4811-0875-8641v12/200471-0009
ADDENDUM A
LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE COUNTY OF PLACER, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
[to come]
Assessor’s Parcel Number:
997
Exhibit E
4811-0875-8641v12/200471-0009
EXHIBIT D
CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE
TO: City of Rocklin
3970 Rocklin Road
Rocklin, California 95677
Attention: City Manager
The undersigned, _______________, being duly authorized to execute this Certificate of Continuing Program Compliance (this “Certificate”) on behalf of [name to be conformed to Lease] [(the “Developer”)], hereby represents and warrants that:
1. He/she has read and is thoroughly familiar with the provisions of that certain agreement entitled “Affordable Housing Agreement” by and between the City of Rocklin (referred to herein as “City”) and the Developer dated as of [AHA Date] (the “ AHA”), including without limitation the Regulatory Agreement, the City Lease, and other attachments thereto. Capitalized terms used herein shall have the same meaning as that set forth in the AHA; and
2. As of the date of this Certificate, the following numb er of completed residential units at Portion B: (i) are currently occupied by Extremely Low Income Households at Affordable Rent; (ii) are currently occupied by Very Low Income Households at Affordable Rent; (iii) are currently occupied by Lower Income Ho useholds at Affordable Rent; (i v) are currently vacant and being held available for occupancy by an Extremely Low Income Household at Affordable Rent; (v) are currently vacant and being held available for occupancy by a Very Low Income Household at Affordable Rent; (vi) are currently vacant and being held available for occupancy by a Lower Income Household and have been so held continuously since the date a Lower Income Household vacated such unit.
Developer shall also delineate which Units are occupied by Locals by means of annotations to the categories set forth below (and/or the submittal of additional reports, which shall be based upon the same reporting period, and which designate income levels, and availability as well as occupancy by households within such category [namely, Locals]):
Occupied at an Affordable Rent by:
i. Extremely Low Income Households (30%) # of Units, Nos.:
ii. Very Low Income Households (50%) _______# of Units, Nos: ______________ iii. Low Income Households (60%) # of Units, Nos.:
Vacant:
a. Held for occupancy by:
i. Extremely Low Income Households (30%) # of Units, Nos.:
ii. Very Low Income Households (50%) ___________ # of Units, Nos.:
________________
iii. Lower Income Households (60%) # of Units, Nos.:
998
Exhibit E
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b. Last occupied by:
i. Extremely Low Income Households (30%) # of Units, Nos.:
ii. Very Low Income Households (50%) _________ # of Units, Nos.: ____________ ii. Lower Income Households (60%) # of Units, Nos.:
3. At no time si nce the date of filing of the last Certification of Continuing Program Compliance have less than one hundred percent (100%) of the Required Affordable Units as completed units in the Project been occupied by, or been last occupied, or have been available f or occupancy by Extremely Low Income Households, Very Low Income Households and/or Lower Income Households at an Affordable Rent.
4. The Developer is not in default under the terms of the AHA, including without limitation the attachments thereto (such as the City Lease and the City Regulatory Agreement).
(DEVELOPER)
PACIFIC STREET HOUSING ASSOCIATES NINE, L.P., a
California limited partnership
By: CHW Pacific Street Nine LLC, its managing general partner By: Community HousingWorks, a California nonprofit public benefit corporation (its sole member and manager)
By: __________________________________
Kevin Leichner
Senior Vice President of Housing and Real Estate Development
999
Exhibit E
4811-0875-8641v12/200471-0009
EXHIBIT E
GROUND LEASE RIDER
THIS GROUND LEASE RIDER (the “Rider”) is attached to and forms a part of that certain Ground Lease (the “Lease”) by and between the City of Rocklin, as lessor (the “Landlord”) and Pacific Street Housing Associates NIne, L.P., a California limited partnership, as lessee (the “Tenant”). All capitalized terms used herein and not otherwise defined in this Rider shall have the meanings given that term in the Lease.
1. TENANT’S RIGHT TO MORTGAGE:
1.1 In addition to the Primary Construction Loan and the Primary Permanent Loan (which loans have been approved by Landlord prior to the commencement of the Term of the Lease), Tenant shall have the right, with Landlord’s prior written consent, which shall not be unreasonably withheld, conditioned or delayed subject to Section 14 of the Lease, to mortgage the Lease and Tenant’s leasehold interest by one or more deeds of trust (each, together with the mortgages of the Primary Construction Loan and the Primary Pe rmanent Loan, a “Leasehold Mortgage”). Landlord shall base its review upon: (i) agreement by the new lender to be subject to the Lease and the Regulatory Agreement to the same extent as the original (or, if applicable, subsequent) Approved Construction and/or Permanent Lender; (ii) agreement by the new lender to provide City with prior written notice and a reasonable opportunity to cure defaults; (iii) agreement by the new lender to provide City with the right to purchase from the lender such lender’s int erest in the event of foreclosure or deed of assignment in lieu of foreclosure for the outstanding amount of such loans as of foreclosure and such costs as such lender incurs in processing such foreclosure or deed or assignment in lieu of foreclosure; (iv) treatment of Cost Savings, if any, shall be in accordance with the AHA; (v) lender to be an Approved Permanent Lender; and (vi) the new loan will not reduce the debt service coverage below
1.15 to 1.00 or add additional bases for acceleration compared to the loan it replaces. No foreclosure (or deed or other transfer in lieu of foreclosure) under any Leasehold Mortgage shall require the consent of the Landlord under, or constitute a breach or default under, the Lease. In the event a Leasehold Mortgagee shall acquire title to Tenant’s leasehold interest by foreclosure (or deed or other transfer in lieu of foreclosure), such Leasehold Mortgagee may freely assign such leasehold interest to an assignee agreeing unconditionally to be bound by and be subject to the Lease as well as covenants of record as to the subject property after notice to but without the consent of Landlord, and thereupon Leasehold Mortgagee shall be released from all liability for performance or observance of the covenants and conditions in the Lease from and after the date of such assignment.
