions set forth in this Section 2.13.
(c) The Developer shall enter into Construction Contracts only with licensed contractors having the reputation, experience, skill, and financial capability and qualification for serving as the contractor on first-class construction projects of similar magnitude in Northern California.
(d) The parties agree that notwithstanding the time requirements set forth in this Section 2.13 for submission to the Agency by the Developer of the proposed construction contracts and review and approval of the construction contracts by the Agency, the Developer is responsible for assuring that the construction contracts in approvable form is submitted to the Agency in a timely manner such that the Agency may have the time permitted by this Section 2.13 to review and approve the construction contracts no later than one (1) year after the date of this Agreement.

2.14 Performance and Payment Bond(s). The Developer shall deliver to the Agency copies of any payment bonds or performance bonds(s) that may from time to time he required by the Developer's construction lender or for the construction of any required public improvements.

2.15 Insurance.
(a) The Developer shall submit to Agency evidence of the insurance coverage meeting the general requirements set forth in Section 12.9, below, not less than ten (10) days prior to initiating any work on the Property and Craneway. Agency shall review and reasonably approve or disapprove of the evidence of insurance not less than ten (10) days after submission of complete information in the form required by Agency or City. If Agency disapproves the evidence of insurance, it shall specifY in writing the reasons for such disapproval. Developer shall resubmit the information required within fifteen ( 15) days. The review and submission periods shall continue to apply until Agency approves the evidence of insurance coverage. No work shall be initiated on the Property and Craneway prior to receipt of Agency's approval. Agency shall not unreasonably withhold, delay or condition approval of any insurance. (b) Each contractor and each sub-contractor shall have furnished the Agency with evidence of the insurance coverage meeting the general insurance requirements set forth in 7331171172718.6 Page 17 901
Section 12.9, below, prior to initiating any work on the Property and Craneway. The periods for submission, review and approval shall apply as stated in subsection (a) above. (c) The parties agree that notwithstanding the time requirements set forth in this Section 2.15 for submission and resubmission to the Agency by the Developer of the evidence of insurance and review and approval of the evidence of insurance by the Agency, the Developer is responsible for assuring that the evidence of insurance in approvable form is submitted to the Agency in a timely manner such that the Agency may have the time permitted by this Section 2.15 to review and approve a Financing Plan no later than one (1) year after the date of this Agreement.

2.16 User Commitments. Upon the execution ofthis Agreement, Developer shall commence and shall diligently endeavor and use best efforts to negotiate lease commitments for all of the commercial space within the Project. The Developer shall submit periodic (but no less frequently than quarterly) repo1is on its leasing efforts and shall provide the Agency with copies of all leasing documents. The Developer shall secure, and deliver copies to the Agency of, the minimum number of commercial lease commitments required by any fmancing source by Closing.

2.17 Agency Nate and Agency Deed of Trust. The Developer shall have signed, acknowledged where appropriate and delivered to the Escrow Holder a promissory note and deed of trust, in forms acceptable to the Agency, which provide for the Developer to make participation payments to the Agency as described in Article 8. Such Agency Deed of Trust shall be subordinated as provided in Aliicle 8 below.

2.18 Section 108 Loan Note and Section 108 Loan Deed of Trust. The Developer shall have signed and delivered to the Escrow Holder a promissory note and deed of trust, in f01ms acceptable to the Agency which provide for the Developer to make payments to the Agency on the Section 108 Loan as described in Article 5. Such Section 108 Loan Deed of Trust shall be subordinated as provided in Article 5 below.

2.19 National Park Service Lease. Prior to.Closing the Developer and the NPS shall have begun good faith negotiations of the lease described in Section 7.10 below.

2.20 Feny Terminal Public Access Easement. At Closing, the Developer shall execute an easement agreement in a form acceptable to the City and Developer in their reasonable discretion granting the public access over that portion of the Property, necessary for access to the Richmond ferry terminal adjacent to the Site.

2.21 Certificate of Readiness and Completion Guarantee. Prior to commencement of construction and prior to the Closing, the Developer shall certify to the Agency that the Developer is ready, willing and able, in accordance with the terms of this Agreement, to meet its obligations with respect to acquisition of the Property, lease of the Craneway and the construction ofthe Project, and that all conditions precedent to the performance of such obligations and all other pre disposition requirements of the Developer under this Agreement have been fulfilled. The 733117\172718.6 Page 18 902
Developer shall also deliver to the Agency at this time, a Certificate of Readiness and Completion Guarantee, from J.R. Orton Ill, in a fmm acceptable to the Agency.

2.22 Cooperation in Securing HUD Funds. The Developer shall cooperate with the Agency in securing the HUD Funds and in the processing of all documents necessary for receipt of the HUD Funds including preparation of an appraisal ofthe Property acceptable to HUD.

ARTICLE 3. AGENCY PRE-DISPOSITION ACTIONS

3.1 Conditions Precedent. This Article 3 sets forth various actions that the Agency shall perform and achieve in order to enable conveyance of the Property and lease of the Craneway to the Developer in accordance with Article 4. Performance and achievement of the actions set forth in this Article 3 constitute conditions precedent to the Closing. Articles 2 and 4 set forth additional conditions precedent to the Closing.

3.2 CEQAINEPA Review. Following execution of this Agreement, the Agency, at the Developer's sole cost and expense, shall diligently complete any required environmental review of the Project in accordance with CEQA and NEPA and the time frames set forth in the Schedule of Performance. The Developer acknowledges that the environmental review process under CEQA and NEP A will involve preparation and consideration of additional information as well as consideration of input from interested organizations and individuals; that approval or disapproval of the Project following completion of the environmental review process is within the sole, complete, unfettered and absolute discretion of the Agency without limitation by or consideration of the terms of this Agreement; and that the Agency makes no representation regarding the ability or willingness of the Agency to approve development of the Project at the conclusion of the environmental review process required by CEQ A and NEP A, or regarding the imposition of any mitigation measures as conditions of any approval that may be imposed on the Project. The parties recognize that, as a result of the environmental review process, the Agency has the absolute discretion and right to terminate this Agreement, and no cost shall be incurred by the Agency as a result of such termination. In addition, the Developer acknowledges that any required approvals by any other local, state or federal agency may require additional environmental review, and that any approval by the Agency shall not bind any other local, state or federal agency to approve the Project or to impose mitigation measures which are consistent with the terms of this Agreement or with the terms of any mitigation measures required by the Agency pursuant to the Agency's environmental review.

3.3 Tidelands Exchange Agreement. Prior to Closing, the Agency shall formalize the Exchange Agreement with the City and the SLC.

3.4 Use ofHUD Funds. Prior to Closing, the Agency shall comply with all HUD requirements in order to loan the HUD Funds to the Developer for the construction of the Project.

3. 5 Craneway Lease. Prior to Closing the Agency shall use best efforts to have the City enter into a lease not to exceed fifty five (55) years with the Developer for the Craneway, which lease shall be in a form mutually acceptable to City and Developer and shall comply with 7331171172718.6 Page 19 903
the requirements of Chapter 527 of Statutes 2000 governing the leasing of the Craneway by the City and SLC easement and use restrictions.

ARTICLE 4. DISPOSITION OF PROPERTY AND LEASE OF

CRANEWAY

4.1 Sale and Purchase/Lease. Provided that all of the Developer's pre-disposition conditions have been met and all required actions taken in the manner and in the time set forth in Article 2, provided that all the Agency's pre-disposition conditions have been met and all required actions taken in the manner and in the times set forth in Article 3, and provided the condition set forth in Section 4.4 has been met, the Agency shall sell and convey the Property or portion thereof to the Developer, the Developer shall purchase and accept conveyance from the Agency of the Property, and the City and Developer shall enter into the lease of the Craneway pursuant to the terms, covenants, and conditions of this Agreement. The consideration for the purchase shall be as set forth in Section 4.3 below.

4.2 Opening Escrow. To accomplish the purchase and transfer of the Property and lease of the Craneway, the parties shall, within thirty (30) days after the date of this Agreement, establish an escrow with the Escrow Holder. The parties shall execute and deliver all written instructions to the Escrow Holder to accomplish the terms hereof, so long as such instructions are consistent with this Agreement.

4.3 Close of Escrow.
(a) The Closing shall occur within thirty (30) days after the Developer has met all of its pre-disposition conditions as set forth in Article 2 above, and the Agency has met all of its predisposition requirements as set forth in Article 3 above, but in no event shall the Closing occur later than December 18, 2004.
(b) The Purchase Price for the Property shall be Five Million Four Hundred Thousand Dollars ($5,400,000). The Deposit shall be credited against the Purchase Price. The Developer acknowledges that the Agency has retained consultants and others to assist in the determination of compliance with the requirements of Health and Safety Code Section 33433 and that appropriate findings in compliance with said provisions are required for the approval of this Agreement. Developer shall pay the purchase price by deposit into escrow of cash or other readily available funds.
(c) Upon Closing, the Agency shall convey the Property to Developer by grant deed ("Grant Deed") in substantially the form set forth in the attached Exhibit D. (d) Upon Closing, the Agency, if necessary will convey the Craneway to the City and the City and the Developer shall enter into the lease of the Craneway described in Section 3.7.
733\17\172718.6 Page20 904

4.4 Condition of Title. At Closing, the Property shall be free and clear of all liens, encumbrances, clouds and conditions, rights of occupancy or possession, except the Permitted Exceptions. At Closing, the leasehold interest in the Craneway shall be free and clear of all liens, encumbrances, clouds and conditions, rights of occupancy or possession, except the SLC restrictions, BCDC and other regulatory agency restrictions if any, and easements for public rights of access to the shoreline and San Francisco Bay Trail.

4.5 Physical Condition of Property and Craneway.
(a) Disclosure. In fulfillment of Health and Safety Code Section 25359.7(a), the Agency hereby represents, warrants, and covenants, that except as disclosed in the Site Investigation Reports as described in Section 2.6, above, which reports Developer hereby acknowledges receiving, the Agency has no knowledge and has no specific reasonable cause to believe that any Hazardous Mate1ials have come to be located on or beneath the Property and/or Craneway or that any release of Hazardous Materials has come to be located on or beneath the Property and/or Craneway, any property adjacent to the Property and/or Craneway which might migrate on, to or under the Property and/or Craneway.
(b) Due Diligence. The Developer acknowledges that it has had the opportunity granted by the Agency to adequately investigate the Property and Craneway pursuant to Section 2.6, to review the Site Investigation Reports, and, prior to the date ofthis Agreement to review the enviromnental assessment documents described in Section 2.6. (c) "As Is" Conveyance. The Property and Craneway shall be conveyed in "as is" condition. The Developer hereby indemnifies and releases the Agency and the City from any and all claims, liabilities, damages, and judgments which may result from the presence, removal, and storage of any hazardous substances on the Property and Craneway (including those identified in the Site Investigation Reports and accepted by the Developer pursuant to Section 2.6) after the Closing. The Agency shall have no responsibility for determining the suitability oftlle Property and Craneway for the Project, and if the conditions of the Property and Craneway are not entirely suitable for the development oftlle Project, the Developer shall put the Property and Craneway in a suitable condition for construction of the Project. The Developer waives any right of reimbursement or indemnification from the Agency for Developer's costs or liabilities related to any physical conditions on the Property and Craneway, including without limitation those which may arise from the presence, removal, and storage of any Hazardous Materials on the Property and Craneway (including tllose identified in the Site Investigation Reports) after the Closing. This waiver shall survive termination of this Agreement. Agency hereby assigns to Developer any rights Agency may possess, if any, as against those consultants and independent contractors which performed tlle Site Investigation Reports.
(d) Developer May Independently Investigate. Agency has granted a right of entry to allow Developer to independently investigate the condition of the Property. (e) Agency's Disclosures. These disclosures are made based on the best of Agency's knowledge and without further representations as to condition, development capability, 733\17\172718.6 Page 21 905
or the appropriateness ofthe Property and Craneway for development or suitability for any particular use. Developer should confirm, to Developer's satisfaction, that the condition of the Property and Craneway is acceptable to Developer.

4.6 Costs of Escrow and Closing. Ad valorem taxes, if any, shall be prorated as of the date of conveyance. The lien of any bond or assessment shall be assumed by the Developer and assessments payable thereon shall be prorated as of the date of conveyance. Agency shall pay any delinquent ad valorem taxes and any amounts owning for delinquent bonds and assessments as of the date of conveyance. The Developer shall bear the costs of title insurance. The Agency shall bear the cost of title company document preparation and recordation fees. All other costs of escrow (including the Escrow Holder's fee) shall be evenly borne by the parties. The costs borne by the Developer shall be in addition to the purchase consideration set forth in Sections 4.3.

4. 7 Real Estate Commissions. Each party represents and warrants that it has not entered into any agreement, and has no obligation, to pay any real estate commission in connection with the transaction contemplated by this Agreement. If a real estate commission is claimed due to the actions of any party hereto, then the party whose actions have given rise to the claim for the commission shall indemnify, defend, and hold the other party harmless from any liability related to such commission. The provisions of this Section shall survive termination of this Agreement.

4.8 Prior Developer Plans. The Agency agrees to assign to Developer full right, title and interest in all plans, studies, reports, approvals and permits acquired by the Agency from Assembly Plant Partners, LLC, the previous developer of the Property ("APP"), promptly upon receipt of the same by the Agency from APP.

ARTICLE 5. SECTION 108 LOAN AND BEDI GRANT

5.1 HUD Section 108 Loan and BEDI Grant Documents. All provisions in this Article 5 regarding the Section 108 Loan and the BEDI Grant from the Agency to the Developer shall be subject to the provisions set forth in the HUD Loan Documents to be entered into between HUD and the Agency subsequent to execution ofthis Agreement. The parties agree to amend the terms of this Article 5 as necessary to the extent the HUD Loan Documents require different provisions, and agree to enter into a separate loan agreement evidencing the terms of this Article 5 if required byHUD.

5.2 Section 108 Loan.
(a) The Agency shall loan to the Developer the Section 108 Loan in the principal amount of Three Million Dollars ($3,000,000) for the purposes set forth in Section 5.5 of this Agreement. The obligation ofDeveloper to repay the Section 108 Loan shall be evidenced by the Section 108 Note in the form provided by the Agency. 733\17\172718.6 Page22 906
(b) The amount of the Developer's construction financing, when combined with the Section 108 Loan amount shall not exceed eighty percent (80%) of the appraised value of the Property.

5.3 Section 108 Loan Definitions. The following definitions shall apply specifically to this Article 5:
(a) "Date of Disbursement" means the date on which the Agency makes the initial disbursement of Section 108 Loan proceeds to the Developer in accordance with the Section 108 Note.
(b) "Interest Conversion Date" means the date the interest rate converts from a floating rate to a fixed rate.
(c) "Interest Reserve" means the amount of funds which will be withheld from the BEDI Grant to pay anticipated interest payments accrued on the aggregate disbursements made under the Section 108 Note during the Interest Reserve Period. (d) "Interest Reserve Period" means that period from the Date of Disbursement to the Payment Conversion Date.
(e) "Loan Fees" means the fees to be paid to the Agency pursuant to Section

5.10. (f) "Maturity Date" means the twentieth (20th) anniversary of the Date of Disbursement.
(g) "Payment Conversion Date" means the first (1 '')day of the thirty-sixth (36th) month following the Date of Disbursement.

