Sacramento City Council
November 15, 2022

City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2022-01633 11/15/2022 Consent Item 4.
(City Council) Final Approval of Mirasol Village Block D (Project) Funding Documents File ID: 2022-01633
Location: 475 Pipevine Street, District 4
Recommendation: Adopt 1) a City Council Resolution a) amending the Sacramento Housing and Redevelopment Agency (SHRA) budget to defund $3.3 million in Permanent Local Housing Allocation (PLHA) previously allocated to the Project b) amending the Sacramento Housing and Redevelopment Agency (SHRA) to allocate $3.3 Million of Home Investment Partnership Funds (HOME) for the purpose of construction and permanent financing for the Project, c) authorizing SHRA to execute and transmit an amended loan commitment to Twin Rivers Phase 4, L.P. (McCormack Baron Salazar) or related entity (Developer) for the Project, d) authorizing SHRA to negotiate, enter into, execute and amend from time to time funding agreements comprised of up to $7 million in HOME, MIHF, HTF and HOPWA funds and related documents for the construction and permanent financing of the Project with the Developer and execute other documents, as approved to form by its Office of the General Counsel, and perform other actions required for the HOME, MIHF, HTF, and HOPWA program funds, including without limitation, negotiation, regulatory agreements, financial restructuring, and extensions, consistent with its adopted policy and with this resolution, e) authorizing SHRA to subordinate the HOME, MIHF, HTF, and HOPWA loans to senior loans; and f) authorizing the Executive Director or designee to execute any and all documents deemed necessary by herself or her designee and related to the transaction Contact: La Shelle Dozier, Executive Director, [email protected], (916) 440-1319, Christine Weichert, Director, [email protected], (916) 440-1353, Sacramento Housing and Redevelopment Agency Presenter: Jeree Glasser-Hedrick, Senior Management Analyst, [email protected], (916) 449-6532, Sacramento Housing and Redevelopment Agency
Attachments:
1- Description/Analysis
2-Vicinity Map
3- Project Renderings
4- Project Summary
5- Cash Flow
6- Maximum Income and Rent Limits
7- City Council Resolution
8 - Loan Commitment

File ID: 2022-01633 11/15/2022 Consent Item 4.

Additional Description/Analysis
Issue Detail: In 2015, the Housing Authority of the County of Sacramento (HACOS) and the City of Sacramento (City) were, as co-grantees, awarded a $30 million Choice Neighborhoods Implementation (CNI) Grant from the U.S. Department of Housing and Urban Development (HUD) for the Twin Rivers Transit Oriented Development and Light Rail Station project (Master Development) (Mirasol Village). The Sacramento Housing and Redevelopment Agency (SHRA) is managing the Master Development, and McCormack Baron Salazar (MBS) is the master developer and Housing Lead (Developer) under the CNI grant. The Master Development is now known as Mirasol Village.

The total project area includes six residential blocks and encompasses approximately 26 acres. A vicinity map and project rendering of the Mirasol Village is shown in Attachments 2 and 3.

The CNI grant supports the redevelopment of the former housing development and the transformation of the River District/Railyards neighborhood. The grant requires the replacement of 218 public housing units within a mixed-income development, including housing units, a common area, community gathering spaces, and other amenities.

Mirasol Village is being developed in five phases. The first phase, which includes Blocks B and E (123 units), has construction completed. The second phase is Block A (104 units), and construction is nearly complete. The third phase is Block C (84 units), which is currently under construction and will be completed and occupied in 2024. The Developer has secured the funds needed to construct the fourth phase, Block D (116 units), and the development is scheduled to close in December of 2022.

The fifth phase, Block F, is the block east of 12th Street and will be the last block developed.

History and Status
In March of 2022, staff obtained approval to negotiate and enter into funding agreements for the construction of the Project. Subsequently, the project has secured a bond and 4% tax credits.

Development: Mirasol Village Block D is a new construction housing development composed of a four-story walk-up building with 116 units. The development will contain amenities that include bicycle parking, landscaped courtyards, and a play area. Additionally, residents will have access to the master development site amenities, including management offices, resident community rooms, a fitness center, a business center, a swimming pool, a barbeque area, a community park, and a community garden.

Entitlements: The site plan approval for the Project was received in February 2020, and the building permits are ready to be issued.

Developer: The limited partnership, Twin Rivers Phase 4, L.P. will develop the Project. A McCormack Baron Salazar, Inc. affiliate, Twin Rivers Phase 4, MBS GP, Inc., will serve as administrative general partner of the limited partnership. The Developer is an experienced owner and manager of affordable rental housing projects with more than 40 years of experience in affordable housing and has developed over 21,000 homes in 23 states across the U.S., including 13 communities in California.

They have extensive experience in financing projects with tax credits, tax-exempt bonds, and other

File ID: 2022-01633 11/15/2022 Consent Item 4.
public and private funding sources.

The Sacramento Housing Authority Repositioning Program, Inc. (SHARP) is the managing general partner of the limited partnership and is a non-profit public benefit corporation formed by the Housing Authority to pursue projects as a strategic response to reductions in federal funding sources for public housing. SHARP can attract private development partners and financing sources not otherwise directly available to the Housing Authority.

Property Management: The Project will be managed by the John Stewart Company (JSCo).

Currently, JSCo manages over 620 properties consisting of approximately 47,000 residential units, including approximately 39,000 affordable units and 945 permanent supportive housing units. Agency staff has reviewed JSCo’s qualifications and the management plan and has found that the proposed management company meets Agency requirements.

Resident Services: Resident services will be provided by Urban Strategies, which currently provides resident services to 11 affordable housing communities across the country. Urban Strategies will be required to provide at least 15 hours of services per week for Block D residents. Programs will be tailored to resident needs. SHRA staff has reviewed and approved Urban Strategies’ resident services plan detailing the scope and schedule of services to be provided. Services will be provided by an on-site services coordinator and will include social services and enrichment programs. SHRA will approve subsequent providers of additional services.