1.2 If Tenant shall mortgage the Lease and Tenant’s leasehold estate hereunder, then Tenant or the holder (each, a “Leasehold Mortgagee”) of such mortgage shall forward to Landlord:
(a) an executed co unterpart of the mortgage or mortgages, in form proper for recording, or, at Tenant’s option, a true copy of such mortgage or mortgages; and 1000
Exhibit E
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(b) a written notice setting forth the name and address of the holder of such mortgage.
In the event of any assignment of the mortgage or mortgages held by a Leasehold Mortgagee, or change in its name and/or address, the assignee of the Leasehold Mortgagee shall give written notice thereof to Landlord, changing the name of the Leasehold Mortgagee and/or the address to which copies of notices are to be sent.
1.3 Until the time, if any, that each Leasehold Mortgage shall be satisfied of record, or each Leasehold Mortgagee shall give to Landlord written notice that the Leasehold Mortgage held by it has been satisfied:
a. no surrender or acceptance of the Property, or cancellation, termination, amendment or modification of the Lease, shall be binding upon any Leasehold Mortgagee, or affect any Leasehold Mortgage, if the same is effectuated without the prior written consent of such Leasehold Mortgagee;
b. if Landlord shall give any notice of default and/or termination to Tenant under the Lease, Landlord shall, at the same time and in the same manner, give a copy of such notice to each Leasehold Mortgagee at the respective address theretofore designated by each of them; and c. no notice of default and/or termination given by Landlord to Tenant shall be binding upon, or affect, any Leasehold Mortgagee, unless a copy of such notice shall be given to such Leasehold Mortgagee.
1.4 Each Leasehold Mortgagee shall be afforded the right, but not the obligation, to perform any term, covenant, or condition of the Lease to be performed by Tenant, as well as to remedy any default by Tenant hereunder, and Landlord shall accept such performanc e by any Leasehold Mortgagee with the same force and effect as if furnished by Tenant, provided, however, that the Leasehold Mortgagee shall not thereby or hereby be subrogated to the rights of Landlord. Additionally, Tenant may delegate irrevocably to any Leasehold Mortgagee(s) the authority to exercise any or all of Tenant’s rights hereunder, including, but not limited to the right of the Leasehold Mortgagee to participate (in conjunction with or to the exclusion of Tenant) in any proceeding, arbitration or settlement involving condemnation or eminent domain affecting Tenant’s leasehold interest in the Property, but no such delegation shall be binding upon Landlord unless and until either Tenant or the Leasehold Mortgagee in question shall give to Landlor d a true copy of a written instrument effecting such delegation, in form required for recording. Such delegation of authority may be effected by the terms of a Leasehold Mortgage itself, in which event the service upon Landlord of an executed counterpart or certified copy of the Leasehold Mortgage in accordance with Section 2, together with a written notice specifying the provisions therein that delegate such authority to such Leasehold Mortgagee, shall be sufficient to give Landlord notice of such delegation. Any provision of the Lease that gives a Leasehold Mortgagee the privilege of exercising a particular right of Tenant hereunder on condition that Tenant shall have failed to exercise such right shall not be deemed to diminish any privilege that any Leasehold Mortgagee may have, by virtue of a delegation of authority from Tenant, to exercise such right without regard to whether or not Tenant shall have failed to exercise such right.
No foreclosure (or deed or other transfer of foreclosure) under any Le asehold Mortgage shall require the consent of Landlord under, or constitute a breach or default under, the Lease. 1001
Exhibit E
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1.5 If:
(a) Tenant shall default under the provisions of the Lease and Landlord shall give notice of such default as provided under the provisions of the Lease; (b) such default shall not be remedied within any applicable grace and/or cure period pursuant to the provisions of the Lease; and
(c) Landlord, by reason of such default, shall become entitled to (i) re-enter the Property or the improvement thereon, or (ii) terminate the Lease or (iii) bring a proceeding to dispossess Tenant and/or any other occupants of the Property or improvements thereon, re -enter the Property and/or improvements thereon and/or terminate the Lease, then, before so re -entering the Property or the improvements, terminating the Lease or commencing such proceeding, and as a condition precedent thereto, Landlord shall:
(x) give to each Leasehold Mortgagee not less than sixty (60) days additional written notice as to a monetary default (specifying the amount and description thereof to the extent then known to Landlord) or default in furnishing any insurance required to be furnished by Tenant hereunder, or ninety (90) days’ additional written notice of any non -monetary default (which shall specify in detail the nature of such default); and (y) allow each Leasehold Mortgagee:
(A) such sixty (60) days or ninety (90) days (as the case may be) within which to cure the default; or
(B) if such default is a non -monetary default (other th an a default in furnishing any insurance required to be furnished by Tenant hereunder) and cannot, with the exercise of due diligence, be cured by such Leasehold Mortgagee within such ninety (90) day period, then provided:
(i) prior to the expiration of su ch ninety (90) day period, such Leasehold Mortgagee has delivered to Landlord an instrument in writing duly executed and acknowledged wherein it agrees to use reasonable efforts to cure such default; and (ii) such default is susceptible of being cured by Leasehold Mortgagee without regard to whether Leasehold Mortgagee has possession of the Property and such Leasehold Mortgagee shall, prior to the expiration of such ninety (90) day period, have commenced curing such default, then such ninety (90) day perio d shall be extended, as long as such Leasehold Mortgagee diligently pursues the curing of such default with continuity, for such period as may be necessary to cure same provided that such period of time shall not be so extended if to do so would subject Landlord to any criminal or civil liability or the cancellation of any insurance required to be maintained by Tenant or the inability to obtain any such insurance.
Nothing herein contained shall affect the right of Landlord, upon occurrence of any subsequent default, to exercise any right or remedy herein reserved to Landlord, subject, however, to the provisions of this Section.