5.4 Interest.
(a) Subject to the provisions of Section 5.4(b) below, the initial interest to be charged on the unpaid principal balance of the Section 108 Loan shall be at a rate equal to the three (3) month London Interbank Offered Rate (LIBOR) plus 50 basis points or such amount as is charged by HUD under the HUD Loan Documents, commencing on the Date of Disbursement. The parties acknowledge that HUD requires the interest rate to convert from a floating to a fixed rate and that HUD currently requires such interest rate change to occur only once a year. The Agency agrees that so long as the Developer is not in default under this Agreement that the Developer may determine the Interest Conversion Date; provided, however, the Interest Conversion Date shall not be later than the date required by HUD pursuant to the HUD Loan Documents.
(b) In the event of an Event of Default described in Section 11.4, interest on the Section I 08 Loan shall begin to accrue, as ofthe date of such default and continuing until 7331171172718.6 Page23 907
such time as the Section 108 Loan funds are repaid in full or the default is cured, at the default rate of the lesser often percent (10%), compounded annually, or the highest rate permitted by law.

5.5 Use of Section 108 Loan Funds.
(a) The Developer shall use the Section 108 Loan to fund construction of the Project consistent with the approved Financing Plan.
(b) The Developer shall not use the Section 108 Loan funds for any other purpose without the prior written consent of the Agency.

5.6 Section 108 Loan Deed of Trust. The Developer shall provide the Agency the Section 108 Loan Deed of Trust securing Developer's obligation to repay the Section 108 Loan, in a form to be provided by the Agency. The Agency's security interests under the Section 108 Loan Deed of Trust shall at all times be and remain subject and subordinate to Approved Security Interests for financing the acquisition and/or construction of the Project and any modifications, renewals, increases and refinancings thereof (the "Senior Liens"), and the Agency shall execute such subordination agreements and other documents containing such provisions usual and customary in transactions of this type in order to subordinate the Section 108 Loan Deed of Trust security interests held by the Agency to the Senior Liens and the indebtedness secured thereby. The Agency shall be obligated to subordinate the Section 108 Loan Deed of Trust only if the aggregate amount of indebtedness secured by the Senior Liens together with that secured by the Agency Deed of Trust and Section 108 Loan Deed of Trust does not exceed eighty percent (80%) of the appraised value of the Property.

5.7 Conditions Precedent to Disbursement of Section 108 Loan.

The maximum amount of funds to be disbursed pursuant to this Section 5. 7 shall not exceed Three Million Dollars ($3,000,000). The Agency shall not be obligated to make any disbursements of Section 108 Loan proceeds for construction of the Project, unless the following conditions precedent are satisfied prior to each such disbursement of the Section 108 Loan:
(a) There exists no Default nor any act, failure, omission or condition that would constitute an event of Default under this Agreement; (b) BUD has provided the Agency a Contract for Loan Guarantee Assistance and entered into the BUD Loan Documents with the Agency, and has provide the Agency the Section 108 Loan funds;
(c) The Agency has conveyed the Property to the Developer and the Developer has entered into a lease with the City for the Craneway and all conditions set forth in Article 2 of this Agreement have been satisfied;
733\17\172718.6 Page24 908
(d) The Developer has executed the Section 108 Loan Note and Section 108 Loa11 Deed of Trust and delivered them to the Agency;
(e) A title insurer reasonably acceptable to the Agency is unconditionally and inevocably committed to issuing an ALTA Lender's Policy of insurance insuring the priority of the Section 108 Loan Deed of Trust in the 311lount of the Section 108 Loan, subject only to such exceptions and exclusions as may be reasonably acceptable to the Agency, and containing such endorsements as the Agency may reasonably require; (f) The Section 108 Deed of Trust has been recorded against the Property in the Office of the Recorder of the County of Contra Costa; (g) Developer has furnished the Agency with evidence of the insurance coverage meeting the requirements of Section 12.9 below; (h) The undisbursed proceeds of the Section 108 Lom1, together with other funds or firm commitments for funds that the Developer has obtained in connection with the Project, are not less than. the amount that the Agency determines is necessary to pay for development of the Project and to satisfy all ofthe covenants contained in this Agreement; (i) The Agency has received a written draw request from the Developer, including certification that the condition set forth in Section 5.7(a) continues to be satisfied, and setting forth the proposed uses of funds consistent with the Financing Plan, the 3111ount of funds needed, a11d, where applicable, a copy of the bill or invoice covering a cost incurred or to be incuned. When a disbursement is requested to pay any contractor in com1ection with improvements on the Property, upon request of the Agency, the written request for funds must be accompmlied by certification by the Developer's architect reasonably acceptable to the Agency that the work for which disbursement is requested has been completed (although the Agency reserves the right to inspect the Property and make an independent evaluation).

5.8 Interest Reserve. As a condition of disbursement of the Section 108 Loan, Developer agrees that the Agency shall withhold a portion ofBEDI Grant sufficient to pay the anticipated interest that will accrue though the Payment Conversion Date (assuming the interest rate that is applicable on the Date of Disbursement) on the aggregate Section 108 Loan disbursements (the "Interest Reserve"). Should the sum of (i) the balance of the funds withheld to pay the Interest Reserve be insufficient to repay the interest then outstanding, or should the Agency reasonably believe that those funds will be insufficient to repay the projected interest due on or before the Payment Conversion Date, the Agency shall provide written notification of such actual or projected shortfall. Developer shall, within fifteen (15) calendar days of receipt of Agency's noti.fication, deposit with the Agency sufficient funds to pay all current and projected interest due on or before the Payment Conversion Date. Any funds remaining in the Interest Reserve at the Payment Conversion Date may be applied by the Developer to eligible loan costs as set forth in the approved Financing Plm. Notwithstanding the above, the Agency agrees that if the Developer's construction lender funds an interest reserve that includes the Section 108 Loan Interest Reserve 31110unt (the "Construction Loan Reserve") md the construction lender allows payment of the Section 108 Loan from the Construction Loan 733\17\172718.6 Page25 909
Reserve pursuant to Section 5.9(a) below, tbat the City shall not require creation of the Interest Reserve.

5.9 Repayment of Section 108 Loan. The Section 108 Loan shall be repaid as follows:
(a) Payments through Payment Conversion Date. For the thirty six (36) month period, beginning on the Date of Disbursement, Developer shall make and authorizes the Agency to disburse quarterly payments of accrued interest on tbe principal using the proceeds in the Interest Reserve account, or shall make disbursements from the Construction Loan Reserve, as applicable.
(b) Payments After Payment Conversion Date Through Maturity Date.

Following the Payment Conversion Date, the Developer shall make semi-annual payments to the Agency. The first such semi -annual payment shall be an interest only payment. The second semi -annual payment shall be a principal and interest payment. The payments shall be structured to fully an1ortize tbe Section 108 Loan over the period from the Conversion Date through tbe Maturity Date. The payment dates shall be determined such that they occur at least thirty (30) days prior to tbe date the Agency is require to make payments to HUD under the HUD Loan Documents.
(c) Pavment in Full. All principal and interest, if any, on the Section 108 Loan shall, at the option of the Agency, be due and payable upon the earliest of: (i) Transfer of tbe Project other than a Transfer permitted or approved by the Agency as provided in Article 9; (ii) the occurrence of an Event of Default for which the Agency exercises its right to cause the Section 108 Loan indebtedness to become inrmediately due and payable; or (iii) the Maturity Date.
(d) ~ent. The Developer shall have the right to prepay tbe Section 108 Loan at any time without penalty.

5.10 Payment of Loan Fees. As a condition of disbursement of the Section 108 Loan, Developer agrees that the Agency shall disburse approximately Twenty Three Thousand Nine Hundred Dollars ($23,900) from BEDI Grant funds, or such otber amount as set forth in the HUD Loan Documents, to pay Loan Fees.

5.11 BEDI Grant. The Agency shall provide the Developer the BEDI Grant in the principal amount of One Million Five Hundred Thousand Dollars ($1 ,500,000) for the purposes set forth in Section 5.12 of this Agreement.

5.12 Use ofBEDI Grant Funds.
(a) The Developer shall use tbe BEDI Grant to fund construction oftbe Project consistent with tbe approved Financing Plan.
733\171172718.6 Page26 910
(b) The Developer shall not use the BEDI Grant funds for any other purpose without the prior written consent of the Agency.

5.13 Conditions Precedent to Disbursement ofBEDI Grant.

The maximum amount of funds to be disbursed pursuant to this Section 5.13 shall not exceed One Million Five Hundred Thousand Dollars ($1,500,000). The Agency shall not be obligated to make any disbursements ofBEDI Grant proceeds for construction of the Project, unless the following conditions precedent are satisfied prior to each such disbursement of the BEDIGrant:
(a) There exists no Default nor any act, failure, omission or condition that would constitute an event of Default uuder this Agreement; (b) HUD has provided the Agency a Contract for Loan Guarantee Assistance and entered into the HUD Loan Documents with the Agency, and has provide the Agency the BEDI Grant funds;
(c) The Agency has conveyed the Property to the Developer and the Developer has entered into a lease with the City for the Craneway and all conditions set forth in Article 2 of this Agreement have been satisfied;
(d) Developer has furnished the Agency with evidence of the insurance coverage meeting the requirements of Section 12.9 below; (e) The Agency has received a written draw request from the Developer, including certification that the condition set forth in Section 5.13(a) continues to be satisfied, and setting forth the proposed uses of funds consistent with the Financing Plan, the amount of funds needed, and, where applicable, a copy of the bill or invoice covering a cost incurred or to be incurred. When a disbursement is requested to pay any contractor in connection with improvements on the Property, upon request ofthe Agency, the written request for funds must be accompanied by certification by the Developer's architect reasonably acceptable to the Agency that the work for which disbursement is requested has been completed (although the Agency reserves the right to inspect the Property and make an independent evaluation).

5.14 Applicable Federal Requirements. The Developer shall comply will all applicable federal requirements governing the use of the Section 108 Loan funds and the BEDI Grant as set forth in 24 CFR 570 et seq. including the applicable requirements of Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), and federal regulations issued pursuant thereto, which prohibit discrimination against the handicapped in any federally assisted program, and the applicable requirements of Title II and/or Title III of the Americans with Disabilities Act of1990 (42 U.S.C. 12131 et seq.).
7331171172718.6 Page27 911
ARTICLE 6. CONSTRUCTION OF THE PROJECT

6.1 Construction Pursuant to Plans. Unless modified by operation of Section 6.2, all works of construction and development on the Property and Craneway shall be done in accordance with the approved Final Construction Plans.

6.2 Material Change in Final Construction Plans. If the Developer desires to make any material change in any Final Construction Plans, the Developer shall submit the proposed change to the Agency for its approval. For purposes of this Section 6.2, a "material change" means a change of the Project shown in the approved Design Development Documents. Unless such proposed change is rejected by the Agency within thirty (30) days after receipt, it shall be deemed approved. If rejected within such time period, the previously approved Final Construction Plans shall continue to remain in full force and effect. Changes to tenant improvements on the interior shall not be considered as a material change requiring additional approval providing the changes affect only the interior of the structure.

6.3 Commencement of Construction. Notwithstanding any other provision of this Agreement, the Developer shall not commence construction of the Project, including any site preparation other than environmental assessment and perfo1mance of the Refit Work under the PMA, until the Closing has occurred. Commencement of construction for the purposes of this Section 6.3 means issuance of a notice to proceed to the generalcontractor(s), which notice requires construction activity to commence on the Property and Craneway within five ( 5) or fewer days after the date of the notice. Any breach of this Section shall afford the Agency its rights under Article 11 below. The Developer for itself, its successors and assigns, covenants and agrees to commence construction of the Project within thirty (30) days following the Closing unless the commencement date is extended in writing by the Agency in its sole discretion upon request of the Developer providing the Developer is diligently pursuing commencement of construction.

6.4 Completion of the Project. The Developer, for itself, its successors and assigns, hereby covenants and agrees to use diligent good faith efforts to prosecute to completion the construction of the Project within eighteen (18) months following the actual date of commencement of construction, and in any event within three (3) years after such commencement, subject to the provisions of Section 12.4 below.

6.5 Progress Reports. Until construction of the entire Project has been completed, the Developer shall provide quarterly written reports regarding construction progress in such detail as the Agency may reasonably require.

6. 6 Off-Site Improvements. The Developer shall design, construct and fund the construction of the improvements to Hall Avenue and Harbour Way South required by the Land Use Approvals (the Off-Site Improvements"). The Off-Site Improvements shall be completed no later than the date required for completion of construction of the Project.

6. 7 Entry by the Agency. The Developer shall permit the Agency, through its officers, agents, or employees, to enter the Property and Craneway at all reasonable times to inspect the work of construction to determine that such work is in conformity with the approved Final 733\171172718.6 Page28 912
Construction Plans or to inspect the Property and Craneway for compliance with this Agreement.

Agency shall comply with all security and safety requirements and precautions of Developer and its contractors during any such Agency inspections of the Property and Craneway. The Agency is under no obligation to (a) supervise construction; (b) inspect the Property and Craneway; or (c) inform the Developer of information obtained by the Agency during any inspection, except that the Agency shall inform the Developer of any information it obtains or discovers during inspection that could reasonably foreseeably affect rights or obligations of a party under this Agreement. The Developer shall not rely upon the Agency for any supervision or inspection. The rights granted to the Agency pursuant to tllis Section are in addition to any rights of entry and inspection the City may have in exercising its municipal regulatory authority.

6.8 Equal Opportunitv. During the construction of the Project there shall be no discrinllnation on the basis of race, color, creed, religion, sex, sexual orientation, marital status, ancestry or national origin in the hlling, firing, promoting or demoting of any person engaged in the construction work. The Developer and its construction contractors, employees and agents shall comply with all applicable federal laws and state laws, including all equal opportrnlity and fair employment laws and regulations applicable to the Property and Craneway and the Project in the event the Agency finances certain aspects of the Project. Moreover, tl1e Developer, by and through its construction contractor(s), shall give preference, to the extent practicable, for employment to those individuals residing within the geographical area governed by the Redevelopment Plan, as provided by relevant State law.