Project Financing: The project will be financed with a combination of tax-exempt bonds, tax credit, and a Mixed Income Program Loan from the California Housing and Finance Agency (CalHFA), County American Rescue Plan Funds, Housing Authority Loan, CNI Loan and City loan proceeds.

This staff report does not contemplate any shift in the Agency’sfinancial commitment to the Project outside of the shifting of the Permanent Local Housing Allocation (PLHA) funds and funding to HOME funding. The PLHA funding will be reallocated to a project that has secured funding from the State Department of Housing and Community Development (HCD) given the similar underwriting criteria to PLHA. The more flexible HOME funds will be used with the Project.

Low-Income Set-Aside Requirements: SHRA requires at least 15 percent of the units have rents that are affordable to households with income up to 50 percent AMI, and at least 5 percent of the units have rents that are affordable to households with income up to 30 percent AMI, based on financial feasibility. HUD approved 53 replacement Project- Based Vouchers (PBV) for the public housing replacement units in the Project which are administered by the County Housing Authority.

Project affordability restrictions will be specified in regulatory agreements with the Developer. The Project Summary and Proforma are included as Attachments 4 and 5, and a schedule of Maximum Income and Rent Limits is included as Attachment 6.

Policy Considerations: The recommended actions are consistent with a) SHRA’s approved Multifamily Lending and Mortgage Revenue Bond Policies, adopted on December 3, 2019, b) the 2021-2029 Housing Element, which encourages the provision of a variety of quality housing types to encourage neighborhood stability, including options
for extremely low-income households (Resolution No. 2021-0259); c) the Sacramento Promise Zone Plans and Goals, Sustainably Built Community sub-goal to increase housing types and transit growth

File ID: 2022-01633 11/15/2022 Consent Item 4.

Plans and Goals, Sustainably Built Community sub-goal to increase housing types and transit growth to promote livability and connectivity within the Promise Zone (Resolution No. 2015-263); d) the Downtown Housing Initiative and Initiation of the Downtown Specific Plan, to bring 10,000 places to live to Downtown Sacramento by year 2025 (Resolution No. 2015-282); e) the 2007 Asset Repositioning Strategy of the City and County Housing Authorities; f) the 2013-2019 Consolidated Plan; and g) the River District Specific Plan adopted February 15, 2011.

Economic Impacts: This multifamily residential project is expected to create 373.9 total jobs (211.87 direct jobs and 162.03 jobs through indirect and induced activities) and create $31,158,005 in total economic output ($18,992,745 of direct output and another $12,165,260 of output through indirect and induced activities). The indicated economic impacts are estimates calculated using a calculation tool developed by the Center for Strategic Economic Research (CSER). CSER utilized the IMPLAN input-output model (2009 coefficients) to quantify the economic impacts of a hypothetical $1 million of spending in various construction categories within the City of Sacramento in an average one-year period. Actual impacts could differ significantly from the estimates and neither the City of Sacramento nor CSER shall be held responsible for consequences resulting from such differences.

Environmental Considerations: California Environmental Quality Act (CEQA) and National Environmental Policy Act (NEPA): A combined Initial Study/Environmental Assessment (IS/EA) was prepared for the Mirasol Village (formerly Twin Rivers) Transit Oriented Development and Light Rail Station Project pursuant to CEQA requirements under 14 California Code of Regulations (CCR) §15070, and NEPA requirements under 24 Code of Federal Regulations (CFR) §58.36. The Mitigated Negative Declaration (MND) and associated Mitigation Monitoring and Reporting Program (MMRP) were adopted and a Notice of Determination (NOD) was issued pursuant to CEQA and a Finding of No Significant Impact (FONSI) was prepared pursuant to NEPA. The addition of new federal funds to a previously approved project is considered supplemental assistance and is Categorically Excluded Not Subject to §58.5 pursuant NEPA regulations at to 24 CFR 58.35(b)(7), and is not a project under CEQA. The requested action requires no further environmental review.

Sustainability: The Project has been reviewed for consistency with the goals, policies, and targets of the 2035 General Plan. If approved, the project will advance the following goals, policies, and targets that will directly or indirectly conserve energy resources and reduce greenhouse gas emissions, in part, from the 2035 General Plan: a) Housing Element - Strategies and Policies for Conserving Energy Resources - Climate Action Plan, subsection 7.2: improving the energy efficiency in new buildings; and b) Environmental Resources - Air Quality and Climate Change sub-section 6.1.7:
reduce greenhouse gas emissions from new development, promoting water conservation and recycling, promoting development that is compact, mixed-use, pedestrian friendly, and transit oriented; and promoting energy-efficient building design and site planning.

Commission/Committee Action: Sacramento Housing and Redevelopment Commission: At its November 2, 2022 meeting, the Sacramento Housing and Redevelopment Commission reviewed the staff recommendation for this item. The votes were as follows:

AYES: Morgan, Amanfor, Nunley, Ramos, Ross, Starks, Staajabu, Woo

File ID: 2022-01633 11/15/2022 Consent Item 4.

NOES: None
ABSENT: Griffin, Duncan, Osmany
Rationale for Recommendation: The actions recommended in this report enable SHRA to continue fulfilling its mission to provide a range of affordable housing opportunities in the City and are consistent with the SHRA’sapproved Multifamily Lending and Mortgage Revenue Bond Policies, the City of Sacramento’s 2021-2029 Housing Element, Promise Zone plans and goals, Downtown Housing Initiative and Initiation of the Downtown Specific Plan, and Opportunity Zone.

Financial Considerations: The swapping of PLHA funding for HOME funding will have no financial impact. The Agency loan will have a term of 57 years and a simple interest rate of 3 percent. SHRA will receive an annual fee for monitoring the regulatory restrictions and administration of the loan in the amount of .0125 percent of the loan amount. SHRA will also receive a $100 annual administrative fee for each assisted unit. The total administrative fee will not exceed $15,000 annually for the affordable units during the 57-year term.