1002
Exhibit E
4811-0875-8641v12/200471-0009
1.6 If:
(a) Tenant shall default in the performance or observance of any term, covenant, or condition of the Lease on Tenant’s part to be performed or observed, other than a term, covenant or condition requiring the payment of a sum of money; and
(b) such default is of such a nature that the same either:
(i) cannot practicably be cured by a Leasehold Mortgagee without taking possession of the Property and/or the improvements thereon; or (ii) is not susceptible of being cured by any Leasehold Mortgagee, then Landlord shall not:
(x) re-enter the Property and/or the improvements thereon or serve a notice of election to terminate the Lease;
(y) bring a proceeding to dispossess Tenant and/or any other occupants of the Property or the improvements, re-enter the Property and/or the improvements and/or terminate the Lease; or
(z) otherwise terminate the leasehold estate of Tenant hereunder, If, and for so long as:
(A) a Leasehold Mortgagee shall deliver to Landlord, prior to the date on which Landlord shall be entitled to give notice of election to terminate the Lease or re -enter the Property and/or the improvements, a written instrument, duly ex ecuted and acknowledged, in which the Leasehold Mortgagee agrees that:
(X) it will use reasonable efforts to cure such default to the extent the same is susceptible of being cured by the Leasehold Mortgagee, nominee or purchaser; and (Y) if the Lease thereafter is terminated, or Landlord thereafter re- enters the Property and/or the improvements prior to the curing of such default, the Leasehold Mortgagee shall pay to Landlord the cost of curing such default; and (B) if the default is of such a nature that same cannot practicably be cured by a Leasehold Mortgagee without taking possession of the Property and/or the improvements, a Leasehold Mortgagee shall proceed diligently, subject to any stay in any proceedings involving the insolvency of Tenant or any other proceeding, stay or injunction, to obtain possession of the Property and/or the improvements by foreclosure or deed in lieu of foreclosure, and, upon obtaining such possession, shall promptly cure such default; and
(C) if the default is of such a nature that the same is not susceptible of being cured by such Leasehold Mortgagee, a Leasehold Mortgagee shall institute foreclosure proceedings and diligently prosecute the same to completion, subject to any stay in any proceedings involving the insolvency of Tenant or other proceeding, stay or injunction (unless, in the meantime, the Leasehold 1003
Exhibit E
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Mortgagee shall acquire Tenant’s estate hereunder, either in its own name or through a nominee, by assignment in lieu of foreclosure).
1.7 No Leasehold Mortgagee shall be required to continue to proceed to obtain possession, or to continue in possession as mortgagee, of the Property or the Improvements pursuant to subsection (b)(B) of Section 1.6 or to continue to prosecute foreclosure proceedings pursuant to subsection (b)(C) of Section 1.6 if and when Tenant’s default shall be cured. Nothing contained in Section 1.6 shall preclude Landlord from exercising any of its rights or remedies with respect to any other default by Tenant during any period of Landlord’s forbearanc e under Section 1.6 but, in such event, if any Leasehold Mortgagee, any nominee thereof, or any purchaser at a foreclosure sale shall:
(a) acquire title to Tenant’s leasehold estate hereunder; and (b) thereafter exercise reasonably diligent efforts to cure all non-monetary defaults of Tenant hereunder that are susceptible of being cured by such Leasehold Mortgagee, nominee or purchaser, as the case may be; the defaults of any prior holder of Tenant’s leasehold estate hereunder that are not susceptible of being cured by such Leasehold Mortgagee, nominee or purchaser exercising such efforts shall no longer be deemed to be defaults hereunder; and (c) If the initial construction of the Improvements on the Property is not yet complete, Leasehold Mortgagee or any purchaser at a foreclosure sale shall have thirty-six (36) months from the date of acquiring the Tenant’s leasehold estate to complete construction of the Development in accordance with the terms of this Lease.
1.8 If, for any reason, the Lease shall be terminated prior to the Expiration Date, Landlord will give each Leasehold Mortgagee written notice of such fact and shall also, on the written request of any Leasehold Mortgagee made within sixty (60) days of such termination (or, if later, within sixty (60) days after Landlord gives each Leasehold Mortgagee written notice of such termination), enter into a new lease of the Property with such Leasehold Mortgagee, within thirty (30) days after the receipt of such request, for the remainder of the term, effective as of the date of such termination, at the rent, and upon the other terms, covenants and conditions herein contained, subject, however, to the rights, if any, of the parties then in possession of any part of the Property, and provided that all then existing defaults shall be deemed cured.
In the event that more than one Leasehold Mortgagee qualifies to receive a new lease pursuant to the terms of this Section, such new lease shall be entered into with the holder of the Leasehold Mortgagee that is most senior in priority. Upon the execution and delivery of such new lease, any subleases that may have theretofore been assigned and transferred to Landlord shall thereupon be assigned and transferred, without recourse by Landlord, to the new tenant; and (d) after such termination and cancellation of the Lease and prior to the expiration of the period within which Leasehold Mortgagee may elect to obtain a new lease from Landlord, Landlord shall refrain from terminating any existing sublease or otherwise encum bering the Property without the prior written consent of Leasehold Mortgagee. Any new lease granted Leasehold Mortgagee shall be in the form substantially similar to the Lease and shall enjoy the same priority in time and in right as the Lease over any lien, encumbrance or other interest created by Landlord before or after the date of such new lease and shall vest in Leasehold Mortgagee all right, title, interest, power and privileges of Tenant hereunder in and to the Property, including, without limitation, the assignment 1004
Exhibit E
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of Tenant’s interest in and to all then existing subleases and sublease rentals and the automatic vesting of title to all Improvements, fixtures and personal property of Lessee in Leasehold Mortgagee. Such new lease shall provide, with respect to each and every permitted sublease which immediately prior to the termination of the Lease was superior to the lien of the Leasehold Mortgagee that Leasehold Mortgagee shall be deemed to have recognized the sublessee under the sublease, pursuant to the terms of the sublease as though the sublease had never terminated but had continued in full force and effect after the termination of the Lease, and to have assumed all the obligations of the sublessor under the sublease accruing from and after the t ermination of the Lease, except that the obligation of the new lessee, as sublessor, under any covenant of quiet enjoyment, expressed or implied, contained in any such sublease shall be limited to the acts of such new lessee and those claiming by, under or through such new lessee.
1.9 The rights hereunder of the Leasehold Mortgagees shall be exercisable by them in order of priority of lien of their respective Leasehold Mortgages. The liability of any Leasehold Mortgagee acquiring Tenant’s interest hereunder shall be limited to such Leasehold Mortgagee’s then interest in the Property.