6.9 Prevailing Wages. If and to the extent applicable to fue Project, the Developer shall and shall cause the contractor and subcontractors to pay prevailing wages in the construction of the Project as those wages are determined pursuant to the federal Davis-Bacon Act and implementing rules and regulations, and Labor Code Sections 1720 et g:g. and implementing regulations of the Departulent oflndustrial Relations, and comply with the other applicable provisions of Labor Code Sections 1720 et seq. and implementing regulations of the Department oflndustrial Relations, and City of Richmond employment requirements including but not linlited to the City's Living Wage Ordinance (Richmond Municipal Code Chapter 2.60), the City's Business Opportunity Ordinance (Richmond Municipal Code Chapter 2.50), and the City's Local Employment Program Ordinance (Richmond Municipal Code Chapter 2.56). The Developer shall and shall canse the contractor and subcontractors to keep and retain such records as are necessary to determine if such prevailing wages have been paid as required pursuant to Labor Code Sections 1720 et seg. and the Davis-Bacon Act and implementing rules and regulations. Copies of the currently applicable current per diem prevailing wages are available from the City of Richmond Public Works Departu1ent, Richmond, California. During the construction of the Project, Developer shall or shall cause the contractor to post at the Property and Craneway the applicable prevailing rates of per diem wages. Developer shall indenulify, hold harmless and defend (with counsel reasonably acceptable to the Agency) the Agency and the City against any claim for claims, losses, liabilities, damages (direct or consequential), compensation, fines, penalties, causes of action, administrative and judicial proceedings and orders, judgments, remedial action or requirements, enforcement actions of any kind, and all costs and expenses incurred therewith (including but not limited to attorneys' fees and costs) or other amounts arising out of the failure or alleged failure of any person or entity (including Developer, its contractor and subcontractors) to pay prevailing wages as 7331171172718.6 Page29 913
determined pursuant to Labor Code Section 1720 et ~- and implementing regulation or comply with the other applicable provisions of Labor Code Sections 1720 et seg. and implementing regulations of the Department of Industrial Relations in connection with construction of the Project or any other work undertaken or in connection with the Property and Craneway.

6.10 Compliance with Applicable Law. The Developer shall cause all work performed in connection with construction of the Project to be perfonned in compliance with (a) all applicable laws, ordinances, rules and regulations of federal, state, county or municipal governments or agencies now in force or that may be enacted hereafter, including but not limited to historic preservation requirements of SHPO, (b) all directions, rules and regulations of any fire marshal, health officer, building inspector, or other officer of every governn1ental agency now having or hereafter acquiring jurisdiction, and (c) the continuing requirements ofFEMA and/or HUD applicable to the use of the HUD Funds and the funding of the Refit Work. The work shall proceed only after procurement of each pemlit, license, or other authorization that may be required by any governmental agency having jurisdiction, and the Developer shall be responsible to the Agency for the procurement and maintenance thereof, as may be required of the Developer and all entities engaged in work on the Property and Craneway.

6.11 Certificates of Completion.
(a) Promptly after completion of the Project, in accordance with those provisions of this Agreement relating solely to the obligations of the Developer to construct the Project (including the dates for beginning and completing construction of the Project), the Agency will provide an instrument so certifying ("Certificate of Completion"). This certification shall constitute a conclusive determination that the covenants in this Agreement with respect to the obligations of the Developer, its successors and assigns, to construct the Project (including the dates for the beginning and completing construction of the Project) have been met.
(b) The certification shall be in such form as will enable it to be recorded among the official records of Contra Costa County. Tllis certification and determination shall not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of a deed of trust securing money loaned to finance the Project or any part thereof and shall not be deemed a notice of completion under the California Civil Code. (c) If requested by Developer, a separate Certificate of Completion for the residential live-work portion of the Project shall be issued separately from the balance of the Project.

6.12 First Source Agreement. The Developer and its contractors shall enter into, and Developer shall require each of its connnercial tenants, vendors and agents to enter into, a First Source Agreement in the form attached as Exhibit J with RichmondW orks, an employment and training program of the City of Richmond.
733\17\172718.6 Page 30 914
ARTICLE 7. ON-GOING REQUIREMENTS

7.1 Applicability. The Developer agrees that upon the completion of the Project, the conditions set forth in this Article 7 shall apply and shall continue to apply after completion of the Project. These conditions shall be set forth in the Grant Deed.

7.2 Use and Maintenance.
(a) The Developer agrees to use the Property and Craneway for the purposes set forth in this Agreement and the Land Use Approvals and to maintain all portions of the Property and Craneway in good repair and in a neat, clean and orderly condition. (b) No use shall be permitted in the Project which is inconsistent with the operation of a high quality housing complex.

7.3 Mandatory Language in All Subsequent Deeds, Leases and Contracts. All deeds, leases or contracts entered into by Developer as to any portion of the Property and Craneway shall contain the following language:
(a) In Deeds: "Grantee herein covenants by and for itself, its successors and assigns that there shall be no discrimination against or segregation of a person or of a group of persons on account of race, color, religion, creed, sex, sexual orientation, marital status, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the property herein conveyed nor shall the grantee or any person claiming under or through the grantee 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, subtenants, sub lessees or vendees in the property herein conveyed.

The foregoing covenant shall run with the land."
(b) In Leases: "The lessee herein covenants by and for the lessee and lessee's heirs, personal representatives and assigns and all persons claiming under the lessee or through the lessee that this lease is made subject to the condition that there shall be no discrimination against or segregation of any person or of a group of persons on account of race, color, religion, creed, sex, sexual orientation, marital status, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the land herein leased nor shall the lessee or any person claiming under or through the lessee 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, subtenants, or vendees in the land herein leased." (c) In Contracts: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, creed, sex, sexual orientation, marital status, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the property nor shall the transferee or any person claiming under or through the transferee establish or permit any such practice or practices of discrimination or 733\17\17271 8.6 Page 31 915
segregation with reference to the selection, location, number, use or occupancy oftenants, lessees, subtenants, sub lessees, or vendees ofthe land."

7.4 Hazardous Materials
(a) Covenants.
(1) No Hazardous Materials Activities. Developer hereby represents and warrants to the Agency that, at all times from and after the Closing, Developer shall not cause or permit the Property and Craneway or any improvements thereon to be used as a site for the use, generation, manufacture, storage, treatment, release, discharge, disposal, transportation or presence of any Hazardous Materials except as may be incidental to the ordinary business and residential activities of occupants of the Project and is in compliance with all applicable Hazardous Materials Laws.
(2) Hazardous Materials Laws. Developer hereby represents and warrants to the Agency that, at all times from and after the Closing until Developer sells or otherwise disposes of the Project, Developer shall comply and cause the Property and Craneway and any improvements thereon to comply with all Hazardous Materials Laws, including without limitation, those relating to soil and groundwater conditions. (3) Notices. Developer hereby represents and warrants to the Agency that, at all times from and after the Closing, Developer shall immediately notify the Agency in writing of the following matters (except to the extent included in the Site Investigation Reports):
(i) the discovery of any Hazardous Materials on or under the Property and Craneway; (ii) any knowledge by Developer that the Property and Craneway does not comply with any Hazardous Materials Laws; (iii) any claims or actions pending or threatened against the Developer, the Property and Craneway or any improvements thereon by any governmental entity or agency or any other person or entity relating to Hazardous Materials or pursuant to any Hazardous Materials Laws (collectively "Hazardous Materials Claims"); and (iv) the discovery of any occurrence or condition on any real prope1iy adjoining or in the vicinity of the Property and Craneway that could cause the Property and Craneway or any part thereof to be designated as "border zone property" under the provisions of California Health and Safety Code sections 25220, et seq., or any regulation adopted in accordance therewith.
( 4) Remedial Action. In response to the presence of any Hazardous Materials on, under or about the Property and Craneway, Developer shall inunediately take, at Developer's sole expense, all remedial action required by any Hazardous Materials Laws or any judgment, consent decree, settlement or compromise with respect to any Hazardous Materials Claims.
(b) Inspection by Agency. Upon reasonable prior written notice to Developer, Agency, its employees and agents, may from time to time enter and inspect the Property and Craneway for the purpose of determining the existence, location, nature and magnitude of any past or present release or threatened release of any Hazardous Materials into, onto, beneath or from the Property and Craneway.
733\17\172718.6 Page32 916
(c) Legal Effect of Section. Developer and Agency agree that:
(1) This section 7.4 is intended as Agency's written request for information (and Developer's response) concerning the environmental condition of the Property as required by Califomia Code of Civil Procedure Section 726.5; and (2) Each representation and warranty in this section (together with any indemnity applicable to a breach of any such representation and warrant) with respect to the environmental condition of the Property is intended by Agency and Developer to be an "environmental provision" for purposes of California Code of Civil Procedure Section 736. (d) Environmental Indemnity. Without limiting the generality of the indemnity set forth elsewhere in this Agreement, Developer shall defend, indemnify, and hold the Agency, the City and their respective board members, council members, directors, officers, employees, agents, successors, and assigns free and harmless against any claims, loss, damage, costs, expense or liability they may incur directly or indirectly arising out of or attributable to the use, generation, storage, release, threatened release, discharge, or disposal by the Developer or its contractors, subcontractors, tenants, agents, and employees, of Hazardous Materials on, under, or about the Property and Craneway or the Project, including without limitation: (a) all foreseeable consequential damages; (2) the costs of any required or necessary repair, cleanup or detoxification of the Property and Craneway or the Project, and the preparation and implementation of any closure, remedial or other required plans; and (3) all reasonable costs and expenses incurred by the Agency in connection with clauses (1) and (2), including but not limited to reasonable attorney's fees. This obligation to indemnify and defend shall survive tetmination of this Agreement.

7. 5 Taxes and Assessments. The Developer shall pay when due, all real property taxes, possessory interest taxes, and assessments assessed and levied on the Property and Craneway and the Project, and shall remove any levy or attaclnnent made on the Property and Craneway or the Project other than the Pem1itted Exceptions.

7.6 Changes. The Developer shall promptly notify the Agency in writing of any changes in the location oftl1e principal place of business or material assets of the Developer, and of any other change in fact or circumstances represented or warranted at any time by fue Developer to the Agency.

7. 7 Mitigation Measures. During construction and operation of the Project, the Developer shall perform and observe the mitigation measures applicable to the Property and Craneway and the Project, if any, as set forth in the Land Use Approvals.

7.8 Sales and Use Tax Allocations.
(a) The Developer shall require that its contractors and subcontractors exercise their option to obtain a Board of Equalization sub-permit for the job site and allocate all eligible use tax payments to the City. Prior to beginning the construction of the Project, the Developer 733\171172718.6 Page 33 917
shall require that its contractor and subcontractors provide the City with either a copy of the sub permit or a statement that use tax does not apply to their portion of the job. (b) The Developer shall review the direct payment process established under California Revenue and Taxation Code 7051.3 and, if eligible, use the permit so that the local share of its use tax payments is allocated to the City. The Developer shall provide the City with either a copy of the direct payment permit or a statement certifYing ineligibility to qualify for the permit. The Developer shall further work with the Agency to inform all tenants and operators of facilities in the Project about the direct payment permit process and require their participation if qualified.

7.9 SLC Approved Uses for Craneway. The Developer shall operate the Craneway in accordance with SLC use restrictions and the San Francisco Bay Trail and public access easements recorded against the Property.

7.10 Visitor Center Lease. As stipulated in the federal legislation creating the Rosie the Riveter National Historical Park, a Visitor's Center to support the park will be located in the Building upon its rehabilitation and redevelopment. The Developer shall promptly enter into a lease with the NPS under which the NPS shall operate an approximately 10,000 square foot visitor's center in the Building for the Rosie the Riveter World War II!Home Front National Historical Park. The lease shall provide shell space rent free (excluding normal NNN expenses and tenant improvements) for a minimum of I 0,000 square feet of space, a significant portion of which must be located in the Craneway or immediately adjacent to the Craneway subject to approval of the NPS. The lease shall also be subject to the approval of the Agency, which approval shall not be unreasonably withheld. The lease shall include the First Source hiring provisions set forth in Section 6.12 above, iflegally permissible to do so under applicable federal statutes.

7.11 Leases. The Developer shall use its commercially reasonable diligent good faith efforts to enter into leases for the Project promptly following the commencement of construction of the Project. All such leases shall be on commercially reasonable terms, provisions, and conditions and shall include City of Richmond employment requirements including but not limited to the City's Living Wage Ordinance (Richmond Municipal Code Chapter 2.60), the City's Business Opportunity Ordinance (Richmond Municipal Code Chapter

2.50), and the City's Local Employment Program Ordinance (Richmond Municipal Code Chapter 2.56). The leases shall be subject to Agency review and approval which shall not be unreasonably withheld, and which shall be limited to review for compliance with the applicable City codes and First Source requirements. The Developer shall provide the Agency's Community and Economic Development Director or his designee with copies of all such fully executed leases or letters of intent to lease within thirty (30) days after execution of such lease or letter of intent. These documents shall be completely legible and shall not have any terms marked out. The Agency agrees to keep such documents as confidential documents that are not disclosed to anyone other than the Community and Economic Development Director or his designee, not as public records to the extent possible, and agrees to return all such documents to the Developer without reproduction within thirty (30) days after receipt of such documents. No 733\17\172718.6 Page34 918
such lease or letter of intent to lease may contain any tenn which is inconsistent with the provisions of this Agreement.

7.12 Entry by FEMA. The Developer shall permit FEMA, through its officers, agents, or employees, to enter the Property and Craneway at all reasonable times to inspect the Refit Work for compliance with applicable FEMA requirements.

7.13 North Parking Area Planning Process. The Developer agrees to develop the North Parking Area for parking and attendant uses. The Developer acknowledges that any future development of the North Parking Area for non-parking uses is subject to community and City planning discussion for its future development.

7.14 Cooperation on Feny Service. The Developer shall cooperate with the Agency and City in any efforts to petition the appropriate government agencies for the return of public ferry service to the Richmond ferry terminal adjacent to the Site.

ARTICLE 8. AGENCY PARTICIPATION

8.1 Agency Participation. The Agency shall be entitled to participate in the benefits of the Project in accordance with this Article 8. The following special definitions shall apply to this Article 8:
(a) "Adjusted Gross Revenues" for any period shall mean all fixed rent, base rent, percentage rent, concession fees, forfeited deposits, or other rental income from tenants and occupants of the Building or from rental interruption insurance, but excluding any receipts representing reimbursements of operating expenses and ownership costs such as taxes, insurance, utilities, maintenance, repairs, management fees or any other item of cost or expense paid directly by a tenant or passed through to and reimbursed by a tenant; minus the applicable TI Amortization for such period.
(b) "Cap Rate" shall mean the ten (1 0) year treasury rate on ten year (10) notes issued by the U.S. Treasury most recently prior to the date of calculation of the Sales Proceeds Assumed Reduction, plus one hundred fifty (150) basis points, not to exceed eight percent (8%).
(c) "Net Proceeds of Sale" shall mean the sales proceeds received by Developer on the sale of a condominium unit in the Project less closing costs and reasonable expenses.
(d) "Sales Proceeds Assumed Reduction" shall mean the rent being charged for any condominium unit being sold as of the date of closing of such sale (or, if such unit is not then being rented, the average annual rent charged by Developer for units in the Project similar to the unit being sold) divided by the Cap Rate.
733\171172718.6 Page35 919
(e) "TI Amortization" shall mean, for any period, the amount of amortization of Developer's TI Investment accruing during such period, assuming amortization of all TI Investments in monthly installments over a five (5) year period from the date of investment (or, if later, the date of completion of the Project) at an interest rate equal to the Cap Rate.
(f) "TI Investment" shall mean all hard and soft costs expended by Developer in connection with the improvement of the Building for leasing to tenants. In the initial development of the Project, a sum equal to $20.00 per square foot shall be deemed to be Developer's investment in the base Building improvements (as opposed to tenant improvements), and all expenditures above that amount shall be deemed to be TI Investment.