Local Business Enterprise (LBE): Local Business Enterprise requirements do not apply to this report. Minority and Women’sBusiness Enterprise requirements and Section 3 will be applied to all activities to the greatest extent feasible and as required by federal funding and in accordance with SHRA’sSection 3 Economic Opportunity Plan. The Developer and general contractor will work with SHRA’s Section 3 Administrator, to promote employment opportunities.

Attachment 2
Attachment 3
M
irasol Village Block D
Project Renderings

Attachment 4
Address
Number of Units
Construction Type
Acreage
Affordability
Unit Mix and Rents¹
30% AMI
(PBV) 60% AMI 80% AMI Exempt
Manager Total
1 Bedroom / 1 Bath 8 7 13 28
2 Bedroom / 1 Bath 23 8 12 1 44
3 Bedroom / 2 Bath 12 20 32
4 Bedroom / 2 Bath 4 8 12
TOTAL 47 43 25 1 116
Square Footage Per Unit Total
1 Bedroom / 1 Bath 619 17,332 sq. ft.
2 Bedroom / 1 Bath 838 36,872 sq. ft.
3 Bedroom / 2 Bath 1,248 39,936 sq. ft.
4 Bedroom / 2 Bath 1,385 16,620 sq. ft.

Common Areas 1,800 sq. ft.

TOTAL 112,560 sq. ft.

Resident Facilities
Permanent Sources
Current Total Per Unit Per Sq Ft
Tax Credit Equity 28,444,890$ 245,215$ 252.71$
Permanent Loan 11,516,945$ 99,284$ 102.32$
CalHFA MIP 5,000,000$ 43,103$ 44.42$
County ARPA Funds 5,000,000$ 43,103$ 44.42$
SHRA Loan 7,000,000$ 60,345$ 62.19$
HACS Loan 3,000,000$ 25,862$ 26.65$
HACOS CNI Loan 1,372,791$ 11,834$ 12.20$
HACOS Ground Lease Loan² 468,000$ 4,034$ 4.16$
Deferred Developer Fee 2,245,974$ 19,362$ 19.95$
TOTAL SOURCES 64,048,600$ 552,143$ 569.02$
Permanent Uses
Ground Lease² 520,000$ 4,483$ 4.62$
Construction 45,701,526$ 393,979$ 406.02$
Permits 1,529,488$ 13,185$ 13.59$
Architecture and Engineering 2,177,943$ 18,775$ 19.35$ Soft Cost Contingency 511,611$ 4,410$ 4.55$
Hard Cost Contingency 2,266,799$ 19,541$ 20.14$
First Mortgage Interest 1,672,225$ 14,416$ 14.86$
Legal 735,000$ 6,336$ 6.53$
Financing Costs 1,247,574$ 10,755$ 11.08$
Operating Reserve 979,667$ 8,445$ 8.70$
Transition Reserve 336,776$ 2,903$ 2.99$
Developer Fee 4,800,993$ 41,388$ 42.65$
Insurance, Third Party, Marketing, Other 1,568,998$ 13,526$ 13.94$ TOTAL USES 64,048,600$ 552,143$ 569.02$
Management / Operations
Proposed Developer:

Property Management Company:

Operations Budget: 725,189$ 6,252$ 6.44$
Property Management 98,614$ 850$ 0.88$
Resident Services: 53,561$ 462$ 0.48$
Security: 74,558$ 643$ 0.66$
Taxes: 89,696$ 773$ 0.80$
Replacement Reserves: 58,000$ 500$ 0.52$
TOTAL 1,099,618$ 9,479$ 9.77$
47 units at or below 30% of AMI (PBV Public Housing Replacement) Mirasol Village Block D
116
New Construction

3.25 acres (141,570 sq. ft.)
475 Pipevine Street Sacramento, CA 95811
Residential Project Summary
Residents will have access the facilities on neighborhooding lots which include a community park, management offices, resident commuity space, a fitness center, swimming pool and BBQ area.
¹Pursuant to 24CFR 983.301, contract rents approved by HUD may exceed the tax-credit rent limits; and the AMI change is due to income averaging regulation by CDLAC. The tenant rent will not exceed 30% of the household adjusted gross income with PBV. ²The Ground Lease Appraised Value is $520,000; 10% will be paid to HACOS at close of escrow and the remaining loan balance will be $468,000. 25 units at or below 80% of AMI
43 LIHTC units at or below 60% of AMI
The John Stewart Company
McCormack Baron Salazar
Mirasol Village Block D (Twin Rivers Phase 4) Area Median Number Square Total Gross Utility Net Net Rent per Total Monthly Current Unit Type Income % (AMI) of Units Feet Sq Feet Rent¹ Allowance Rent Sq Foot Net Rent Annual Rent 1 BD/1 BA (PBV) 30% 8 619 4,952 570$ 76$ 494$ 0.80$ 3,952$ 47,424$ 1 BD/1 BA 60% 7 619 4,333 1,140$ 76$ 1,064$ 1.72$ 7,448$ 89,376$ 1 BD/1 BA 80% 13 619 8,047 1,520$ 76$ 1,444$ 2.33$ 18,772$ 225,264$ 2 BD/1 BA (PBV) 30% 23 838 19,274 612$ 95$ 517$ 0.62$ 11,891$ 142,692$ 2 BD/1 BA 60% 8 838 6,704 1,368$ 95$ 1,273$ 1.52$ 10,184$ 122,208$ 2 BD/1 BA 80% 12 838 10,056 1,823$ 95$ 1,728$ 2.06$ 20,736$ 248,832$ 3 BD/2 BA (PBV) 30% 12 1,248 14,976 790$ 116$ 674$ 0.54$ 8,088$ 97,056$ 3 BD/2 BA 60% 20 1,248 24,960 1,581$ 116$ 1,465$ 1.17$ 29,300$ 351,600$ 4 BD/2 BA (PBV) 30% 4 1,385 5,540 929$ 134$ 795$ 0.57$ 3,180$ 38,160$ 4 BD/2 BA 60% 8 1,385 11,080 1,764$ 134$ 1,630$ 1.18$ 13,040$ 156,480$ 2 BD/1 BA Manager Unit 1 838 838 -$ -$ -$ -$ -$ -$ Totals 116 126,591$ 1,519,092$
¹Pursuant to 24CFR 983.301, contract rents approved by HUD may exceed the tax-credit rent limits; and the AMI change is due to income averaging regulation by CDLAC. The tenant rent will not exceed 30% of the household adjusted gross income with PBV.