1.10 No Leasehold Mortgagee shall be liable, as tenant, under the provisions of the Lease unless and until such time as it becomes, and then only for as long as it remains, the owner of Tenant’s interest hereunder.
1.11 Notwithstanding anything to the contrary contained in the Lease, all proceeds arising from any casualty insurance, business interruption insurance, rental loss insurance or similar insurance policy relating to th e Property and/or any improvements now or hereafter located thereon, and all proceeds of any award or payment made in connection with any condemnation or eminent domain proceeding (or deed or other transfer under threat of the same or in lieu thereof) invo lving all or any part of the Property and/or any improvements now or hereafter located thereon, shall be paid to the Leasehold Mortgagees for application in accordance with their respective Leasehold Mortgages.
1.12 Landlord shall, within thirty (30) days after the written request of any Leasehold Mortgagee:
(a) acknowledge in writing to them, or to any of them, the receipt by Landlord of any notice or instrument given, sent, or delivered to Landlord pursuant to the provisions of this Article; and/or
(b) furnish to them, or to any of them, a written statement, duly acknowledged, of the following items:
(i) the amount of net rental due, if any, and amounts due in connection with the failure by Lessee to satisfy the Ancillary Duties or any other provisions of this Lease; (ii) whether the fire and other insurance required by the Lease have been supplied in compliance therewith;
(iii) whether the Lease is unmodified and in full force and effect (or, if there have been modifications, that the same are in full forc e and effect as modified and stating the modifications);
1005
Exhibit E
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(iv) whether, to the best knowledge and belief of Landlord, Tenant is in default, specifying the nature of any known default and any pertinent facts with respect thereto; (v) whether Landlord has giv en Tenant any notice of default under the lease, and if given, whether the default set forth therein remains uncured; and (vi) such other matters as the Leasehold Mortgagee may reasonably request.
Any such statement shall be for the sole benefit of the Leasehold Mortgagee and shall have no effect, as an estoppel or otherwise, with respect to any third party.
2. Notwithstanding anything to the contrary contained elsewhere herein, upon the acquisition by any Leasehold Mortgagee of leasehold title to the Prope rty, whether by foreclosure, deed in lieu of foreclosure, acceptance of a new lease pursuant to the terms of the Lease or otherwise, (i) the obligation to pay past due rent under the Lease (or any such new lease) and to pay any other amounts then due by th e original Tenant, shall irrevocably terminate, excepting only in the event [to come: Lessee], CHW, or an Affiliated Person other than an Approved Construction and/or Permanent Lender shall become owner of Portion B (whether of a leasehold or greater inter est) in which event rent will be restored to the rent set forth in Section 5.1 of the Lease and (ii) rent shall be payable prospectively in the manner and at the amounts determined under the Lease.
3. Notwithstanding anything to the contrary set forth in this Lease, commencing upon the completion of a Foreclosure Event and continuing for the remainder of the Term hereof, but expressly subject to compliance with the Regulatory Agreement, Tenant shall only be required to make available, restrict occupancy to, and rent all of the Required Affordable Units to Lower Income Households at Affordable Rent; provided that the foregoing portion of this Section 3 shall cease to be effective and the Affordability Requirements shall be restored to effectiveness in the man ner originally set forth as to the Prescribed Income Levels in the event [to come], CHW or a n Affiliated Person other than an Approved Construction and/or Permanent Lender shall become owner of Portion B (whether of a leasehold or greater interest).
1006
Exhibit F
EXHIBIT F
Insurance During Construction
Lessee shall procure or provide evidence to confirm that Lessee or contractor(s) has procured and will maintain for the duration of the contract, and for 5 years thereafter [City will review insurance requirements as part of review of the Proof of Financing Commitments], insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder by the Lessee and/or Lessee’s contractor, his agents, representatives, employees, or subcontractors.
MINIMUM SCOPE AND LIMIT OF INSURANCE
Coverage shall be at least as broad as:
1. Commercial General Liability (CGL): Insurance Services Office (ISO) Form CG 00 01 covering CGL on an “occurrence” basis, including products and completed operations, property damage, bodily injury and personal & advertising injury with limits no less than $5,000,000 per occurrence. Such limits may be achieved through the combination of primary general lability and one or more umbrella/excess liability policy(ies).
2. Automobile Liability: Insurance Services Office Form CA 0001 covering all owned (if any), non-owned and hired automobiles, with limits no less than $5,000,000 per accident for bodily injury and property damage. Such limits may be achieved through the combination of primary general liability and one or more umbrella/excess liability policy(ies).
3. Workers’ Compensation insurance as required by the State of California, with Statutory Limits, and Employers’ Liability insurance with a limit of no less than $1,000,000 per accident for bodily injury or disease.
4. Builder’s Risk (Course of Construction) insurance utilizing an “All Risk” (Special Perils) coverage form, with limits equal to the completed value of the project and no coinsurance penalty provisions.
5. Surety Bonds as described below.
6. Professional Liability (if Design/Build), with limits no less than $2,000,000 per occurrence or claim, and $2,000,000 policy aggregate. This coverage is to be provided by the architect and/or design-build general contractor providing such professional services
7. Contractors’ Pollution Liability and/or Asbestos Legal Liability (i f project involves environmental hazards) with limits no less than $1,000,000 per occurrence or claim, and $2,000,000 policy aggregate. This coverage may be provided by the general contractor.
If the Lessee or contractor maintains broader coverage and/or higher limits than the minimums shown above, the City requires and shall be entitled to the broader coverage and/or the higher limits maintained by the either. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City.
Self-Insured Retentions
Self-insured retentions must be declared to and approved by the City. The City may require the Lessee or contractor to purchase coverage with a lower retention or provide proof of ability to pay losses and related investigations, claim administration, and defense expenses within the retention.