Thereafter, Developer's TI Investment each year shall consist only of tenant improvements constructed by Developer pursuant to a specific lease or work letter with a tenant or prospective tenant. Developer shall provide to the Agency detailed documentation of amounts expended for TI Investment promptly after completion of the respective tenant improvements.

8.2 Payment of Project Cash Flow Participation to the Agency. (a) From Project Adjusted Gross Revenue. The Developer shall pay to the Agency on or before March 31 of each year an amount calculated with respect to the preceding calendar year equal to ten percent (1 0%) of the excess, if any, of (a) Adjusted Gross Revenues for such year, over (b) the product of Twenty Four Dollars ($24.00) (the "Rent Threshold") multiplied by the average number of square feet of the Building occupied by tenants during such year. The Rent Threshold shall be adjusted upward (but not downward) as of January 1, 2009 and every f1fth year hereafter, in proportion to the increase in the Consumer Price Index All Urban Consumers (1982-1984 = 100) for the San Francisco-Oakland-San Jose Metropolitan Area as published by the U.S. Department of Labor, Bureau of Labor Statistics. (b) From the Proceeds of Sale of Condominiums. On or before March 31 of each year, the Agency shall receive ten percent (10%) of the excess, if any, of the Net Proceeds of Sale of a condominium unit in the Project that was sold during the preceding calendar year, less the Sales Proceeds Assumed Reduction. Upon any such sale, the square footage ofthe unit sold shall no longer be deemed occupied by tenants for purposes of subsection 8.2(a) above.

8.3 Books and Records. Developer shall keep and maintain at Developer's offices, full, complete and appropriate books, records and accounts relating to the Project, including all such books, records and accounts relating to the Project, including all such books, records and accounts necessary or prudent to evidence and substantiate in full detail Developer's calculation of Adjusted Gross Revenues, Net Proceeds of Sale, and the participation payments. Books, records and accounts relating to the Project shall be kept and maintained consistent with customary and reasonable commercial practice, and shall be consistent with the requirements of this Agreement. Any such books, records and accounts as are relevant and material to the calculations required under Section 8.2 above shall be open to and available for inspection by 733\17\172718.6 Page36 920
Agency, its auditors or other authorized representatives at reasonable intervals during normal business hours upon 48 hours notice. Copies of all sales, excise tax reports and other reports that Developer may be required to furnish any governmental agency (excluding internal revenue tax returns and state franchise tax returns) shall be open for inspection by Agency at the place that the books, records and accounts of Developer are at the place that the books, records and accounts of Developer are kept during normal business hours upon 48 hours notice. Developer shall preserve records on which any statement of Adjusted Gross Revenues and/or Net Proceeds of Sale is based for a period of not less than five (5) years after such statement is rendered, and for any period during which there is an audit undertaken pursuant to subsection (e) then pending.

8.4 Agency Audits. The payment by Developer or acceptance by Agency of any participation payment as called for in Section 8.2 shall not bind Agency as to the correctness of such statement or such payment. Within five (5) years after the receipt of any such statement, Agency or any designated agent or employee of Agency shall be entitled to audit all books, records and accounts pertaining to the Adjusted Gross Revenues, Net Proceeds of Sale and participation payments. Such audit shall be conducted during nmmal business hours upon forty-eight (48) hours notice at the principal place of business of Developer and other places where records are kept. Any audit undertaken under this Section 8.4 shall be completed within sixty (60) days of the connnencement thereof, subject to extensions of time for any periods of delay by any Third Party due to no fault of Agency or its auditors, and in no event later than five (5) years after Agency's receipt of the statement or statements being audited. Agency shall not be entitled to more than one audit for any particular calendar year, unless it shall appear from a subsequent audit that fraud or conceahnent may have occurred with respect to a previously audited year. If it shall be determined as a result of such audit that there has been a deficiency, it shall become immediately due and payable with interest at the then applicable Local Agency Investment Fund interest rate, determined as of and accruing from the date that said payment should have been made. In addition, if Developer's statement for any calendar year shall be found to have understated Adjusted Gross Revenues or Net Proceeds of Sale by more than five percent (5%) and Agency is entitled to any additional participation payments as a result of said understatement, then Developer shall pay, in addition to the interest charges referenced hereinabove, all of Agency's reasonable costs and expenses co1111ected with any audit or review of Developer's accounts and records. All such payments shall be paid within ten (10) days of receipt of written notice to Developer of such underpayment.

8.5 Agency Note and Agency Deed of Trust. The payments due under Section 8.2 will be evidenced by the Agency Note and secured by the Agency Deed of Trust against the Property and Project or such other security as is reasonably acceptable to the Agency. The Agency's security interests under the Agency Deed of Trust shall at all times be and remain subject and subordinate to Approved Security Interests for financing the acquisition and/or construction ofthe Project and any modifications, renewals, increases and refinancings thereof (the "Senior Liens"), and the Agency shall execute such subordination agreements and other documents containing such provisions usual and customary in transactions of this type in order to subordinate the Agency Deed of Trust security interests held by the Agency to the Senior Liens and the indebtedness secured thereby. The Agency shall be obligated to subordinate the Agency Deed of Trust only if the aggregate amount of indebtedness secured by the Senior Liens 733117\172718.6 Page 37 921
together with that secured by the Agency Deed of Trust and Section 108 Loan Deed of Trust does not exceed eighty percent (80%) of the appraised value of the Property.

8.6 Approval of Financing. The Developer shall not place any encumbrances on the Development other than Approved Security Interests, without prior written consent of the Agency.

ARTICLE 9. CHANGES IN DEVELOPER

9.1 Changes Only Pursuant to this Agreement. The qualifications, experience and expertise of the Developer is of particular concern to the Agency. It is because of the qualifications, experience and expertise of this entity that the Agency has entered into this Agreement. No voluntary or involuntary successor in interest to the Developer shall acquire any rights or powers under this Agreement, except as provided in this Article 9.

9.2 Prohibition Against Transfer of Property and Craneway and Assignment of Agreement
(a) Developer shall not, except as permitted by this Agreement, make or attempt any total or partial sale, transfer, conveyance, assigrrment or lease, of all or part of the Property and Craneway, the buildings or structures on the Property and Craneway or the rights and obligations under this Agreement without the prior written approval of the Agency until the date when all the following have occurred: (1) the Agency has recorded a Certificate of Completion for the Project pursuant to Section 6.11 of this Agreement; and (2) the proposed transferee has affirmatively agreed in writing to be bound by the provisions of Article 7 of this Agreement.
(b) The Agency will approve such a transfer of the Property and Craneway or an assignment ofthis Agreement prior to the occurrence ofthe events listed in (a) above only if the following conditions are met and upon the Agency's exercise of its reasonable discretion:
(1) The proposed transferee demonstrates to the Agency that, in the Agency's reasonable judgment, the proposed transferee has sufficient financial strength and experience to competently complete construction of the Project and/or to competently manage the Project in a first-class manner and as required under this Agreement. (2) Any proposed transferee, by instrument in writing approved by the Agency and in a form recordable among the land records, for itself and its successors and assigns, and for the benefit of the Agency, shall expressly assume all the obligations of the Developer under this Agreement and agree to be subject to all the conditions and restrictions to which the Developer is subject with respect to the portion of the Property and Craneway so transferred. The transferee shall agree to be bound by any other applicable agreements, notes, deeds of trust, covenants, regulations, and property restrictions of the Agency and the City. The Developer shall submit to the Agency for review all documents proposed to effect any such transfer, and if approved by the Agency, its approval shall be indicated to the Developer in writing. 733117\172718.6 Page38 922
(c) The prohibitions in subsections (a) and (b) ofthis Section shall not be deemed to prevent the granting of temporary easements or permits to facilitate the development of the Property or the leasing or pre-leasing of tenant space for occupancy prior to the recordation of the Certificate of Completion for the Project pursuant to Section 6.11 of this Agreement. (d) In the absence of specific written agreement by the Agency, no transfer, assignment, sale or approval by the Agency pennitted by this'Article 9 shall be deemed to relieve the Developer or any other party from any obligations under this Agreement. (e) In the event that, in violation of this Agreement, the Developer does sell, transfer, convey, lease or assign this Agreement or all or any part of the Property and Craneway or the buildings, structures or other improvements on the Property and Craneway prior to the recordation ofthe Certificate of Completion for the Project, the Agency shall be entitled to increase the purchase price paid by the Developer for the Property and Craneway previously conveyed from the Agency to the Developer by the amount that the consideration payable for such assigtm1ent or transfer is in excess of the sum of (a) the Purchase price paid by the Developer to the Agency for the Property and Craneway and (b) the costs of subsequent improvements and development, including carrying charges, interest and fees, transfer taxes, real estate taxes, assessments and commissions, escrow fees, and cost related to the assignment or trailS fer. The consideration payable for such assignment or transfer to the extent it is in excess of the amount so authorized, shall belong and be paid to the Agency by the Developer and until so paid, the Agency shall have a lien on such Prope1ty and Craneway in questions and any part involved for such amount.
(f) The provisions ofthis Section 9.2 have been agreed upon so as to discourage land speculation by Developer; accordingly these provisions shall be given a liberal interpretation to accomplish that end. Following recordation of the Certificate of Completion, the provisions of this Section 9.2 shall have not further force and effect.

9.3 Prohibition on Tral1Sfer of Ownership Interests. As of the effective date of this Agreement, the Developer represents and warrants to the Agency that J.R. Orton Ill is the majority shareholder of the Developer. Until the date when all of the following have occurred: (1) the Agency has recorded the Certificate of Completion of the Project pursuant to Section 6.11; (2) any proposed transferee of the Property and Craneway has affirmatively agreed in writing to be bound by the provisions of Article 7 of this Agreement; and (3) the Developer has paid any remaining portion of the purchase price for the Property and Craneway, or has entered into separate agreements with the Agency, acceptable to the Agency, in its sole and absolute discretion, which so provide, J.R. Orton Ill shall continue to be the majmity shar·eholder of the Developer.

9.4 Permitted Transfers. Notwithstanding the foregoing provisions of this Article 9, the following transfers of this Agreement or of the Property or ar1y interest therein or of any ownership interests in Developer shall be permitted (subject to satisfaction of the conditions of Section 9.2(b)(2)):
733\17\172718.6 Page39 923
(a) Any transfer pursuant to an Approved Security Interest (including any refinancing or refunding thereof) provided that such Security Interest meets the requirements of Article 10.
(b) Any transfer directly resulting from the foreclosure of a Security Financing Interest or the granting of a deed in lieu of foreclosure of a Security Financing Interest provided that such Security Interest meets the requirements of Article 10. (c) Any other transfer approved by the Agency in the Agency's sole discretion. The Agency shall grant or deny approval of a proposed transfer under this subsection (c) within thirty (30) days of receipt by the Agency of the Developer's request for approval of a transfer, which request shall include evidence of the proposed transferee's business expertise and financial capacity.
(d) Any transfer resulting directly from the death of an individuaL (e) Any transfer by an individual of its ownership interest in the Developer to a trust for the benefit of the transferor and/or the transferor's family members, as long as the transferor is the trustee of such trust.
(f) Any transfer of ownership interests in the Developer among the members or shareholders of the Developer as of the date hereof so long as the transferor retains the same amount of control over the decision making in the Developer as previous to the transfer. (g) The admission of a new member of the Developer for the purpose of facilitating the raising of equity capital for the Development so long as the management and control ofthe Developer does not change.
(h) a one-time transfer by the Developer of its interest in the Property to a limited liability company or limited partnership of which the Developer is the manager or managing general partner, subject to the Agency's review and approval of the limited liability company's or limited partnership's operating agreement, which approval will not be unreasonably withheld or delayed and which shall be deemed approved if no specific and reasonable written objection is delivered to the Developer within thirty (30) days after the Developer has provided the Agency a draft of the limited liability company's or limited partnership's operating agreement. The Developer agrees after submittal of the draft of the limited liability company's or limited partnership's operating agreement to the Agency, to keep the Agency apprised of any modifications to the operating agreements and provide the Agency updated versions of the agreement during its thirty (30) day review period. 733\17\172718.6 Page40 924
ARTICLE 10. SECURITY FINANCING AND RIGHTS OF HOLDERS

10.1 No Encumbrances Except for Development Purposes Prior to Completion. (a) Notwithstanding any other provision of this Agreement, mortgages and deeds of trusts, or any other reasonable method of security ("Approved Security Interest"), are permitted to be placed on the Property and Craneway before a Certificate of Completion has been issued by the Agency the Project, but only for the purpose of securing loans, if any, of funds set forth in the approved Financing Plan to be used for financing the acquisition of the Property, the design and construction of the Project and any other expenditures necessary and appropriate to develop the Property and Craneway uoder this Agreement. (b) Prior to the commencement of any construction of the Project, the Developer shall promptly notify the Agency of any mortgage, deed of trust, sale and lease-back or other financing, conveyance, encumbrance or lien that has been or will be created or attached to the Property and Craneway and provide the Agency with copies of the documentation for such financing. The words "mortgage" and "deed of trust" as used herein include all other appropriate modes of financing real estate acquisition, construction and land development.

10.2 Holder Not Obligated to Construct. The holder of any Approved Security Interest authorized by this Agreement or the successors or assigns of such holder is not obligated to construct or complete the Project or to guarantee such construction or completion; nor shall any covenant or any other provision in conveyance from the Agency to the Developer evidencing the realty comprising the Property and Craneway or any part thereof be construed so to obligate such holder. Nothing in this Agreement shall be deemed to construe, pe1mit or authorize any such holder or its successors or assigns to devote the Property and Craneway or any portion thereof to any uses, or to construct any improvements thereon, other than those uses and improvements authorized by this Agreement.