Annual 2024 2025 2026 2027 2028 2033 2038 2043 2048
Income Increase Per Unit Year 1 Year 2 Year 3 Year 4 Year 5 Year 10 Year 15 Year 20 Year 25 Gross Potential Rent 2.50% 1,595,996 1,635,896 1,676,793 1,718,713 1,761,681 1,993,180 2,255,101 2,551,439 2,886,719 Other Income 2.50% 6,000 6,150 6,304 6,461 6,623 7,493 8,478 9,592 10,852 Rental Subsidy 2.50% 708,848 726,569 744,733 763,352 782,435 885,254 1,001,583 1,133,200 1,282,112 Less Vacancy 5.00% (80,100) (82,102) (84,155) (86,259) (88,415) (100,034) (113,179) (128,052) (144,879) Effective Gross Income $2,230,744 $2,286,513 $2,343,676 $2,402,267 $2,462,324 $2,785,894 $3,151,983 $3,566,179 $4,034,805 Operating Expenses
Operating Expenses 3.50% 6,344 735,902 761,658 788,316 815,907 844,464 1,002,958 1,191,200 1,414,772 1,680,305 Property Management 3.50% 850 98,614 102,065 105,638 109,335 113,162 134,400 159,626 189,585 225,168 Resident Services 3.50% 462 53,561 55,436 57,376 59,384 61,463 72,998 86,699 102,972 122,298 Security 3.50% 643 74,557 77,167 79,868 82,663 85,556 101,614 120,685 143,336 170,239 Taxes 2.00% 773 89,696 91,490 93,320 95,186 97,090 107,195 118,352 130,670 144,270 Replacement Reserves 0.00% 500 58,000 58,000 58,000 58,000 58,000 58,000 58,000 58,000 58,000 Total Expenses 9,572 $1,110,330 $1,145,816 $1,182,517 $1,220,475 $1,259,734 $1,477,166 $1,734,562 $2,039,335 $2,400,280 Net Operating Income $1,120,414 $1,140,697 $1,161,158 $1,181,792 $1,202,590 $1,308,728 $1,417,421 $1,526,844 $1,634,525 Debt Service amount rate amort
Senior Loan $11,516,945 5.00% 30 741,905 741,905 741,905 741,905 741,905 741,905 741,905 741,905 741,905 CalHFA Monitoring Fee $5,000,000 1.92% 96,000 96,000 96,000 96,000 96,000 96,000 96,000 96,000 96,000 SHRA Monitoring Fee $38,000,000 0.125% 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 Debt Service Subtotal $852,905 $852,905 $852,905 $852,905 $852,905 $852,905 $852,905 $852,905 $852,905 Cash Available after Debt Service $267,509 $287,791 $308,253 $328,887 $349,684 $455,822 $564,515 $673,939 $781,620 Priority Distributions
Limited Partner Management Fee $5,000 3.00% 5,000 5,150 5,305 5,464 5,628 6,524 7,563 8,768 0 Managing General Partner Management Fee $7,500 3.00% 7,500 7,725 7,957 8,195 8,441 9,786 11,344 13,151 0 Administrative General Partner Fee $20,000 3.00% 20,000 20,600 21,218 21,855 22,510 26,095 30,252 35,070 0 Priority Distributions Subtotal 32,500 33,475 34,479 35,514 36,579 42,405 49,159 56,989 0 Net Cash after Priority Distributions $235,009 $254,316 $273,774 $293,373 $313,105 $413,417 $515,356 $616,950 $781,620 Deferred Developer Fee
Principal Balance $2,245,974 1.00% 2,245,974 2,245,974 2,014,117 1,760,485 1,484,717 0 0 0 0 Payment 235,009 254,316 273,774 293,373 313,105 0 0 0 0 Balance $2,033,425 $2,014,117 $1,760,485 $1,484,717 $1,186,459 $0 $0 $0 $0 Net Cash after Deferred Developer Fee $0 $0 $0 $0 $0 $413,417 $515,356 $616,950 $781,620 Investor Cash Flow
Residential NOI after Debt Service, Priority Distributions & Deferred Developer Fee $0 $0 $0 $0 $0 $206,708 $257,678 $308,475 $390,810 CalHFA Loan
Principal Balance $5,000,000 1.92% 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 Interest for Period 96,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 Payment 0 0 0 0 0 38,936 48,536 58,104 73,613
Balance $5,096,000 $5,246,000 $5,396,000 $5,546,000 $5,696,000 $6,365,661 $6,892,210 $7,302,392 $7,628,731 SHRA Loan
Principal Balance $7,000,000 3.00% 7,000,000 7,000,000 7,000,000 7,000,000 7,000,000 7,000,000 7,000,000 7,000,000 7,000,000 Interest for Period 210,000 210,000 210,000 210,000 210,000 210,000 210,000 210,000 210,000 Payment 0 0 0 0 0 54,510 67,951 81,346 103,058
Balance $7,210,000 $7,420,000 $7,630,000 $7,840,000 $8,050,000 $8,987,526 $9,724,694 $10,298,949 $10,755,823 City Housing Authority Loan
Principal Balance $3,000,000 3.00% 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 Interest for Period 90,000 90,000 90,000 90,000 90,000 90,000 90,000 90,000 90,000 Payment 0 0 0 0 0 23,362 29,122 34,863 44,168
Balance $3,090,000 $3,180,000 $3,270,000 $3,360,000 $3,450,000 $3,851,797 $4,167,726 $4,413,835 $4,609,638 SHRA ARPA Loan
Principal Balance $5,000,000 3.00% 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 Interest for Period 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 Payment 0 47,322 58,990 70,619 89,468
Balance $5,150,000 $5,300,000 $5,450,000 $5,600,000 $5,750,000 $6,452,678 $6,931,099 $7,351,192 $7,678,356 County Housing Authority (CNI) Loan
Principal Balance $1,372,791 3.00% 1,372,791 1,372,791 1,372,791 1,372,791 1,372,791 1,372,791 1,372,791 1,372,791 1,367,544 Payment 0 0 0 0 0 38,936 48,536 58,104 73,613
Balance $1,413,975 $1,455,158 $1,496,342 $1,537,526 $1,578,710 $1,704,290 $1,686,757 $1,552,857 $1,334,957 County Housing Authority Ground Lease Loan
Principal Balance $468,000 1.92% 468,000 0 14,040 28,501 43,817 148,350 297,213 546,170 1,044,686 Payment 0 0 0 0 0 3,644 4,543 5,439 6,890
Balance $482,040 $14,040 $28,501 $43,817 $60,448 $174,001 $336,878 $619,330 $1,200,622 Mirasol Village Block D (Twin Rivers Phase 4) Cash Flow ProformaAttachment 5 Attachment 6
Family Size 30% AMI 60% AMI 80% AMI
1 person 21,300$ 42,600$ 56,750$ 2 person 24,330$ 48,660$ 64,850$ 3 person 27,360$ 54,720$ 72,950$ 4 person 30,390$ 60,780$ 81,050$ 5 person 32,850$ 65,700$ 87,550$ 6 person 35,280$ 70,560$ 94,050$ 7 person 37,710$ 75,420$ 100,550$ 8 person 40,140$ 80,280$ 107,000$ 9 person 42,550$ 85,092$ 113,500$ Unit Size 30% AMI 60% AMI 80% AMI
1 Bedroom 570$ 1,140$ 1,520$ 2 Bedroom 685$ 1,368$ 1,823$ 3 Bedroom 790$ 1,581$ 2,107$ 4 Bedroom 929$ 1,764$ 2,351$ Maximum Gross Income Limits
¹Pursuant to 24CFR 983.301, contract rents approved by HUD may exceed the tax-credit rent limits. The tenant rent will not exceed 30% of the household adjusted gross income with PBV.