The policy language shall provide, or be endorsed to provide, that the self-insured retention may be 1007
Exhibit F
satisfied by either the named insured or City. The CGL and any policies, including Excess liability policies, may not be subject to a self-insured retention (SIR) or deductible that exceeds $100,000 unless approved in writing by City. Any and all deductibles and SIRs shall be the sole responsibility of Lessee or contractor or subcontractor who procured such insurance and shall not apply to the Indemnified Additional Insured Parties. City may deduct from any amounts otherwise due Lessee or contractor to fund the SIR/deductible. Policies shall NOT contain any self-insured retention (SIR) provision that limits the satisfaction of the SIR to the Named Insured. The policy must also provide that Defense costs, including the Allocated Loss Adjustment Expenses, will satisfy the SIR or deductible. City reserves the right to obtain a copy of any policies and endorsements for verification.
Other Insurance Provisions
The insurance policies are to contain, or be endorsed to contain, the following provisions:
1. The City, its officers, officials, employees, and volunteers are to be covered as additional insureds on the CGL policy with respect to liability arising out of work or operations performed by or on behalf of the Lessee or contractor including materials, parts, or equipment furnished in connection with such work or operations and automobiles owned, leased, hired , or borrowed by or on behalf of the Lessee or contractor. General liability coverage can be provided in the form of an endorsement to the Lessee or contractor’s insurance (at least as broad as ISO Form CG 20 10, CG 11 85 or both CG 20 10, CG 20 26, CG 20 33, or CG 20 38; and CG 20 37 forms if later revisions used).
2. For any claims related to this project, the Lessee or contractor’s insurance coverage shall be primary and non-contributory insurance coverage at least as broad as ISO CG 20 01 04 13 as respects the City, its officers, officials, employees, and volunteers. Any insurance or self- insurance maintained by the City, its officers, officials, employees, or volunteers shall be excess of the Lessee or contractor’s insurance and shall not contribute with it. This requirement shall also apply to any Excess or Umbrella liability policies.
3. Each insurance policy required by this clause shall provide that coverage shall not be canceled, except with notice to the City.
Builder’s Risk (Course of Construction) Insurance
Lessee or contractor may submit evidence of Builder’s Risk insurance in the form of Course of Construction coverage. Such coverage shall name the City as a loss payee as their interest may appear.
Claims Made Policies
If any coverage required is written on a claims-made coverage form:
1. The retroactive date must be shown, and this date must be before the execution date of the contract or the beginning of contract work.
2. Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after completion of contract work.
3. If coverage is cance lled or non -renewed, and not repla ced with another claims -made policy form with a retroactive date prior to the contract effective, or start of work date, the Lessee or contractor must purchase extended reporting period coverage for a minimum of five (5) years after completion of contract work.
4. A copy of the claims reporting requirements must be submitted to the City for review. 1008
Exhibit F
5. If the services involve lead -based paint or asbestos identification/remediation, the Lessee or contractors Pollution Liability policy shall not contain lead-based paint or asbestos exclusions.
If the services involve mold identification/remediation, the Lessee or contractor s Pollution Liability policy shall not contain a mold exclusion, and the definition of Pollution shall include microbial matter, including mold.
Umbrella or Excess Policies
The Lessee or contractor may use Umbrella or Excess Policies to provide the liability limits as required in this agreement. This form of insurance will be acceptable provided that all of the Primary and Umbrella or Excess Policies shall provide all of the insurance coverages herein required, including, but not limited to, primary and non-contributory, additional insured, Self-Insured Retentions (SIRs), indemnity, and defense requirements. The Umbrella or Excess policies shall be provided on a true “following form” or broader coverage basis, with coverage at least as broad as provided on the underlying Commercial General Liability insurance. No insurance policies maintained by the Additional Insureds, whether primary or excess, and which also apply to a loss covered hereunder, shall be called upon to contribute to a loss until the Lessee or contractor’s primary and excess liability policies are exhausted.
Acceptability of Insurers
Insurance is to be placed with insurers approved to conduct business in the state with a current A.M.
Best rating of no less than A: VII, unless otherwise acceptable to the City.
Waiver of Subrogation
Lessee or contractor hereby agrees to waive rights of subrogation which any insurer of Lessee or contractor may acquire from Lessee or contractor by virtue of the payment of any loss. Lessee or contractor agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation. The Workers’ Compensation policy shall be endorsed with a waiver of subrogation in favor of the City for all work performed by the Lessee or contractor, its employees, agents and subcontractors or contractors.
Verification of Coverage
Lessee or contractor shall furnish the City with original certificates and amendatory endorsements or copies of the applicable policy language effecting coverage required by this clause and a copy of the Declarations and Endorsements Pages of the CGL and any Excess policies listing all policy endorsements. All certificates and endorsements and copies of the Declarations & Endorsements pages are to be received and approved by the City before work commences. However, failure to obtain the required documents prior to the work beginning shall not waive the Lessee or contractor’s obligation to provide them. The City reserves the right to require complete, certified copies of all required insurance policies, including endorsements required by these specifications, at any time.
Subcontractors
Lessee or contractor shall require and verify that all subcontractors maintain insurance meeting all requirements stated herein, and Lessee or contractor shall ensure that City is an additional insured on insurance required from subcontractors. For CGL coverage, subcontractors or contractors shall provide coverage with a form at least as broad as CG 20 38 04 13.
Duration of Coverage
CGL & Excess liability policies for any construction related work, including, but not limited to, maintenance, service, or repair work, shall continue coverage for a minimum of 5 years for Completed Operations liability coverage. Such Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after completion of the contract of work. 1009
Exhibit F
Surety Bonds
Lessee or contractor shall provide the following Surety Bonds:
1. Performance Bond
2. Payment Bond
3. Maintenance Bond
The Payment Bond and the Performance Bond shall be in a sum equal to the contract price. If the Performance Bond provides for a one-year warranty a separate Maintenance Bond is not necessary.
If the warranty period specified in the contract is for longer than one year a Maintenance Bond equal to 10% of the contract price is required. Bonds shall be duly executed by a responsible corporate surety, approved to issue such bonds in the State of California and secured through an authorized agent with an office in California.
Special Risks or Circumstances
City reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other circumstances. 1010
Exhibit G
EXHIBIT G
Insurance During Remainder of Lease Term
Lessee shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the Lessee’s operation and use of the leased premises. The cost of such insurance shall be borne by the Lessee. [City will review insurance requirements as part of review of the Proof of Financing Commitments].