10.3 Notice of Default and Right to Cure.
(a) Wherever the Agency pursuant to its rights set forth in Article Nine of this Agreement delivers any notice or demand to the Developer with respect to the commencement, completion, or cessation of the construction of the Project, the Agency shall at the same time deliver to each holder of record of a Approved Security Interest authorized by this Agreement a copy of such notice or demand. Each such holder shall (insofar as the rights of the Agency are concemed) have the right, but not the obligation, at its option, within ninety (90) days after the receipt of the notice, to cure or remedy or commence to cure or remedy any such default or breach affecting the Property and Craneway, the notice or demand for which has been issued by the Agency subsequent to the recordation of the deed of trust of the Approved Security Interest held by such holder and to add the cost thereofto the debt and the lien of its Approved Security Interest.
7331171172718.6 Page 41 925
(b) Nothing contained in this Agreement shall be deemed to permit or authorize such holder to undertake or continue the construction or completion ofthe Project (beyond the extent necessary to conserve or protect such improvements or construction already made) without first having expressly assumed the Developer's obligations to the Agency relating to the Project by written agreement satisfactory to the Agency. The holder in that event must agree to complete, in the manner provided in this Agreement, the Project and submit evidence satisfactory to the Agency that it has the qualifications and financial responsibility necessary to perform such obligations. Any such holder properly completing the Project shall be entitled, upon written request made to the Agency, to a Certificate of Completion from the Agency.

10.4 Failure of Holder to Complete Project. In any case where, six (6) months after default by the Developer in completion of construction of the Project under this Agreement, the holder of record of any Security Financing Interest, having first exercised its option to construct, has not proceeded diligently with construction, the Agency shall be afforded the rights against such holder it would otherwise have against the Developer under this Agreement, but only to the extent the events giving rise to such rights occmTed subsequent to the holder assmning control of the Property (unless otherwise provided in the agreement between the Agency and the holder).

10.5 Right of Agency to Cure. In the event that (a) the Developer has committed a breach or default under a Approved Security Interest prior to the completion of the Project, and (b) the holder has not exercised its option to complete the development called for on the Property and Craneway, then the Agency may cure the default prior to the completion of any foreclosure.

In such event the Agency shall be entitled to reimbursement from the Developer of all costs and expenses incurred by the Agency in curing the default. The Agency shall also be entitled to a lien upon the Property and Craneway or any portion thereof to the extent of snch costs and disbursements. Any such lien shall be subject to any Approved Security Interest executed for the sole purpose of obtaining funds to purchase and develop the Property and Craneway as authorized in this Agreement.

10.6 ·Right of Agency to Satisfy Other Liens. After the Closing and prior to the recordation of a Certificate of Completion for the Project pursuant to Section 6.11 and after the Developer has had a reasonable time to challenge, cure or satisfy any liens or encumbrances on the Property and Craneway or any portion thereof, the Agency shall have the right but not the obligation to satisfy any such lien or encumbrance; provided, however, that nothing in this Agreement shall require the Developer to pay or make provision for the payment of any tax, assessment, lien or charge so long as (a) the Developer in good faith shall contest the validity or amount thereof, (b) such delay in payment shall not subject the Property and Craneway or any portion thereof to forfeiture or sale, and (c) the Developer shall, prior to the date such tax, assessment, lien or charge is due and payable, have given such reasonable security as may be required by the Agency from time to time in order to ensure payment of such taxes, assessments, lien or charge to prevent any sale, foreclosure or forfeiture of the Property and Craneway or the improvements thereon, or any part thereof, by reason of such nonpayment.

10.7 Holder to be Notified. The Developer, for itself, its successors and assigns hereby warrants and agrees that each term contained herein dealing with Approved Security Interest and rights of holders of Approved Security Interests shall be either inserted into the relevant Approved 7331171172718.6 Page42 926
Security Interest or acknowledged by the holder prior to its coming into any security right or interest in the Property and Craneway.

10.8 Modifications. If a holder of a Security Financing Interest should, as a condition of providing financing for development of all or a portion of the Development, request any modification ofthis Agreement in order to protect its interests in the Development or this Agreement, the Agency shall consider such request in good faith consistent with the purpose and intent of this Agreement and the rights and obligations of the parties under this Agreement.

ARTICLE 11. GENERAL REMEDIES DURING

DEVELOPMENT

11.1 Application of Remedies. Before issuance of a Certificate of Completion for the Project, the provisions of this Article shall govern the parties' remedies for breach or failure of the Agreement.

11.2 No Fault of Parties. The following events constitute a basis for a party, othetwise allowed by this Agreement, to temtinate this Agreement without the fault of the other:
(a) Either party disapproves the Site Investigation Reports and/or the environmental conditions of the Property and Craneway in the time and manner provided in Section 2.6; or
(b) The Developer, despite good faith efforts, is unable to obtain any Building Permits or Land Use Approvals necessary to allow construction of the Project substantially in accordance with the Agency approved Final Construction Plans; or (c) The Developer, despite good faith efforts on the part of both the Agency and Developer, is unable to obtain Agency approval of Developer's submitted Preliminary Site Plan, Design Development Documents and/or material changes thereto, Final Construction Plans, Financing Plan, or evidence of financing prior to Closing; or (d) The Agency, despite diligent good faith efforts, is unable to meet any condition set forth in Article 3 within the time and in the manner specified therein; (e) The parties, despite good faith efforts on the part of both the Agency and the Developer are unable to reach agreement on the redesign of the Project necessitated by life safety concerns in the ninety (90) day period set forth in Section 2.4( e) Upon happening of any of the above-described events, and at the election of either party, this Agreement may be terminated by five (5) days' written notice to the other party. Upon the effective date of the notice oftemtination neither pruty shall have any rights against or liability to the other (except for the provisions that state they smvive termination of this Agreement) and the Agency shall return to the Developer the Deposit as described in Section 2.5. 733\171172718.6 Page 43 927

11.3 Fault of Agency. Except as to events constituting a basis for termination under Section 11.2 and subject to Section 12.4, the following events each constitute a basis for the Developer to take action against the Agency:
(a) The Agency fails to convey the Property within the time, manner and form herein called for and the Developer is otherwise entitled by this Agreement to such conveyance; or (b) The Agency fails to give the Developer timely approval or disapproval of the Preliminary Site Plan, the Design Development Documents, and the Financing Plan as called for in Sections 2.4, 2.7, and 2.10, respectively; or
(c) The Agency does not attempt diligently and in good faith to cause satisfaction of the conditions set forth in Article 3.
(d) The Agency breaches any other material provision of this Agreement.

Upon the happening of any of the above-described events, the Developer shall first notify the Agency in writing of its purported breach or failure, giving the Agency thirty (30) days after receipt of such notice to cure such breach or failure. In the event the Agency does not then cure the default within such thirty-day period (or, if the default is not susceptible of cure within such thirty-day period, the Agency fails to commence the cure within such period and thereafter to prosecute the cure diligently to completion), then the Developer shall be entitled to any rights afforded it in law or in equity and the Agency shall retnm to the Developer the Deposit as described in Section 2.5.

11.4 Fault of Developer. Except as to events constituting a basis for termination under Section 11.2 and subject to Section 12.4, the following events each constitute a basis for the Agency to take action against the Developer:
(a) The Developer does not attempt diligently and in good faith to cause satisfaction of all conditions set forth in Article 2 and its obligations as set forth in Article 4; or (b) The Developer refuses for any reason (including, but not limited to, lack of funds) to accept conveyance from the Agency of the Property and lease of the Craneway from the City or to provide funds to the Agency within the time periods and under terms called for in this Agreement; or
(c) The Developer does not attempt in good faith to procure in a timely manner the Building Permit(s) or Land Use Approvals of the Project or abandons any further attempts when there is a reasonable likelihood that such permit or approval would otherwise be issued by the proper authority in a timely manner; or
(d) The Developer fails to commence or complete construction of the Project within the time limits set forth in this Agreement and in the ma:tmer set forth in Article 6; or 733\17\172718.6 Page44 928
(e) The Developer abandons or suspends construction of the Project for a period of thirty (30) days after written notice by the Agency of such abandonment or suspension; or
(f) The Developer voluntarily or involuntarily makes a Transfer except as permitted by this Agreement; or
(g) There is any change in the ownership of the Developer, or the parties in control of the Developer or any assigns or successors in violation of this Agreement; or (h) A Bankruptcy/Insolvency Event occurs with respect to the Developer; or (i) The Developer authorizes recordation of a lien of a non-Approved Security Interest against the Property and Craneway or the Project prior to the recordation of a Certificate of Completion; or
(j) The Developer materially defaults under an Approved Security Interest or under the terms of an approved loan document prior to the issuance of a Certificate of Completion for the entire Project, and such default is not cured by the Developer within the time provided for such cure under the applicable loan documents; or
(k) The Developer materially defaults under any provision of the Craneway lease with the City; or
(I) The Developer breaches any provision of Article 5; or (m) The Developer breaches any provision of Article 7; or (n) The Developer breaches any provision of Article 8; or ( o) The Developer breaches any provision of Article 9; or (p) The Developer breaches any other material provision of this Agreement; or ( q) The Developer fails to repay the principal and any interest on the Section 108 Loan, within ten (10) days of receipt of written notice from the Agency that such payment is due; or
(r) The Developer fails to repay the principal and any interest due under the Agency Note, within ten (1 0) days of receipt of written notice from the Agency that such payment is due.

Upon the happening of any of the events described above, the Agency shall first notify the Developer in writing of its purported breach, failure or act above-described, giving the Developer thirty (30) days from receipt of such notice to cure such breach, failure, or act. If the Developer does not cure the default within such thirty-day period (or if the default is not susceptible of being 7331171172718.6 Page45 929
cured within such thirty-day period, the Developer fails to conunence the cure within such period and thereafter to prosecute the cure diligently to completion), or within the time set forth in Sections 11.4(q) and 11.4(r) with respect to the events described in Sections 11.4(q) and 11.4(r) respectively, then the event constitutes an "Event of Default" and the Agency shall be afforded all of its rights at law or in equity by taking any or all of the following remedies: (i) terminate this Agreement in writing; (ii) prosecute an action for damages against the Developer; (iii) seek specific performance of this Agreement against the Developer; (iv) exercise the rights and remedies specified in Sections ll.5, 11.6, 11.7 and/or 11.8; or (v) seek any remedy against the Developer available at law or in equity in addition to retaining the Deposit as described in Section

2.5. 11.5 Right of Reverter.
(a) If this Agreement is terminated pursuant to Section 11.4 following the Closing and prior to the issuance of the Certificates of Completion of the Project, then the Agency may, in addition to other rights granted in this Agreement, re-enter and take possession of the Property or any portion thereof with all improvements thereon, and revest in the Agency the estate theretofore conveyed to the Developer. The interest created pursuant to this Section 1 1.5 shall be a "power of termination" as defmed in California Civil Code Section 885.010, and shall be separate and distinct from the Agency's option to purchase the Property under the same or similar conditions specified in Section 11.6.
(b) The rights granted in this Section 11.5 shall be subject to and be limited by and shall not defeat, render invalid, or limit:
(1) Any Approved Security Interest permitted by this Agreement. (2) Any rights or interests provided in this Agreement for the protection of the holder of such Approved Security Interests. (c) The Grant Deed from the Agency to the Developer shall contain appropriate reference and provision to give effect to the Agency's right of reverter as set forth in this Section 11.5.
(d) Upon re-vesting in the Agency oftitle to the Property or any portion thereof as provided in this Section 11.5, the Agency shall, pursuant to its responsibilities under State law, use its best efforts to resell the Property or applicable portion thereof and as soon as possible, in a conunercially reasonable marmer and consistent with the objectives of such law and of the Redevelopment Plan to a qualified and responsible party or parties (as determined by the Agency) who will assume the obligation of making or completing the Project in accordance with the uses specified for such property in the Redevelopment Plan and in a manner satisfactory to the Agency. Upon such resale of the Property or any portion thereof the proceeds thereof shall be applied as follows:
(i) First to reimburse the Agency on its own behalf or on behalf of the City for all costs and expenses incurred by the Agency, including but not limited 733\17\172718.6 Page46 930
to salaries of personnel and legal fees incurred in connection with the recapture, management, and resale of the Property or any portion thereof and (but less any income derived by the Agency from any part of the Property in com1ection with such management); all taxes, installments of assessments payable prior to resale, and applicable water and sewer charges with respect to the Property or any portion thereof (or, in the event the Property or any portion thereof is exempt from taxation or assessment or such charges during the period of ownership by the Agency, an amount equal to the taxes, assessments, or charges that would have been payable if the Property or any portion thereof was not so exempt); any payments made or necessarily to be made to discharge any encumbrances or liens existing on the Property or any portion thereof at the time of re-vesting of title in the Agency or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults, or acts of the Developer, its successors or transferees; and expenditures made or obligations incurred with respect to the making or completion of the Project or any part thereof on the Property; and, any amounts otherwise owing the Agency by the Developer and its successors or transferee.
(ii) Second, to reimburse the Agency for damages to which it is entitled under this Agreement by reason of the Developer's default. (iii) Third, to reimburse the Developer, its successor or transferee, up to the amount equal to:

1. The payment made to the Agency
for the Property or applicable portion thereof pursuant to Section 4.3; plus

2. The fair market value of the
improvements the Developer has placed on the Prope1ty or applicable portion thereof; less

3. Any gains or income withdrawn or
made by the Developer from the Property or applicable portion thereof, or the improvements thereon.
(e) Notwithstanding the foregoing, the amount calculated pursuant to subsection (d) shall not exceed the fair market value of the Property or applicable portion thereof, together with the improvements thereon as of the date of the default or failure which gave rise to the Agency's exercise of the right of reverter.
(f) Any balance remaining after such reimbursements shall be retained by the Agency as its property.

The rights established in tllis Section 11.5 are to be interpreted in light of the fact that the Agency will convey the Property to the Developer for development and not for speculation. 733\171172718.6 Page 47 931

11.6 Option to Repurchase, Reenter and Repossess.
(a) The Agency shall have the additional right at its option to repurchase, reenter and take possession of the Property or any portion thereof owned by the Developer with all improvements thereon, if after conveyance of title to any portion of the Property and prior to the issuance of all the Certificates of Completion of the Project, there is an Event of Default pursuant to Section 11.4.
(b) 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 Interest permitted by this Agreement; or (2) Any rights or interest provided in this Agreement for the protection of the holder of such Approved Secmity Interests.
(c) To exercise its right to repm·chase, reenter and take possession with respect to the Property owned by the Developer, the Agency shall pay to the Developer in cash an amount equal to:
(1) The purchase price paid to the Agency for the applicable portion of the Property pursuant to Section 4.3; plus
(2) The fair market value ofthe improvements existing on the applicable portion of the Property at the time of the repmchase, reentry and repossession; less (3) Any gains or income withdrawn or made by the Developer from the applicable portion of the Property or the improvements thereon; less (4) The value of any unpaid liens or encumbrances on the applicable portion of the Property which the Agency assumes or takes subject to said encumbrances.

11.7 Plans, Data and Approvals. If this Agreement is terminated pursuant to Section

11.2 or Section 11.4, then the Developer shall promptly assign and deliver to the Agency, copies of all plans, studies, reports, data and specifications for the Project, all pennits and approvals obtained in connection with the Project, and all applications for pennits and approvals not yet obtained but needed in connection with the Project (collectively, the "Planning Documents") upon receipt of payment from the Agency for the Planning Docmnents, which payment shall equal the amount the Developer paid for such Planning Documents as established by third-party invoices.