Mirasol Village Block D (Twin Rivers Phase 4)
Rents at 30%, 60% and 80% of Area Median Income (AMI)
MAXIMUM INCOME AND RENT LIMITS 2022
Low Income Housing Tax Credits, Multifamily Housing Program, Choice Neighborhoods Initiative, HOME, HTF, MIHF, HOPWA, Housing Authority Succesor Agency Funds Maximum Gross Rent Limits¹
RESOLUTION NO. 2022 -

Adopted by the Sacramento City Council

on date of

MIRASOL VILLAGE BLOCK D (PROJECT): AUTHORIZATION TO AMEND THE

SACRAMENTO HOUSING AND REDEVELOPMENT AGENCY (SHRA) BUDGET TO DEFUND $3.3 MILLION IN PERMANENT LOCAL HOUSING ALLOCATION (PLHA) FUNDS AND TO ALLOCATE $3.3 MILLION IN HOME INVESTMENT PARTNERSHIP FUNDS TO THE PROJECT; APPROVAL TO EXECUTE AN AMENDED LOAN

COMMITMENT, FUNDING AGREEMENT AND RELATED DOCUMENTS WITH TWIN RIVERS PHASE 4 L.P. (MCCORMACK BARON SALAZAR) OR RELATED ENTITY;

AND ENVIRONMENTAL FINDINGS

BACKGROUND

A. In 2015, the Housing Authority of the County of Sacramento (HACOS) and the City of Sacramento (City) were, as co- grantees, awarded a $30 million Choice Neighborhoods Implementation Grant from the US Department of Housing and Urban Development (HUD) for the Twin Rivers Transit Oriented Development and Light Rail Station project (Master Development).

B. On December 12, 2017, HACOS and City Council members approved the Master Development Agreement, which includes the Option to Lease (ground lease loans). SHRA is managing the Master Development , and McCormack Baron Salazar is the master developer and Housing Lead (Developer). The Master Development is now known as Mirasol Village. The total project area includes six residential blocks and encompasses approximately 26 acres.

C. On March 16, 2021, City Council approved SHRA and the Developer to apply to the State of California Strategic Growth Council and Department of Housing and Community Development in funding Round 6 for an Affordable Housing and Sustainable Communities grant for up to $30 million, including up to $20 million for the affordable housing development and $10 million for the housing- related infrastructure of the Project. Unfortunately, in January 2022, the Project was not awarded.

D. On December 7, 2021, HACOS and City Council approved the predevelopment loan agreement and construction/permanent loan commitment of up to $2 million in CNI funds for the financing of Mirasol Village Block D (Phase 4).

E. The Developer of the Project applied to SHRA requesting a not to exceed $38 million bond issuance from the Housing Authority and a $15 million gap loan from the City and County for the construction and permanent financing of the Project.

F. In a separate Housing Authority resolution, staff is recommending appr oval of up to $3 million in Housing Authority Funds for the purpose of construction and permanent financing of the Project.

G. On November 2, 2021, the Board of Supervisors (Board) adopted the American Rescue Plan Act (ARPA) Phase One Funding Allocation with Housing as a priority, and SHRA staff is recommending an appropriation of $5 million of ARPA funds for the construction and permanent financing of this Project. On March 8, 2022, the Board will approve a $5 million loan commitment comprised of ARPA funds for the construction and permanent financing of the Project to fill the $15 million gap loan required.