MINIMUM SCOPE AND LIMIT OF INSURANCE
Coverage shall be at least as broad as:
1. Commercial General Liability (CGL): Insurance Services Office Form CG 00 01 covering CGL on an “occurrence” basis, including products and completed operations, property damage, bodily injury and personal & advertising injury with limits no less than $2,000,000 per occurrence. If a general aggregate limit applies, either the general aggregate limit sh all apply separately to this project/location (ISO CG 25 03 or 25 04) or the general aggregate limit shall be twice the required occurrence limit.
2. Workers’ Compensation insurance as required by the State of California, with Statutory Limits, and Employer’s Liability Insurance with limits of no less than $1,000,000 per accident for bodily injury or disease. (This applies to lessees with employees).
3. Property insurance against risks of loss (ISO “Special Form” perils) to any tenant improvements or betterment s, at full replacement cost with no coinsurance penalty provision.
If the Lessee maintains broader coverage and/or higher limits than the minimums shown above, the City requires and shall be entitled to the broader coverage and/or the higher limits maintained by the Lessee.
Other Insurance Provisions
The insurance policies are to contain, or be endorsed to contain, the following provisions:
Additional Insured Status
The City, its officers, officials, employees, and volunteers are to be covered as additional insureds on the CGL policy with respect to liability arising out of work or operations performed by or on behalf of the Contractor including materials, parts, or equipment furnished in connection with such work or operations. General liability coverage can be provided in the form of an endorsement to the Contractor’s insurance (at least as broad as ISO Form CG 20 10 11 85 or if not available, through the addition of both CG 20 10, CG 20 26, CG 20 33, or CG 20 38; and CG 20 37 if a later edition is used).
Primary Coverage
For any claims related to this contract, the Lessee’s insurance coverage shall be primary and non- contributory and at least as broad as ISO CG 20 01 04 13 as respects the City, its officers, officials, employees, and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, or volunteers shall be excess of the Lessee’s insurance and shall not contribute with it. This requirement shall also apply to any Excess or Umbrella liability policies. 1011
Exhibit H
Notice of Cancellation
Each insurance policy required above shall provide that coverage shall not be canceled, except with notice to the City.
Waiver of Subrogation
Lessee hereby grants to City a waiver of any right to subrogation which any insurer of said Lessee may acquire against the City by virtue of the payment of any loss under such insurance. Lessee agrees to obtain any endorsement that may be necessary to affect th is waiver of subrogation, but this provision applies regardless of whether or not the City has received a waiver of subrogation endorsement from the insurer.
Self-Insured Retentions
Self-insured retentions must be declared to and approved by the City. The City may require the Lessee to purchase coverage with a lower retention or provide proof of ability to pay losses and related investigations, claim administration, and defense expenses within the retention. The policy language shall provide, or be endorsed to provide, that the self-insured retention may be satisfied by either the named insured or City. The CGL and any policies, including Excess liability policies, may not be subject to a self-insured retention (SIR) or deductible that exceeds $100,000 unless approved in writing by City. Any and all deductibles and SIRs shall be the sole responsibility of Lessee who procured such insurance and shall not apply to the Indemnified Additional Insured Parties. City may deduct from any amounts otherwise due Lessee to fund the SIR/deductible. Policies shall NOT contain any self-insured retention (SIR) provision that limits the satisfaction of the SIR to the Named. The policy must also provide that Defense costs, including the Allocated Loss Adjustment Expenses, will satisfy the SIR or deductible. City reserves the right to obtain a copy of any policies and endorsements for verification.
Acceptability of Insurers
Insurance is to be placed with insurers approved to conduct business in the state with a current A.M.
Best’s rating of no less than A:VII, unless otherwise acceptable to the City.
Verification of Coverage
Lessee shall furnish the City with original certificates and amendatory endorsements or copies of the applicable policy language effecting coverage required by this clause and a copy of the Declarations and Endorsements Pages of the CGL and any Excess policies listing all policy endorsements. All certificates and endorsements and copies of the Declarations & Endorsements pages are to be received and approved by the City before work commences. However, failure to obtain the required documents prior to the work beginning shall not waive the Lessee’s obligation to provide them. The City reserves the right to require complete, certified copies of all required insurance policies, including endorsements required by these specifications, at any time. City reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances.
Special Risks or Circumstances
City reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances.
1012
Exhibit H
EXHIBIT H
Map of the Adjacent City Parking Area
1013
EXHIBIT I
Map of the Portion B Area
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2305 Chicago Avenue, Riverside, California 92507
Office (951) 680-0440 Fax; (951) 680-0490
www.TKEengineering.com
INFORMATION SUMMARY
FOR PROPOSED
AFFORDABLE HOUSING AGREEMENT AND GROUND LEASE WITH
COMMUNITY HOUSINGWORKS, INC.
A CALIFORNIA NONPROFIT PUBLIC BENEFIT CORPORATION
“33433 REPORT”
AMENDED OCTOBER 30, 2025
Introduction:
The original 33433 Report was prepared as of October 17, 2022. Since that time, Community HousingWorks, Inc., a California nonprofit public benefit corporation (“CHW”), the original applicant, has refined the Project, created the limited partnerships needed to finance, develop and operate the affordable housing apartments , obtained preliminary commitments from the California Tax Credit Allocation Committee (“CT CAC”) to acquire Low-Income Housing Tax Credit (“LIHTC”) equity financing and is poised , by way of the limited partnerships it formed, to enter into the Affordable Housing Agreements (“AHAs”) and Ground Leases (“Leases”) with the City needed to enable the development of the Project . Therefore, the purpose of this amendment is to modify the original 33433 Report to bring it current as of the date indicated below. Further, this amended 33433 Report will now supersede the original 33433 Report.