The Agency or any other person or entity designated by the Agency shall be free to use such Planning Documents, including Planning Documents previously delivered to the Agency, for any reason whatsoever, without cost to the Agency. However, if the Planning Documents are used by the Agency or an entity designated by the Agency, neither the Developer nor its consultants shall be liable to the Agency or designated entity because of this use. 733\17\172718.6 Page48 932

11.8 Acceleration of Agency Note; Section 108 Note. With respect to a Developer Event of Default described in Section 11.4, the Agency shall have the right to cause all indebtedness of the Developer to the Agency under this Agreement, the Agency Note and/or the Section 108 Note, together with any accrued interest thereon, to become inunediately due and payable. The Developer waives all right to presentment, demand, protest or notice of protest or dishonor. The Agency may proceed to enforce payment of the indebtedness and with respect to the Agency Note and Section 108 Note, to exercise any or all rights afforded to the Agency as a creditor and secnred party under the law including the Uniform Commercial Code, including foreclosure under the Agency Deed of Trust and/or Section 108 Loan Deed of Trust. The Developer shall be liable to pay the Agency on demand all reasonable expenses, costs and fees (including, without limitation, reasonable attorney's fees and expenses) paid or incuned by the Agency in connection with the collection of the amounts due under the Section 108 Loan Note and/or the Agency Note and the preservation, maintenance, protection, sale, or other disposition of the security given under the Agency Deed of Trust and/or the Section 108 Deed of Trust.

11.9 Survival. Upon tennination of this Agreement under Article 11, the following provisions of this Agreement shall survive: the Developer's waiver of any right to reimbursement or indemnification from the Agency in Section 4.5; and, the indemnification obligations in Sections 4.7, 6.9, 7.4(d) and 12.8. This Section 11.9 exists for reference purposes only and does not alter the scope or natnre ofthe surviving provisions.

11.10 Rights and Remedies Cumulative. Except as otherwise provided, the rights and remedies of the parties are cumulative, and the exercise or failure to exercise any right or remedy shall not preclude the exercise, at the same time or different times, of any right or remedy for the same default or any other default by the other party.

ARTICLE 12. GENERAL PROVISIONS

12.1 Notice, Demands and Communication. Formal notices, demands, and communications between the Agency and the Developer shall be in writing and shall be sufficiently given if and shall not be deemed given unless dispatched by registered or certified maillretnrn receipt, or delivered personally, to the principal offices of the Agency and the Developer as follows:

Agency:

With copies to:
7331171172718.6
Redevelopment Agency of the City of Richmond
1401 Marina Way South
Richmond, CA 94804
Attn: Community and Economic Development Director
City Attorney's Office
1401 Marina Way South
Richmond, CA 94804
Attn: City Attorney
Page49 933
Developer:

With copies to:

Orton Development, Inc.
3049 Research Drive
Richmond, CA 94806
Attn: J.R. Orton ill
Stein & Lubin LLP
600 Montgomery Street, 14th Floor
San Francisco, CA 94111
Attn: Mark Lubin, Esq.

Such written notices, demands and communications may be sent in the same manner to such other addresses as the affected party may from time to time designate by mail as provided in this Section 12.1. No party shall evade or refuse delivery of any notice.

12.2 Conflict of Interests. No member, official or employee of the Agency shall make any decision relating to the Agreement which affects his or her personal interests or the interest of any corporation, partnership or association in which he is directly or indirectly interested.

12.3 Non-Liabilitv of Officials, Employees and Agents. No member, official, employee or agent of the Agency or the City shall be personally liable to the Developer, or any successor in interest, in the event of any default or breach by the Agency or for any amount which may become due to the Developer or successor or on any obligation under the terms of this Agreement.

12.4 Enforced Delay. In addition to specific provisions ofthis Agreement, performance by either party shall not be deemed to be in default where delays or defaults are due to war; acts of terrorism; insurrection; strikes; lock-outs; riots; floods; earthquakes; fires; quarantine restrictions; freight embargoes; energy shortages or rationing; lack of transportation; or court order; or any other similar causes (other than lack of funds of the Developer or the Developer's inability to finance the acquisition of the Property or any portion thereof or construction of the Project) beyond the control or without the fault of the party claiming an extension of time to perform. An extension oftime for any cause will be deemed granted if notice by the party claiming such extension is sent to the other within ten (10) days from the commencement of the cause and such extension of time is not rejected in writing by the other party within ten (1 0) days of receipt of the notice. Times of performance under this Agreement may also be extended by written agreement of the Agency and the Developer. If the Developer encounters unexpected circumstances beyond the reasonable control of the Developer, including but not limited to the inability of the Developer to obtain Land Use Approvals or a Building Permit after diligently proceeding to obtain the Land Use Approval or Building Permit, the Developer may request that the Agency meet and confer in good faith with the Developer to determine whether the Developer's time of performance should be extended beyond the time periods provided in this Section 12.4.

12.5 Inspection of Books and Records. The Agency and its agents have the right at all reasonable times to inspect on a confidential basis the books, records and all other documentation of the Developer pertaining to its obligations under this Agreement. The Developer also has the right at all reasonable times to inspect the books, records and all other documentation of the 7331171172718.6 Page 50 934
Agency pertaining to its obligations under this Agreement to the extent such items to be inspected are part of the public record. The Developer and the Agency shall retain such books, records and documentation for a period of five (5) years after the later of: a) their creation or b) issuance of the Certificate of Completion.

12.6 Provision Not Merged with Deeds. None of the provisions of this Agreement are intended to or shall be merged by the Grant Deed( s) transferring title to any real property the subject of this Agreement from the Agency to the Developer or any successor in interest and such Grant Deed(s) shall not be deemed to affect or impair the provisions and covenants of this Agreement.

12.7 Title of Parts and Sections. Any titles of the sections or subsections of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any part of its provision.

12.8 Indemnity. The Developer shall indemnifY, defend and hold the Agency, the City and their respective board members, council members, directors, officials, employees, agents, successors, and assigns harmless against all claims made against them, causes of action, administrative proceedings, arbitrations or enforcement actions which arise out of or in connection with the Developer's ownership, occupancy, or development of the Property and Craneway or construction on the Prope1ty and Craneway by the Developer or the Developer's contractors, subcontractors, agents, employees or tenants and all damages (direct or consequential), costs, losses, injuries, fines, penalties, liens, encumbrances, charges, liabilities, demands, judgments, remedial action requirements, obligations, and all costs and expenses incurred in connection therewith (including, but not limited to, attorney fees and costs); provided, however, that this indemnity shall not extend to any claim arising solely from the Agency's failure to perfonn its obligations under this Agreement or solely from the gross negligence or willful misconduct of the Agency, the City, or their respective board members, council members, directors, officials, employees, agents, successors, and assigriS.

12.9 Insurance. The Developer shall cause to have in full force and effect during tl!e construction ofthe Project pursuant to this Agreement all insurance policies as set forth in the attached Exhibit G.

12.10 Applicable Law. This Agreement shall be interpreted under and pursuant to the laws of the State of California.

12.11 Severability. If any term, provision, covenant or condition of this Agreement is held by a comt of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provision shall continue in full force and effect unless the rights and obligations ofthe parties have been materially altered or abridged by such invalidation, voiding or unenforceability.

12.12 Legal Actions.
(a) In the event any legal action is commenced to interpret or to enforce the terms of this Agreement or to collect damages as a result of any breach thereof, the party 7331171172718.6 Page 51 935
prevailing in any such action shall be entitled to recover against the party not prevailing all reasonable attorney fees and costs incurred in such action, including attorney fees and costs of any appeals.
(b) In the event legal action is commenced by a third party or parties, the effect of which is to directly or indirectly challenge or compromise the enforceability, validity, or legality of the Agreement and/or the power of the Agency to enter into this Agreement or perform its obligations hereunder, either the Agency or the Developer may (but shall have no obligation to) defend such action. Upon commencement of any such action, the Agency and the Developer shall meet in good faith and seek to establish a mutually acceptable method of defending such action.

12.13 Binding Upon Successors; Covenants to Run With Land. This Agreement shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest and assigns of each of the parties; provided, however, that there shall be no transfer of any interest by the Developer except pursuant to the terms of this Agreement. Any reference in this Agreement to a specifically named party shall be deemed to apply to any successor, heir, administrator, executor or assign of such party who has acquired an interest in compliance with the terms of this Agreement, or under law.

The terms of this Agreement shall run with the land and shall bind all successors in title to the Property and Craneway during the Term of this Agreement, except that the provisions of this Agreement that are specified to survive termination of this Agreement shall run with the land in perpetuity and remain in full force and effect following such termination. Every contract, deed, or other instrument hereafter executed covering or conveying the Property and Craneway or any portion thereof shall be held conclusively to have been executed, deliver, and accepted subject to such covenants and restrictions, regardless of whether such covenants or restricts are set forth in such contract, deed or other instrument, unless the Agency expressly releases the Property and Craneway or the applicable portion of the Property and Craneway from the requirements of this Agreement.

12.14 Discretion Retained by Citv. The Agency's execution of this Agreement does not constitute approval by the City and in no way limits the discretion of the City in the permit and approval process in counection with development of the Project

12.15 Recordation ofMemorandum of Agreement. The Developer consents to the recordation against the Property and Craneway of a memorandum of this Agreement in the records of the County Recorder of Contra Costa County.

12.16 Parties Not Co-Venturers. Nothing in tllis Agreement is intended to or does establish the parties as partners, co-venturers, or principal and agent with one another.

12.17 Employment Opportunity. The Developer and its successors, assigns, contractors and subcontractors shall not discriminate against any employee or applicant for employment in connection with the construction and operation of the Project because of race, color, religion, sex, sexual preference, marital status, ancestry or national origin. Each of the following activities shall be conducted in a nondiscriminatory manner: hiring; upgrading; demotion and transfers; 733\17\172718.6 Page 52 936
recruitment and recruitment advertising; layoff and termination; rate of pay and other forms of compensation; and selection for training including apprenticeship.

12.18 Warranties. The Agency expresses no warranty or representation to the Developer as to fitness or condition of the Property and Craneway or any portion thereof for the building or construction to be conducted thereon.

12.19 Action by the Agency or Developer.
(a) Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, consent, request, or other action by the Agency is required or permitted under this Agreement, such action may be given, made, or taken by the Agency's Community and Economic Development Director, or by any person who shall have been so designated in writing to the Developer by the Community and Economic Development Director (the "Community and Economic Development Director"), without further action or approval by the Agency Board, and any such action shall be in writing. The Community and Economic Development Director may, in his or her discretion, agree in writing to modification of the dates by which action are to be complete or to waive any terms and conditions of this Agreement or to make reasonable modifications to the Agreement requested by lenders to the Project. The Community and Economic Development Director, or his or her designee is authorized to execute all ancillary documents necessary to effectuate the intent of this Agreement, substantially in the form on file with the Agency Secretary and to negotiate and execute amendments to this Agreement substantially in confonnance with the intent of this Agreement as reasonably necessary to conform to funding, lender, and City and/or Agency or outside agency'(s) requirements. (b) Developer shall take all actions necessary to implement the provisions of tins Agreement and to complete those performances required of Developer.

12.20 Citv As Third-Partv Beneficiary. The City shall be a third-party beneficiary retaining enforcement rights with respect to this Agreement. Except as set forth in the preceding sentence, no person or entity other than the Agency, the Developer, and their permitted successors and assigns shall have any right of action under this Agreement.

12.21 Counterparts. This Agreement may be executed in counterparts and multiple originals.

12.22 Amendments. The parties can amend this Agreement only by means of a writing signed by both parties.

12.23 Identity and Authority of Developer. Each of the persons executing this Agreement on behalf of the Developer does hereby covenant and warrant that: (a) the Developer is a duly authorized and existing California corporation; (b) the Developer has, is and shall remain in good standing and qualified to do business in the State ofCalifonlia: (c) the Developer has full right, power and authority to enter into this Agreement and to carry out all actions on its part contemplated by this Agreement; (d) the execution and delivery of this Agreement were duly authorized by proper action of the Developer and no consent, authorization or approval of any 7331171172718.6 Page 53 937
person or other entity is necessary in connection with such execution and delivery or to cmry out all actions on the Developer's part contemplated by this Agreement, except as may have been obtained and are in full force and effect; (e) the persons executing this Agreement on behalf of the Developer have full corporate authority to do so; (f) the Agreement constitutes the valid, binding and enforceable obligation of the Developer; (g) the financial statements of the Developer and all other financial data and information furnished by the Developer to the Agency fairly and accurately present the information contained therein; and, (h) as of the date of this Agreement, there has not been any adverse, material change in the financial condition of the Developer from that shown by such financial statements and other data and information.

12.24 Entire Understanding ofthe Parties. This Agreement is executed in three (3) duplicate originals, each of which is deemed to be an original. This Agreement consists of 55 pages and the attached Exhibits A through J and constitutes the entire understanding and agreement of the parties. All prior discussions, understandings and written agreements are superceded by this Agreement.
733117\172718.6 Page 54 938
7331171172718.6
Exhibit A
Site Map
A-1 939
WHEREFORE, the parties have executed this Agreement on or as of the date first above written.

REVIEWED:

BY:

ATTEST:

REDEVELOPMENT AGENCY OF THE
CITY OF RICHMOND (the "AGENCY")
BY &uOa De~'f1ru

AGENCY SECRETARY J
a California c
Its: President
7331171172718.6 Page 55
940
ExhibitB
Legal Descriptions of the Property and Craneway
733\171172718.6 B-1 941
733\171172718.6
Exhibit C
Form of Grant Deed
C-1 942
ExhibitD
Scope of Development
Developer proposes to rehabilitate the building as a mixed-use project consistent with the Know Freeway/Cutting Boulevard Corridor Specific Plan, which will include various business elements, connnunity organizations, educational institutions, live/work units, visitor center for the National Park Service, public gathering destination, and public access to the Bay TraiL The Craneway design includes a restaurant, education, ente1iainrnent, galleries, and display areas, retail, and gathering destination for groups and events consistent with the California State Lands Commission public trust easement. The Rosie the Riveter Visitor's Center has been allocated 10,000 square feet at the west side of the Craneway. The ground floor in the main building consisting of approximately 300,000 square feet will be primarily for larger R&D/flex and light industrial users with loading dock requirements. Live/work units totaling approximately 160,000 square feet are planned for the second floor. The historic Ford offices, on the second floor, comprised of 7,625 square feet will be historically renovated and returned to office use. During the course of development, the Oil House will either be designed for office use or overflow space for the restaurant.
733117\172718.6 D-1 943
ExhibitE
Schedule of Performance
This Schedule of Performance summarizes the schedule for various activities under the Disposition and Development Agreement (the "Agreement" or the "DDA") to which this exhibit is attached. The description of items in this Schedule of Performance is meant to be descriptive only, and shall not be deemed to modify in any way the provisions of the DDA to which such items relate. Section references herein to the DDA are intended merely as an aid in relating tlus Schedule of Performance to other provisions of the DDA and shall not be deemed to have any substantive effect.