H. On March 8, 2022, the City Council approved funding for the Project which included a Permanent Local Housing Allocation of $3.3 million, a Mixed-Income Housing Fund (MIHF) loan of $1.4 million, and a City Housing Trust Fund (HTF) Loan of $1.4 million, Housing Opportunities for People with Aids (HOPWA) loan of $900,000.

I. On March 16, 2022, the Housing Authority and Developer appl ied to California Debt Limit Allocation Committee (CDLAC) for tax-exempt bonds and to California Tax Credit Allocation Committee (CTCA C) for four percent Low -Income Housing Tax Credits (LIHTC) and received allocations from both Committees. The bonds are required to be issued in December of 2022 and construction is projected to be completed by the fall of 2024.

J. The PLHA funding source has more strict underwriting requirements than the HOME project.

K. The recommended actions are consistent with a) SHRA’s approved Multifamily Lending and Mortgage Revenue Bond Policies, adopted on December 3, 2019 b) the 2021-2029 Housing Element, which enc ourages the provision of a variety of quality housing types to encourage neighborhood stability, including options for extremely low-income households (Resolution No. 2021-0259); c) the Sacramento Promise Zone Plans and Goals, Sustainably Built Community sub-goal to increase housing types and transit growth to promote livability and connectivity within the Promise Zone (Resolution No. 2015-263); d) the Downtown Housing Initiative and Initiation of the Downtown Specific Plan, to bring 10,000 places to live to Downtown Sacramento by year 2025 (Resolution No. 2015- 282); e) the 2007 Asset Repositioning Strategy of the City and County Housing Authorities; f) the 2013- 2024 Consolidated Plan (Resolution No. 2019- 0408), 2020 Action Plan (Resolution No. 2019- 0408), and 2021 Action Plan (Resolution No. 2020- 0350); and g) the River District Specific Plan adopted February 15, 2011.

L. A combined Initial Study/Environmental Assessment (IS/EA) was prepared for the Mirasol Village (formerly Twin Rivers) Transit Oriented Development and Light Rail Station Project pursuant to California Environmental Quality Act (CEQA) requirements under 14 California Code of Regulations (CCR) §15070, and National Environmental Policy Act (NEPA) requirements under 24 Code of Federal Regulations (CFR) §58.36. The Mitigated Negative Declaration (MND) and associated Mitigation Monitoring and Reporting Program (MMRP) were adopted and a Notice of Determination (NOD) was issued pursuant to CEQA and a Finding of No Significant Impact (FONSI) was prepared pursuant to NEPA. The addition of new federal funds to a previously approved project is considered supplement al assistance and is Categorically Excluded Not Subject to §58.5 pursuant NEPA regulations at 24 CFR 58.35(b)(7), and is not a project under CEQA. The requested action requires no further environmental review.

BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:

Section 1. All evidence presented having been duly considered, the findings, including environmental findings regarding this action, as stated above, are found to be true and accurate and are hereby approved adopted.

Section 2. SHRA is authorized to amend its budg et to defund $3.3 million of Permanent Local Housing Allocation (PLHA funds from the Project ) and replace it with an allocation of $3.3 million in Home Investment Partnership Funds to the Project for the purpose of construc tion and permanent financing of the Project.

Section 3. The Amended Conditional Loan Commitment attached hereto as Exhibit A for the purpose of construction and perm anent financing for the Project reflecting the removal of PLHA fund and the addition of HOME funds (Amended Commitment) is approved, and SHRA is authorized to execute and transmit the Amended Commitment to Twin Rivers Phase 4, L.P. (McCormack Baron Salazar) or related entity (Developer) for the Project.

Section 4. SHRA is authorized to negotiate, enter into, execute and amend from time to time funding agreements and related documents for the construction and permanent financing of the Project with the Developer and execute other documents, as approved to form by its Office of the General Counsel (Counsel), and perform other actions required for the HOME program funds HOPWA funds, HTF funds, MIHF funds , including without limitation, negotiation, subordination, regulatory agreements, financial restructuring, and extensions, consistent with its adopted policy and with this resolution.

Section 5. SHRA finds that an economically feasible alternative method of financing on substantially comparable terms and conditions, without subordination, is not available. Therefore, SHRA is authorized to subordinate the HOME, HOPWA, HTF, and MIHF loans to senior loans.

Section 6. This resolution shall take effect immediately upon its adoption.

Table of Contents:

Exhibit A: Conditional Loan Commitment

November 2, 2022

Hillary B. Zimmerman, Vice President
720 Olive Street, Suite 2500
St. Louis, Missouri 63101

Re: Amended Conditional Funding Commitment for Mirasol Village Block D (Phase 4)

Dear Mr. Falcon:

On behalf of the Sacramento Housing and Redevelopment Agency (SHRA), Housing Authority of the City of Sacramento (HACS) and Housing Authority of the County of Sacramento (HACOS), collectively “Agency,” we are pleased to advise you of its amended commitment of acquisition, construction and permanent funding (Funds) in an amount not to exceed $16,840,791 in program funds described in the chart below for the purpose of financing the development of that certain real property known as Mirasol Village Block D (Phase 4) (Project) located 1381 Swallowtail Ave, Sacramento, California (Property) (Commitment).

PROGRAMS FUNDS NOT TO EXCEED

AMOUNTS
SHRA County American Rescue Plan Act (ARPA) Funds $ 5,000,000 SHRA City Permanent Local Housing Allocation (HOME) Loan $ 3,300,000 HACS Housing Authority Funds (HAF) Loan $ 3,000,000
HACOS Choice Neighborhoods Implementation (CNI) Loan $ 1,372,791 SHRA Mixed Income Housing Funds (MIHF) Loan $ 1,400,000 SHRA City Housing Trust Funds (HTF) Loan $ 1,400,000
SHRA Housing Opportunities for Persons With AIDS (HOPWA) Loan $ 900,000 HACOS Ground Lease Loan (90% of the current appraised value of the land) $ 468,000 TOTAL FUNDS $ 16,840,791

The Agency's decision is based on representations and information supplied by McCormack Baron Salazar, Inc. in its capacity as Housing Lead and Master Developer. If these representations and information change in a material manner without written approval of the Agency, this Amended Commitment is void. Agency's obligation to make the Amended Commitment is subject to the satisfaction of all the following terms and conditions and Borrower's execution of documentation that is in a form and in substance satisfactory to the Agency. This Amended Commitment supersedes previous funding commitments associated with CNI and ground lease loans.