Background:
This amended summary was prepared for the City of Rocklin (“City”) to address the provisions of and pursuant to California Health and Safety Code (“HSC”) § 33433 with respect to the Affordable Housing Agreements (“AHAs”) and Ground Lease s (“Leases”) (collectively, “AHAs/Leases”) between Pacific Street Housing Associates Four, L.P., a California limited partnership (“PSHA-4”) and Pacific Street Housing Associates Nine, L.P., a California limited partnership (“PSHA-9”). The numbering nomenclature used in naming the limited partnerships ties to the type of LIHTCs applicable to the affected parcel (i.e., 4 = 4% LIHTC and 9 – 9% LIHTC). Both PSHA-4 and PSHA-9 were formed by CHW. For ease of review, collective references to PSHA -4 and PSHA-9 are herein after referred to as the “Developers”. Further, CHW created two limited liability companies to serve as general partners for the Developers, as follows: i) CHW Pacific Street Four, LLC is the general partner for PSHA-4; and ii) CHW Pacific Street Nine, LLC is the general partner for PSHA-9. Notwithstanding the complexity of the legal structures needed to finance the Project, the Project will be managed by CHW.
The AHAs/Leases pertain to the development of two apartment complexes consisting of one-hundred and ten (110) units (the “Project”) on that certain property located along Pacific Street between Oak and Pine Streets, Rocklin, California (APNs 010- 121-001, -002, -004 & - 005) and the intersecting alleyway between the parcels (“Site”). Specifically, PSHA-4 will develop 50 units on the portion of the Site identified as Parcel 2 on the attached Project Plan Map and PSHA-9 will develop 60 units on the portion of the Site identified as Parcel 3 on the attached Project Plan Map. Since the date of the original information summary, CHW acquired an adjacent parcel identified as parcel 4 on the attached Project Plan Map and has granted fee ownership of it to the City to allow the City to include it within parcel 2 by way of a lot line adjustment to become a part of the Project. This ac commodation will allow the entire block to be used for affordable housing and related parking purposes and will avoid
TKE Engineering, Inc.
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a hold-out parcel.
In addition, in this matter the City is acting in its capacity as the Successor Housing Agency to the Rocklin Redevelopment Agency since the Site was originally owned by the Rocklin Redevelopment Agency and subsequently sold by the Successor Agency to the Rocklin Redevelopment Agency to the City, wherein the purchase price was exclusively funded with cash from the Successor Housing Agency’s Low- and Moderate-Income Housing Asset Fund (“LMIHAF”).
The proposed AHAs/Leases with the City , contemplate that the Developers will seek equity funds through federal LIHTCs as well as other private and public funding sources, based upon which the Developers would proceed to develop two family (age unrestricted) apartment complexes. Because the financing plans for the Developers will include LIHTC funding, then: i) not less than thirty percent (30%) of the total units will be required to be reserved for occupancy by households earning not greater than thirty percent (30%) of the Placer County Median Income, adjusted by family size (“Extremely Low-Income”); ii) not less than fifty percent (50%) of the total units will be required to be reserved for occupancy by households earning not greater than fifty percent (50%) of the Placer County Median Income, adjusted by family size (“Very Low-Income”); and iii) up to twenty percent (20%) of the total units may be reserved for occupancy by households earning not greater than fifty- nine percent (59%) of the Placer County Median Income, adjusted by family size (“Low -Income”).
Collectively, the Extremely Low -Income, Very Low -Income and Low- Income reserved units are hereinafter referred to as the ”Affordable Units”.
TKE has reviewed CHW’s proformas that are applicable to the Project and confirms the use of LIHTC equity funds and private activity multifamily housing bond financing (recycled bond loan) as essential components of the financing plans. Therefore, since the fiscal viability of the Project requires LIHTC funding and private activity bonds for which both funding sources require the Project to provide the Affordable Units (in the mix described above), it is appropriate for this report to assume that the Project’s net operating income will be impaired by the inclusion of the Affordable Units (as described above) within the Project and will affect the residual value of the Site, as further described herein.
Consistent with the foregoing, the structure of the AHA s require the Developers to ground lease specific portions of the Site from the City for a term of least 87 years. The amount of ground rent to be paid is projected to be $1.00 per year . With respect to the City loan proposed for the PSHA-4 AHA (which would be in the original principal amount of $2,600,000: an amount consistent with that previously contemplated by the City in its approval of a Preliminary Commitment Letter ), that loan would be repayable from residual receipts: this means that the loan would be payable from Project- generated revenues rem aining after taking into account operating costs and other debt service payments. Per the proforma for PSHA-4, repayment of the City loan would begin during 2054.
The City acquired the Site from the Successor Agency to the Rocklin Redevelopment Agency for a $560,000, which was exclusively funded with cash from the Successor Housing Agency’s LMIHAF.
Fair market value was confirmed pursuant to the Integra Realty Resources, Sacramento, appraisal dated May 24, 2019, without any extraordinary assumptions (i.e., an “as is, where is” valuation).
The City’s acquisition of the Site was in furtherance of the : i) Rocklin Redevelopment Agency Redevelopment Plan; ii) City’s General Plan (Housing Element); and iii) the applicable Regional Housing Needs Allocation (“RHNA”) plan that designated Rocklin to produce several thousand lower income housing units during the period of 2021-2029. The need for an HSC § 33433 summary report was prompted by the funding source used for the City’s acquisition of the Site (i.e., former Rocklin Redevelopment Agency assets).
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1. Cost of Project (AHAs/Leases) to City:
The overall Project is anticipated to produce a net cost to the City of $3,160,000. This conclusion is based upon the following data:
a. Land Acquisition Cost: The Site was acquired by the City for $560,000.
b. Clearance Costs: None, the Site was vacant at the time of acquisition.
c. Relocation Costs: None, the Site was vacant at the time of acquisition.
d. Improvement Costs: None, the City has not incurred any improvement costs.
e. Finance Costs: The City exclusively funded the acquisition price with cash from the Successor Housing Agency’s LMIHAF.
f. Other Costs: The development of the Project requires a City soft money loan of $2,600,000 also funded with LMIHAF.
g. Offsetting Revenue: The City anticipates receiving repayment of the City loan amount of $2,600,000, plus a modest rate of interest. Per the proforma for PSHA -4, repayment of the City loan would begin during 2054.