Whenever tills Schedule of Performance requires the submission of plans or other documents at a specific time, such plans or other documents, as submitted, shall be complete and adequate for review by the Agency or other applicable governmental entity within the time set forth herein. Prior to the time set forth for each particular submission, the Developer shall consult with Agency staff informally as necessary concerning such submission in order to assure that such submission will be complete and in a proper form witllln the time for submission set forth herein.

Action Date
Items 1 - 39 Relate to Developer Actions and Requirements as Set Forth in Article 2

1. Submit - Site Investigation Re11orts. The Prior to the date of the DDA.

Agency shall deliver the Site Investigation
Reports to the Developer. [DDA § 2.6(a)]

2. Submission- Preliminm:Y Site Plan. The Prior to the date of the DDA.

Developer shall submit the Preliminary Site
Plan to the Agency. [DDA § 2.4]

3. Review- PreliminiD Site Plan. The Agency Within 30 days of receipt. shall review the proposed Preliminary Site Plan
and shall approve it. [DDA § 2.4]

4. Resubmission -PreliminiD Site Plan. If Witllln 3 0 days of disapproval. disapproved by the Agency, the Developer shall
submit a revised Preliminary Site Plan to the
Agency for approval. [DDA § 2.4]

5. Review - Revised PreliminiD Site Plan. The Within 30 working days of receipt, with Agency shall either approve or disapprove the final approval to occur no later than 90 days revised Preliminary Site Plan. [DDA § 2.4] after the date of this Agreement. 733\171172718.6 E-1 944
Action Date

6. Negotiation of New Pre liminal}' Site Plan. The Withln 90 days of determination by City Developer and the Agency shall negotiate new building department official that origilJal site plan necessitated by life safety and seismic Preliminary Site Plan is infeasible due to concerns. [DDA § 2.4] life safety/seismic concems.

7. Deposit. The Developer shall deposit with the Upon execution ofDDA.

Agency $1,000,000. [DDA § 2.5]

8. User Commitments. The Developer shall use Upon execution of the DDA. best efforts to negotiate lease commitments for
all of the commercial space within the Project
[DDA § 2.16]

9. Review- Site Investigation Reports. The Within 30 days after the date of this Developer shall review the Site Investigation Agreement.

Reports and accept the conditions set forth in
the Site Investigation Reports. [DDA § 2.6(b)]

10. Submission- CEQAINEP A Documentation. Within 60 days after date of the DDA.

The Developer shall submit to the Agency
infmmation necessary to perform CEQAINEP A
review. [DDA § 2.2]

11. Submission- Design DeveloJ2ment Documents. Within 60 days after the date of the DDA.

The Developer shall submit the Design
Development Documents to the Agency. [DDA
§ 2.7]

12. Review- Design DeveloJ2ment Documents. Within 30 days of receipt.

The Agency Community and Economic
Development Director shall review the proposed
Design Development Documents and shall
approve them. [DDA § 2.7]

13. Resubmission- Design Develo12ment Within 45 days of disapproval.

Documents. If disapproved by the Agency, the
Developer shall submit revised Design
Development Documents to the Agency for
approval. [DDA § 2.7]

14. Review- Revised Design DeveloJ2ment Within 30 working days of receipt, with Documents. The Agency shall either approve or fmal approval to occur no later than 150 7331171172718.6 E-2 945
Action Date
disapprove the revised Design Development days after the date of this Agreement.

Documents. [DDA § 2.7]

15. Land Use Approvals. The Developer shall Within 60 days after Agency approval of the obtain any and all Land Use Approvals (other Design Development Documents. than the Building Permit). [DDA § 2.8]

16. Submission- Final Construction Plans. The No later than 60 days following Agency Developer shall submit the Final Construction approval of Design Development Plans for Agency approval. [DDA § 2.9] Documents.

17. Review- Final Construction Plans. The Within 60 days of receipt.

Agency shall review the proposed Design
Development Documents and shall approve
them. [DDA § 2.9]

18. Resubmission- Final Construction Plans. The Within 30 days after Agency's disapproval Developer shall submit corrected Final notice.

Construction Plans for the Project. [DDA § 2.9]

19. Review - Revised Final Construction Plans. Within 15 days ofresubmission, with final The Agency will either approve or disapprove approval to occur no later than 11 months the revised Final Construction Plans for the after the date of the Agreement.

Project. [DDA § 2.9]

20. Submission- Financing Plan. The Developer At the time the Developer submits the shall submit the Financing Plan to the Agency Design Development Documents for the for review and approval. [DDA § 2.1 0] Project.

21. Review - Financing Plan. The Agency shall Within 3 0 days of receipt. review the proposed Financing Plan and shall
approve it. [DDA § 2.1 0]

22. Resubmission- Financing Plan. The Developer Within 30 days after Agency's disapproval shall submit a corrected Financing Plan for the notice.

Project. [DDA § 2.10]
733\17\17271 8.6 E-3 946
Action Date

23. Review- Financing Plan. The Agency will Within 15 days of resubmission, with final either approve or disapprove the revised approval to occur no later than 11 months Financing Plan for the Project. [DDA § 2.10] after the date of the Agreement.

24. Submission- Building Permit Armlication. The No later than 10 days after the Agency's Developer shall submit a Building Permit approval of the Final Construction Plans for application to the City for the Project. [DDA § the Project, in any event not later than one

2.11] year after the date of the Agreement.

25. Evidence of Availability of Funds. The Within 10 days following issuance ofthe Developer shall submit to Agency evidence that Building Permit for the Project, in any event conditions to release funds in Financing Plan not later than one year after the date of the have been met or will be met at Closing. [DDA Agreement. § 2.12]

26. Submission- Construction Contract. The Within 10 days after the issuance of the Developer shall submit a copy of all Building Permit for the Project.

Construction Contracts for the Project to the
Agency's Connnunity and Economic
Development Director or designee. [DDA §

2.13]

27. DiS§J2£roval- Construction Contract. If Within 10 days after the submission of applicable, the Agency's Connnunity and contract(s).

Economic Development Director or a designee
notifies the Developer of the disapproval of
contract(s). [DDA § 2.13]

28. Submission - Insurance. The Developer shall Not less .than 10 days prior to initiating any have furnished the Agency with evidence of the work on the Project. insurance coverage. [DDA § 2.15]

29. Review- Insurance. The Agency shall review Within 10 days of receipt. the evidence of insurance and shall approve it.
[DDA § 2.15]

30. Resubmission- Insurance. The Developer shall Within 15 days after Agency's disapproval submit revised insurance for the Project. [DDA notice.
§ 2.15]
-
7331171172718.6 E-4 947
Action Date

31. Review- Insurance. The Agency will either Within 10 days of resubmission, with final approve or disapprove the revised insurance for approval to occur no later than one year the Project. [DDA § 2.15] after the date of the Agreement.

32. Refit Work. The Developer shall complete the Prior to Closing.

Refit Work. [DDA § 2.3]

33. Delivery of Agency Note and Deed of Trust. Prior to Closing.

The Developer shall deliver the Agency Note
and Agency Deed of Trust to the Agency.
[DDA § 2.17]

34. Delivery of Section 108 Loan Note and Section Prior to Closing. 108 Loan Deed of Trust. The Developer shall
deliver the Section 108 Loan Note and Section
108 Loan Deed of Trust to the Agency. [DDA §

2.18]

35. National Park Service Lease. The Developer Prior to Closing. shall have begun good faith negotiations with
NPS. [DDA § 2.19]

36. Completion Guaranty. The Developer shall Prior to commencement of construction and deliver the completion guaranty. [DDA § 2.21] prior to Closing. 3 7. Cetiificate of Readiness. The Developer shall Prior to commencement of construction and certify to the Agency that the Developer is prior to Closing. ready, willing and able, in accordance with the
terms of the DDA. [DDA § 2.21]

38. Cooperation in Securing HUD Funds. The Prior to Closing.

Developer shall cooperate with the Agency in
securing the HUD Funds. [DDA § 2.22]

39. Fem Terminal Public Access Easement. The At Closing.

Developer shall execute an easement agreement
regarding ferry terminal public access. [DDA §

2.20]
Items 40- 43 Relate to Agency Actions and Requirements As Set Forth in Article 3.

40. CEQAJNEP A Review. The Agency Prior to Closing.
shall complete any required enviromnental
review under CEQA and NEP A. [DDA § 3 .2]
733\17\172718.6 E-5 948
Action Date

41. Tidelands Exchange Agreement. The Prior to Closing.

Agency shall formalize the Exchange
Agreement. [DDA § 3.3]

42. Use ofHUD Funds. The Agency shall Prior to Closing. comply with all HUD requirements regarding
the HUD Funds. [DDA § 3.4]

43. Craneway Lease. The Agency shall use best Prior to Closing. efforts to have the City enter into a lease with
the Developer for the Craneway. [DDA § 3.5]
Items 44- 46 Relate to the Closing As Set Forth In Article 4 And Construction of the Project As Set Forth In Article 6.

44. Closing. The Agency shall convey the Property Within 30 days after the Developer's pre- to the Developer. [DDA § 4.3] disposition conditions in Article 2 of the DDA are met and the Agency's pre-
disposition conditions in Article 3 of the
DDA are met, but in no event later than
December 18, 2004.

45. Commencement of Construction. The Within 30 days after the Closing.

Developer shall con1111ence construction of the
Project. [DDA § 6.3]

46. Completion of Construction. The Developer Within 18 months after actual shall complete construction of the Project and commencement of construction but in no the Public Improvements. [DDA § 6.4] event later than 3 years after actual commencement of construction.
733\171172718.6 E-6 949
7331171172718.6
ExhibitF
Preliminary Site Plan
F-1 950
ExhibitG
Insurance Requirements

1. Liability and Property Damage Insurance.

During the term of this Agreement, the Developer shall keep in full force and effect a policy or policies of commercial general liability and property damage insurance against liability for bodily injury to or death of any person or property damage arising out of an occurrence on or about the Property, including, but not limited to, coverage for explosion hazard and collapse/underground hazard. The limits of such insurance shall be not less than five million dollars ($5,000,000) per occurrence and ten million dollars ($1 0,000,000) aggregate for bodily injury and property damage, provided that the limits for Developer's insurance hereunder shall be reduced to $1,000,000 and $2,000,000, respectively during (but solely during) any period in which the following conditions are satisfied: (a) Developer's general contractor and subcontractors keeps in full force and effect on the Site a policy or policies of comprehensive general liability and property dan1age insurance against liability for bodily injury to or death of any person or property damage arising out of an occurrence on or about the Site, including, but not limited to, coverage for explosion hazard and collapse/underground hazard, with limits of not less than five million dollars ($5,000,000) per occurrence and shall not be less than ten million dollars ($1 0,000,000.00) aggregate for bodily injury and property damage, (b) the Agency and the City are named as additional insureds on such general contractor coverage, and (c) such general contractor and subcontractor insurance policy or policies meets the conditions set forth in Section 4 below, including but not limited to the requirement for written notice thirty (30) days in advance of the effective date of any material change, cancellation or termination in such coverage. Each such policy or policies shall be written on an occurrence form.

2. Workers' Compensation Insurance.

The Developer shall cause to be carried workers' compensation insurance covering all persons employed in connection with the Property and with respect to whom death, bodily injury, or sickness insurance claims could be asserted against Agency or the Developer; provided, however, that the Developer itself is not required to caiTyworkers' compensation coverage if it does not have employees.

3. Envirorm1ental Insurance.

The Agency has previously obtained enviromnental remediation insurance to cover the Property against the costs of unforeseen enviromnental contamination. The Developer shall carry or cause to be carried enviromnental remediation insurance or shall take action to be named a co insured under the Agency's existing policy.
733\171172718.6 G-1 951

4. Insurance Policies and Premiums.
(a) All liability policies required by this Agreement (including the liability policy of the general contractor and subcontractors) shall nan1e Agency and the City as an additional insured. Duplicate copies of such policies or certificates of such insurance shall be promptly furnished to Agency before the connnencement of the construction of the Project. (b) All policies of insurance shall provide that any change or cancellation of said policy must be made in writing and sent to the Developer and Agency at their respective principal offices at least thirty (30) days before the effective date of change or cancellation. 733\17\172718.6 G-2 952
ExhibitH
Site Investigation Reports

1. PSI (Professional Service Industries, Inc) March 7, 1995, Subsurface Investigation Ford Assembly Building Richmond California for Hansen, Murakami and Eshima, Inc.

2. Professional Service Industries, Inc. I PSI Project No. 582-0A021, January 28, 2000, Former Ford Assembly Plant, Richmond, California

3. Professional Services, Inc. January 11, 2000, Craneway Sampling, Former Ford Assembly Plant, 1414-1422 Harbour Way South, Richmond California

4. Professional Services, Inc, 2000, Phase I Environmental Site Assessment for the North Parcel, Harbour Way South, Richmond, California 94804

5. Professional Services, Inc, 1999-2000, Phase I Environmental Site Assessment for the Former Ford Assembly Plant Rehabilitation Project, 1414-1422 Harbour Way South, Richmond, California 94804. December 8, revised January 20, 2000.

6. Terra Verde, 1999. Draft Feasibility Study/Remedial Action Plan: Operable Units 2 and 3 Port of Richmond Shipyard No. 3 Scrap Area Site, Richmond, CA.

7. LSA Associates, Inc. November 2000, Administrative Draft: Ford Assembly Plant Planning amendments and Redevelopment Project, Environmental Impact Report

8. Hansen Murakami Eshima, Inc. 1995. Outline Specifications for Ford Assembly Building Earthquake Repair Project, Richmond California, Additional Investigations.

9. Interactive Resources, Inc. 1992. Historic Structures Report, Ford Motor Company Assembly Building, Richmond, California.

10. TKM Transportation Consultants (TKJM), draft, August 2000, Traffic Impact Study.

11. Butt, Tomas K. and Geraldine Peterson, submission 1987, approvall988. National Register of Historic Places Registration Form for the Ford Motor Company Assembly Plant.

12. Bay Conservation and Development Commission/Metropolitan Transportation Commission, September 18, 1997, San Francisco Bay Area Seaport Plan.

13. LSA Associates, Inc., November 2000, Administrative Draft: Ford Assembly Plant Planning Amendments and Redevelopment Project, Environmental Impact Report. 7331171172718.6 H-1 953

14. Ninyo & Moore, prepared for previous developer (APP), June 10, 2002, Hazardous Building Materials Survey, Richmond Assembly Plant, 1414-1422 Harbour Way South, Richmond California.

15. Carey & Co., Inc., 2000, Ford Motor Company Assembly Building Window Survey.

16. Carey & Co., Inc., 2000, Point Development, Historic Preservation Certification Application, Parts I and II.

17. Burt Olhiser, CAC, Vantage Point Environmental & Coatings Consulting, July 11, 2003, Summmy of Asbestos and Lead Abatement Activities at the Richmond Assembly Plant ji-om September 2002 to July 2003.