The Funds shall be made on standard Agency loan documents. Funding terms not included in this funding commitment shall be included in the final loan documents without additional environmental review and governing board approval. In the event of any discrepancies between terms stated in this Amended Commitment and the loan documents, the terms stated herein shall be deemed to be terms of this Commitment.

Unless otherwise agreed in writing by the Agency in exercise of its absolute discretion, the following shall be considered conditions to Agency approval of a financing commitment. The Agency may, in

Sacramento Housing & Redevelopment Agency 801 12th Street, Sacramento CA 95814 (916) 444-9210 | TTY 711 or 1 (800) 855-7100 | www.shra.org

exercise of its absolute discretion, modify its requirements upon written notice to Borrower given at least sixty (60) days prior to close of escrow for the Property.

This Amended Commitment will expire September 30, 2023 or extended upon mutual agreement.

1. PROJECT DESCRIPTION: Twin Rivers (Mirasol Village) Phase 4 is a new construction, mixed-income housing development. The Project is the fourth phase of development for the multi-phased, Twin Rivers public housing redevelopment project. The Project will consist of a total of five residential buildings that will include a minimum of 116 rental housing units. The housing units will be 1-4 bedrooms in size and include a minimum of 47 replacement housing units in accordance with the HUD-approved replacement housing plan for the Project. The Project will also contain several outdoor amenities including tot lots, barbeque areas, and bike or car share.

2. BORROWER: The name of the Borrower for the Loans is Twin Rivers Phase 4, L.P., a California limited partnership with McCormack Baron Salazar, Inc., or related entity as the lead development partner.

3. PURPOSE OF LOAN: The Loan is to be used by Borrower and/or Grantee solely to pay the costs of acquisition, construction and permanent financing/funding of the Project and for such other purposes as Agency expressly agrees to in the loan agreement for the Funds, as well as in such other agreements as may be generally required by the Agency for the use of the Funds.

4. PRINCIPAL AMOUNT: The principal amount of the Funds will be a maximum of Sixteen Million Eight Hundred Forty Thousand Seven Hundred Ninety-One Dollars and No Cents ($16,840,791.00) or such lesser amount as may be needed and as determined by Borrower and approved by Agency prior to close of the Funds.

5. TERM OF FUNDS: The loans shall mature up to 57 years or 684 months from the date of closing construction financing, at which point any and all unpaid principal and interest on the loan will be due and payable. Final maturity date will be determined by impact of terms and conditions of other sources of financing approved for the Project. The ARPA funds loaned must must be expended by December 31, 2026, at which point any and all undisbursed loan proceeds will be recaptured by the Agency.

6. INTEREST RATE: The loans will bear simple interest at three percent (3%) per annum. Interest shall be calculated on a 365-day year, actual days elapsed basis. With the exception of the Ground Lease Loan, which will be the Applicable Federal Rate.

7. ANNUAL REPAYMENT: Annual payments will be made on a Residual Receipts, as defined below, basis until the maturity date. Annual payments shall be applied first to outstanding interest accrued and unpaid and then to principal. All outstanding principal and interest is due and payable on the maturity date. Notwithstanding the preceding payment schedule, no payments shall be required on the loans until the full balance of principal and interest on the proposed capitalized ground lease made by the Housing Authority of the County of Sacramento to Borrower pursuant to the Master Development Agreement is paid in full.

“Residual Receipts” is defined as follows: Annual installments (as described in Section [d] of this paragraph) are based on the annual audited financial statement from the preceding year, payments will be made upon a “Residual Cash Flow” basis meaning Net Operating Income (NOI) less: (a) Priority Distributions, which means $20,000 Administrative General Partner management fee,

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$7,500 Managing General partner management fee, and $5,000 Limited Partner asset management fee, all escalating at 3% annually as of the Loan’s Effective Date; (c) Deferred Developer Fee; (d) fifty percent (50%) of the available cash flow from NOI to Borrower; (e) after Sections (a) through (d) of this paragraph are paid, the proportional share of California Housing Finance Authority’s (CalHFA) public assistance towards loan repayment to CalHFA; and (f) after Sections (a) through (e) of this paragraph are paid, the proportional share of the Agency’s public assistance towards repayment on the Agency’s loans.

The Net Operating Income is defined as periodic “Revenue” less “Operating Expenses.” “Revenue” means all revenue from the leasing of the Project, including but not limited to all rents, fees, and charges paid by tenants as well as rental subsidy payments regardless of the source of these subsidies, forfeited tenant deposits, rent increases, proceeds from vending machines and laundry room machines. Revenue shall not include tenants’ security deposits (unless forfeited), interest on those deposits, loan proceeds, capital contributions or similar advances, or amounts released from reserves or interest on reserves.

“Operating Expenses” shall mean actu al costs, fees and expenses as evidenced by invoices attributable to the operation, recordkeeping, maintenance, taxes and management of the Project, including property management fees; taxes and assessments; payroll, benefits and payroll taxes of for prope rty employees; insurance; security; painting, cleaning, repairs, and alterations; landscaping; sewer charges; utility charges; advertising, promotion and publicity; cable television, satellite and other similar services; office, janitorial, cleaning and bu ilding supplies; recreational amenities and supplies; purchase, repair, servicing and installation of appliances; costs and expenses associated with the provision of resident and supportive services to the tenants of the Project; equipment, fixtures and furnishing; fire alarm and elevator monitoring; fees and expenses of accountants, attorneys, consultants and other professionals. The definition will include deposits into operating and/or replacement reserves maintained by the Borrower.