2. Estimated value of the interest to be conveyed or leased, determined at highest and best use permitted by the Redevelopment Plan:
The Developers financing plans for development of the Project with Affordable Units is very similar to the financing plans presented by affordable housing developers seeking financing for other affordable rental housing projects in California. Although some variances may be included for portions of such financing plans and the Developers may seek additional financing sources, by and large, the basic sources of financing are identical (i.e., 9% or 4% LIHTCs and private activity multifamily housing bonds ). These financing sources require that projects they approve include Affordable Units (as described above). The practical effect of including Affordable Units with below- market rental rates is to significantly diminish a project’s net operating inc ome, which among other matters, limits the project’s capability of obtaining debt financing and the residual lease payments attributable to the land. Further, these requirements render the value of the interest to be conveyed to a negative number, which triggers the need for additional preferential or soft financing.
With respect to the Project, the Developers currently estimate that the Project will require approximately $58.9 million to develop. Overall, it is estimated that the combined Project’s projected cash flow only supports approximately 74% of the Project’s costs (including permanent scheduled debt and LIHTC equity). The remaining 26% includes a variety of soft financing sources.
Consequently, the PSHA-4 financing plan includes a $2.6 million residual receipts loan from the City (“City Loan”) (also funded with LMIHAF) and a developer fee contribution of between $2.4 million and $4.1 million (yet to be finalized).
It is important to note that the Developers combined proformas assume that the value of the City’s contribution of the Site to the Project (pursuant to a residual receipts lease) of $4,400,000. This 1017
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amount is included within the proforma for accounting purposes only and relates to maximizing the Project’s eligibility for LIHTCs and does not indicate a n actual purchase price. For the purpose of quantifying the cash shortfall in the Project ’s budget, TKE has subtracted the value of the LIHTCs (approximately $32.4 million), the permanent scheduled debt (approximately $13.5 million) and the accounting estimate for land value (approximately $4.4 million) from the Project’s total development cost of approximately $58.9 million. The result is a cash shortfall of approximately $8.6 million. If conventional financing sources were used instead of the preferred ones , the shortfall would be greater.
Therefore, by using the approach described in the preceding paragraph, the financing plan for the Project that includes the required Affordable Units results in a shortfall of approximately $8.6 million, which contributes to a negative land value of approximately $8.6 million. Given that the Site will be solely used for affordable housing purposes, it is the opinion of the undersigned that the estimated value of the interest to be conveyed or leased, determined at highest and best use permitted by the Redevelopment Plan, is a negative value of approximately $8.6 million.
3. Estimated value of the interest to be conveyed or leased, determined at the use and with the conditions, covenants and development costs required by the sale or lease:
The estimated value of the interest to be conveyed or leased, determined at the use and with the conditions, covenants and development costs required by the sale or lease , is a negative value of approximately $8.6 million.
4. The purchase price or sum of the lease payments which the lessor will be required to pay during the term of the lease:
The City anticipates receiving a residual receipts lease revenue from the Project during the 87-year term of the Lease of $1.00 per year for each apartment complex for a total of $174.00.
5. Explanation of the reason (if applicable) why the sales price or lease rate paid to the City may be less than market value of the property as determined at its highest and best use:
As noted above, since the fiscal viability of the Project requires LIHTC funding and private activity bonds for which both funding sources require the Project to provide the Affordable Units (in the mix described above), it is appropriate for this report to assume that the Project’s net operating income will be impaired by the inclusion of the Affordable Units (as described above) within the Project and will affect the residual value of the Site, as further described herein. As more particularly described above, the estimated value of the interest to be conveyed or leased, determined at the use and with the conditions, covenants and development costs required by the sale or lease , is a negative value of approximately $8.6 million.
6. Explanation of why the sale or lease of the property will assist in the elimination of blight:
Although the Site was acquired by the former Rocklin Redevelopment Agency for blight elimination and/or prevention purposes, the Project is an affordable rental housing project that will include attractive design features and amenities that will enhance the general neighborhood it is located 1018
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within, which is anticipated to set a standard for its neighborhood that will contribute to the avoidance of blighting conditions going forward. The AHAs include the requirements that the Developers will follow the City’s normal and customary planning process, including without limitation design review.
Certification: I certify that this report complies with the reporting requirements of HSC § 33433.
Further, I do not have a present or perspective interest in the Site, the Project, or the parties to the AHAs/Leases. My engagement to prepare this amended report was not contingent upon developing or reporting predetermined results. The statements of fact contained herein, and the substance of this report are based on public records, data provided by the City, reports provided by its economics consultant, proformas provided by CHW or as otherwise noted herein. This report reflects my personal, unbiased professional analyses, opinions and conclusions. If any of the underlying assumptions related to the AHAs/Leases change after the date provided below, then the undersigned reserves the professional privilege to modify the contents and/or conclusions of this report.
Respectfully Submitted,
TKE ENGINEERING, INC.
STEVEN H. DUKETT
Managing Director
Development Services
Dated: October 30, 2025
Attachment: Project Plan Map with Legend
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1 4
2 3
1020
Legend
• Numbered Parcels
1. Railroad parcel – City-owned. This
parcel has the restrictions from the
railroad that require it be open to
public use. CHW will construct the
parking lot but the City will own and
maintain it. It is not part of the
ground lease
2. Parcel 2 – City-owned. This section
contains some parking, buildings for
the 4% project including the
amenity buildings, some of the
courtyard, and will include the CHW
parcel once it is transferred to the
City.
3. Parcel 3 – City-owned. This section
contains the 9% project, some of
the courtyard, and no parking
4. The previously owned CHW parcel
that was granted to the City and has
been incorporated into Parcel 2
• Colors
• Yellow areas – These are offsite improvements
that are being completed by the City and will
be constructed in coordination with CHW.
These will provide a total of 25 public parking
spots available to residents (9 to the north
adjacent to Pine and 16 to the west adjacent to
Railroad)
• Purple area – Railroad parcel. Parking open to
residents as well as the public. 97 parking
spaces.
• Blue areas – Project parcels. These will be
included in the ground lease. Includes 28
spaces (including 9 ADA spaces).
• Green areas – Offsite improvements that are
already developed and available for public and
resident parking. 26 total spaces immediately
adjacent to the site. Not included in the ground
lease.
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