18. Burt Olhiser, CAC, Vantage Point Environmental & Coatings Consulting, September 29, 2003, Redwood Painting Project Summary.

19. Burt Olhiser, CAC, Vantage Point Environmental & Coatings Consulting, September 29, 2003, Techno Coating, Inc. Project Summary .
7331171172718.6 . H-2 954
Exhibit I
Permitted Exceptions

1. Current taxes as of the date of Closing, a lien not yet due and payable.

2. The following exceptions set forth in the Preliminary Title Report: item numbers 2-5, 8, 14 and 15.

3. The covenants of Grantee contained in the Grant Deed.

4. The Memorandum ofDDA.

5. The Section 108 Deed of Trust.

6. The Agency Deed of Trust.

7. A settlement agreement with the SLC.

8. Ferry Terminal public access easement.

9. Public rights of access to the shoreline and San Francisco Bay Trail. 1 0. The NPS lease and any other encumbrance created by, through or nnder Developer. 733\171172718.6 I-1 955
Exhibit J

CITY OF RICHMOND

FIRST SOURCE AGREEMENT
THIS AGREEMENT entered into this day of 200_, by and between the CITY OF RICHMOND, a municipal corporation (hereinafter referred to as "City") and-~ (hereinafter referred to as "Contractor).

WITNESSETH:

WHEREAS, the Contractor has been awarded a contract by the City to perform certain construction work described as follows: -----
WHEREAS, the Contractor desires to enter into this First Source Agreement with the City as a part of the Richmond WORKS Program;
NOW, THEREFORE, the parties hereto mutually agree as follows:

The Contractor and the City, through the City's Employment and Training Department, agree that, during the term of the Contract (including any extensions approved by the City Council) in seeking qualified employees to fill entry-level and new employment positions for construction, operations and maintenance and management personnel employed to perform this Contract or any such personnel permanently assigned to perform the Contract whether such positions be full-time, part-time, or seasonal, Contractor shall follow the following procedures:

A. The Contractor shall work with the local union and the City of Richmond, Employment and Training Department to fill those positions where there is a signatory agreement with the local union and the associated craft. The Contractor shall forward a copy of all personnel requests made to the trade unions, specifying the residency, ethnicity/gender of personnel requested, to the Employment and Training Department (this process is hereafter referred to as the "dual notification process"). Iu the dual notification process, the Contractor shall utilize the "namecall," "rehires," "transfers," and/or "sponsorship" options in maximizing the participation of Richmond residents. The dual notification requirement is the sole responsibility of the Contractor.

B. The Contractor shall work with the Employment and Training Department and the local union to hire a minority construction workforce reflecting parity with the minority West Contra Costa County population on a craft-by-craft basis, based on the 2000 census. The Contractor shall adopt the. following goals:
733\171172718.6 J-1 956
hire 50% of his/her workforce from bona fide residents of the City of Richmond. A minimum of 20% Richmond resident hire shall be achieved for the overall project.
hire 50% of all apprenticeships or new workers shall be Richmond residents. A minimum of 40% Richmond resident new hires or apprentices shall be achieved until the minimum 20% Richmond resident hire is achieved on the project.

C. Prior to announcing or advertising the availability of an employment position created by vacancy of an existing position or of a new employment position in any communication medium (other than compliance with internal posting procedures) or with any employment or referral agency and in the event that the unions are unable to provide personnel, the Contractor shall notify. Employment and Training Department in writing of such position, including a general description of the position and Contractor's minimum requirements for qualified applicants therefore, and shall request the Employment and Training Department to refer qualified applicants for such position to Contractor's trade union and/or personnel representative, as appropriate. The Contractor shall, at the same time, forward a copy of the notification to the Project Manager or his designee with a request to approve the use of temporary workers during the hiring period. The Contractor shall refrain from any general announcement or advertisement of the availability of such position for a period often (1 0) business days after notification to the Employment and Training Department. Such ten-day period is hereinafter referred to as the "Advance Notice Period."
D. Upon receipt from the Contractor of a notice of an employment position, the Employment and Training Department shall refer to the Contractor a minimum of one (1) and up to a maximum offive (5) candidates for employment who the Employment and Training Department believes are qualified for each position and who meet the Contractor's minimum requirements for such position, and shall make arrangements for the person or persons referred to be interviewed by the Contractor within the Advance Notice Period.

In the event that the Employment and Training department believes that it is unable to refer qualified candidates for such position within in the Advance Notice Period, it shall so inform the Contractor, as soon as possible, thereby waiving the obligation of the Contractor to refrain from further announcement or advertisement to fill such position during the balance of the Advance Notice Period.

E. In the event that any persons seek employment with the contractor at the job site, the Contractor shall have the person complete a Job Site Application consisting of name, address, telephone number, social security number and trade. The Contractor will then submit this information to the Employment and Training Department to the appropriate union hall.
7331171172718.6 J-2 957
F. Nothing contained herein shall prevent the Contractor from filling job vacancies or newly created positions without compliance with the foregoing procedures by transfer or promotion from its existing staff or from a file of qualified applicants maintained by the Contractor, provided, however, that the Contractor shall give consideration first to those applicants in such file or qualified applicants previously referred by the Employment and Training Department. Further, nothing contained herein shall be construed to require Contractor or any construction, operations and maintenance or management agent or independent subcontractor engaged by the Contractor to hire any candidate refened by the Employment and Training Department.

G. The Contractor shall incorporate the provisions of this First Source Agreement in all contracts, agreements, and purchase orders for labor with any construction, maintenance or management agent or independent subcontractor engaged by the Contractor whose personnel will be permanently assigned to the Contractor under the Contract and shall obligate such agent or independent subcontractor to comply with the procedures set forth in Paragraphs A through C above.

H. The Contract Compliance Officer shall be responsible for monitoring compliance with this Agreement. Contractor shall, on a monthly basis, furnish certified payroll sheets and any additional information required by the City to ascertain the status ofRiclnnond residents hired via this Agreement. Failure to provide the City with proper document shall result in delay of progress payments for that portion which is deemed not in compliance with the provisions of this Agreement. 733\171172718.6 J-3 958
In the event that the Contractor is non-compliance with Article II Chapter 2.50 of the City of Richmond Municipal Code, in the sole opinion of the City, the City fully intends to invoke the Remedies set forth in Article II Chapter 2.50 of the Municipal Code which is made a part of this contract by reference.

Executed this ____ day of ___________ , 200_.

Contractor
By: __________________ ___
CITY OF RICHM:OND

ACTJNG BY AND THROUGH

THERICHMONDEMYLOYMENTAND

TRAJNJNG DEPARTMENT
By: __________________ ___
Approved as to form:

City Attorney
On this day of , 200_, before me appeared
(Name) , to me personally known, who, being duly sworn, did execute the foregoing affidavit, and did state that he or she was properly authorized by (Name of Firm) _____________ to execute the affidavit and did so as his or her free act and deed.

NOTARY PUBLIC ______________________ _
Commission Expires _____________ _
733\17\172718.6 J-4 959

FIRST AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT

THIS FIRST AMENDMENT TO DISPOSITION AND DEVELOPMENT
AGREEMENT ("Amendment") is entered into as of theM day of February, 2004 by and between the REDEVELOPMENT AGENCY OF THE CITY OF RICHMOND, a public body corporate and politic (the "Agency") and ORTON DEVELOPMENT, INC., a California corporation (the "Developer").

RECITALS
A. The Agency and the Developer are parties to that certain Disposition and Development Agreement dated November 18, 2003 (the "Agreement") concerning the sale, lease and redevelopment of certain real property more particularly described therein.

B. The pariies desire to arnend the Agreement upon the terms and conditions set forth herein.

AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Agency and Developer hereby agree as follows:

1. Defined Terms. All capitalized terms not otherwise defmed in this Amendment shall have tl1e meanings set forth in the Agreement.

2. Purchase Price. Subsection (b) of Section 4.3 of the Agreement rs hereby =ended to read in its entirety as follows:
"(b) The Pmchase Price for the Property shall be Five Million Fom Hm1dred Thousand Dollars ($5,400,000.00). Any unexpended portion of tire Deposit shall be credited against the Purchase Price, all of which shall serve to reimbmse the Agency for a poriion of the qualified rehabilitation expenditures previously incurred by tire Agency to rehabilitate ar1d improve the Building prior to November 18, 2003. The Developer acknowledges that tire Agency has retained consultants and others to assist in tl1e determination of compliar1ce with the requirements of Health ar1d Safety Code Section 33433 and that appropriate findings in compliance witl1 said provisions are required for tire approval of this Agreement. Developer shall pay Two Million Dollars ($2,000,000) in U.S. currency of the Purchase Price by deposit into escrow on or before Closing as set forth in Section 4.3 of this Agreement. The balar1ce of the Purchase Price in the 3111ount of Three Million Four Hundred Thousand Dollars ($3,400,000) (the "Deferred Portion") shall be paid by Developer in accordance witl1 Section 4.3A below."

3. Deferred Portion of Purchase Price. New Section 4.3A is hereby added to tire Agreement to read as follows:
"4.3A Pavment of Deferred Portion of Purchase Price. The Deferred Portion of the Purchase Price shall be payable as follows: tire sum of One Million Do liars ($1 ,000,000) shall be paid not later tiran the tl1ird (3'd) anniversary of tire Closing, and tire remaining balar1ce of the Deferred Portion and all accrued unpaid interest thereon shall be paid in full on or before but not later than 51 6J30/270343v2 I
960
the fifth (5th) anniversary of the Closing (the "Maturity Date"). Developer hereby wmves demm1d, notice of non-payment, protests md presentment for payment The Developer shall pay the Defened Portion of the Purchase Price subject to the following:
(a) Interest shall accme on all of the unpaid balmce of the Deferred Portion outstmding at the sallle tenns required by Developer's constmction lender. However in no event shall the interest to be paid on the unpaid balm1ce of the Deferred Portion be less thm simple interest of five md one-half percent (5.5%) per 8llllum. Interest shall be payable quarterly on the first day of each calendar quarter until the Deferred Pmiion is paid in full. Developer shall also pay to the Agency "points", if any, on the Deferred Portion at the same tem1s required by Developer's construction lender.
(b) In the event of sale(s) of all of the Property by the Developer at mytime prior to the fifth (5'11) amliversmy of the Closing, Developer shall pay to the Agency, as additional interest, a sum equal to fifty (50%) percent of Developer's "Profit" (as hereafter defined) realized from my such sale trmsaction(s), payable upon the closing of such trm1saction. (c) Developer's "Profit" means Developer's net profit realized from any such sale as determined for Federal income tax purposes, but excluding any portion of such profit representing recaptnre of depreciation or other losses previously recognized by Developer in connection with the Project.
(d) In the event of Developer's default as outlined in Section 11.4 of the Agreement, Developer's Deposit, md all funds expended by Developer under the Progr= Management Agreement of October 28, 2003 and/or this Agreement are non-refundable to Developer. N otwithstmding the foregoing, a termination of this Agreement as a result of the occunence of my event outlined in Section 11.2 (b) and/or (c) of this Agreement shall not constitute a default by Developer for purposes of this provision. (e) In the event of the sale(s) of all or a portion of the Property (excluding the sale of condominium units), the mnount of the Deferred Portion that shall be paid by the Developer shall be a sum equal to all of the Developer's "Net Cash Proceeds" realized by the Developer from my such sale trmsaction(s), payable upon the closing of such trmsaction. Any such prepayments of the Deferred Portion shall be applied first towmd the $1,000,000 principal reduction payment due on the third alllliversary of the Closing 1111less and until such principal reduction is paid in full; then toward the principal balmce of the Defened Pmiion due on the Matnrity Date; then to my accrued unpaid interest, until the Deferred Pmiion has been paid in full.
(f) For purposes of this Agreement, the term "Net Cash Proceeds" shall mem the excess (if a11y) of (1) the gross cash proceeds of a11y sale of the Property or a11y portion thereof, other tha11 condominium unit(s), over (2) all selling costs including, without limitation, brokerage commissions, closing costs md prorations. In no event shall Net Cash Proceeds of a11y sale of the Property include a11y sum paid to the Agency pursua11t to subsection 8.2(b) below.

In no event shall a11y proceeds from the sale of condominiwn units be required to be applied toward the prepayment of the Defe1Ted Portion.
5J6130/270343v2 2
961
(g) Developer shall provide as security for its performance under Sections 2 and 4.3 of this Agreement a deed of trust on the Property to the Agency ("Agency's Deed of Trust"). The Agency's Deed of Trust shall be junior and subordinate to the lien of Developer's constrnctionlender(s) and original takeout lender(s).
(h) In the event of default in the payment of the Defened Portion as due and as provided for in tllis Section 4.3, Developer shall pay Agency a penalty of one (1 %) percent of the remaining outstanding balance of the Deferred Portion for each calendar quarter that Developer remains in default. Should default be made in payment of any installment when due the whole sum of principal and interest shall become immediately due at the Agency's option.

Interest after default shall continue at the rate stated above. Any payment of interest and/or principal dne and not paid by Developer witllin fifteen (15) days of written notice fi·om the Agency to Developer that such payment(s) is past due shall constitute a material breach of this Agreement.

If suit is brought as a result of Developer's default under this Section, Agency shall be entitled to collect in such proceeding all actual costs and expenses of suit, including but not limited to actual attorney's fees.

4. Sepaxate Certificates of Completion. Subsection (c) of Section 6.11 of the Agreement is hereby amended to read in its entirety as follows:
"(c) If requested by Developer, a separate Certificate of Completion for the residential live-work or otl1er portions of the Project shall be issued separately from the balance of the Project."

5. Completion of Construction. Section 6.4 of the Agreement and Item 46 of the Schedule of Performance (attached as Exllibit E to the Agreement) are both hereby amended as follows: (a) the references to "eighteen (18) months" and "18 months" are hereby changed to read "twenty-four (24) months"; a11d (b) the references to "three (3) years" and "3 years" are hereby changed to "forty-two ( 42) montl1s."

6. Effect of Amendment. In the event of any conflict or inconsistency between this Amendment and the Agreement, the terms and provisions of this Amendment shall be controlling. Except as expressly set fmih herein, the Agreement shall remain in full force and effect according to the terms thereof.

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date and yea1· fn·st set forth above.

II
II
II
II
516130/270343v2 3
962
REVIEWED:

BY:

ATTEST:
cz/2¢~0~~

AGENCY SECRETARY
BY:
516130/270343v2

REDEVELOPMENT AGENCY OF THE
CITY OF RICHMOND (the "AGENCY")
Community & Economic Development Director
)
ORTON DEVE .ENT, INC.,
a California cor·j>plfl#<pjh (the "DEVELOPER")
President
4 963

Richmond City CouncilApril 21, 2026

Richmond City Council
April 21, 2026