8. SOURCE OF FUNDS:

Agency is making the loans from the ARPA, PLHA, HAF, CNI, HTF and HOPWA funding programs and ground lease, and is subject to all of the requirements related to the use of these program funds, whether Agency requirements or otherwise. This Amended Commitment is conditioned upon Borrower’s acceptance of Agency requirements and conditions related to its lending and/or granting programs and funding sources, including among others the required forms of agreements for the Funds; the requirements for covenants, conditions and restrictions upon the Property; and insurance and indemnity requirements.

Borrower acknowledges that, as a condition of the Agency’s making of the Funds, the Property will be subject to restrictions on future sales and rentals which may result in less income to Borrower than could otherwise be realized, and that such restrictions run with the land, and during their operational term, will bind all successors in interest.

___________ (Borrower Initial)

9. ACCELERATION: Agency shall have the right to accelerate repayment of the loans in the event of a default under any loan document or upon sale, transfer or alienation of the Property except as specifically provided for in the loan documents.

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10. SECURITY: The loans shall be evidenced by promissory note(s) secured by a deed of trust with assignment of rents against the fee and/or leasehold interest in the Property and Improvements, which shall be a lien upon the Property and Improvements subject only to additional liens senior to the Agency’s lien securing loans needed for the Project and such other liens or items as the Agency may approve in writing prior to close. The loans shall also be secured by security agreements where required. The Agency may agree to subordinate said deed of trust in order to accommodate completion of construction of the Project.

11. LEASE AND RENTAL SCHEDULE: All leases of the Property and Improvements shall be subject to Agency review and approval prior to execution. Borrower shall not deviate from the rental schedule presented in Borrower's application for the Funds without Agency's prior written approval provided, however, that such approval shall not be required for annual adjustments to rental rates as permitted by the California Tax Credit Allocation Committee.

12. PROOF OF EQUITY: Borrower shall provide proof of equity for the Property and Improvements in the amount of no less than stated in Borrower’s request for the Funds. Proof of equity will generally be in the form of verified low income housing tax credit equity and deferred developer fee. If the final equity contribution is less than that as anticipated, the difference in equity must be offset by an increase in the deferred developer fee.

13. OTHER FINANCING: Borrower, as a requirement of the Funds, shall procure and deliver to Agency evidence satisfactory to Agency that Borrower has obtained the following described financing which may be secured by a lien upon the Property and Improvements superior or subordinate to Agency's liens, and which shall be otherwise on terms and conditions acceptable to Agency:

(a) As a condition precedent to disbursement of the Agency loans, construction financing from private lender(s) in an amount(s) sufficient to complete construction of the Project according to a Scope of Work as approved by Agency (Construction Financing). The term of Construction Financing must not be less than that specified in the Schedule of Performances for completion of construction and in any event not less than the time necessary to fulfill all conditions precedent to funding of the permanent financing. (b) Amended Commitments for permanent financing sufficient to “take out” all Construction Financing liens senior to the Agency’s lien.
(c) Such commitments for construction and permanent financing shall not require modification of Agency loan documents, or any term of this commitment letter. (d) Such commitments shall not be based upon sources and uses of Project funds that are different from those approved by Agency for the project or be subject to conditions which require amendment of Agency documents or other agreements.

14. EVIDENCE OF FUNDS: Prior to the first disbursement of the Funds, Borrower must demonstrate evidence of adequate and assured funding to complete the development of the Project in accordance with the Agency's requirements. Borrower's evidence of available funds must include only one or more of the following: a) Borrower equity; b) firm and binding commitments for the Project from financial institution(s) or from other lender(s) approved by Agency in its absolute discretion; and c) Agency’s contribution, provided, however, that Agency is not obligated by this letter to make any contribution not stated in the terms of the letter.

15. SOILS AND TOXIC REPORTS: Borrower will submit to the Agency a hazardous substances report made in accordance with the American Society for Testing and Materials "Standard

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Practice for Environmental Site Assessments; Phase I Environmental Site Assessment Process" (Designation E1527-13) prepared by a licensed or registered environmental engineer or other qualified party prior to close of escrow. Borrower must, as a condition of disbursement of the Funds, give assurances satisfactory to the Agency that hazardous materials are not present on the Property or that any hazardous materials on the Property will be remediated and that no further remediation is then required by the environmental agency having responsibility for monitoring such remediation.

16. FUNDS IN BALANCE: Borrower will be required to maintain the Funds "in balance" at all times. The Funds is "in balance" whenever the amount of the undisbursed Funds, the remaining sums to be provided by the Borrower and the Funds from other project lenders or the equity investor are sufficient, in the sole judgement of the Agency, to pay for the remainder of the work to be done on the project as required by written agreement with the Agency. Should the Agency determine that the Funds are not "in balance" the Agency may declare the Funds to be in default.

17. PLANS AND SPECIFICATION: Final plans and specifications, if any, for the project must be in accord with the approved proposal. Final plans and specifications will be subject to Agency's final approval prior to the disbursal of Agency Funds. Borrower must obtain Agency's prior written consent to any change in the approved plans and specifications or any material deviation in construction of the project. The final plans shall incorporate all related mitigation measures as required in the Mitigation Monitoring and Reporting Program of Twin Rivers (Mirasol Village) Transit Oriented Development and Light Rail Station Project as may applicable to Twin Rivers (Mirasol Village) Phase 4, environmental conditions required, if any, for compliance with approvals under CEQA, and/or NEPA, or the U.S. Department of Housing and Urban Development as conditions of approval of the project.

18. ARCHITECTURAL AGREEMENT: The architectural agreement (Agreement), if any, for the preparation of the plans and specifications and other services shall be subject to Agency's approval. Agency may require an assignment of Borrower's interest in and to the Agreement as security for the Funds.

19. CONSTRUCTION CONTRACT: The construction contract (Contract), if any, and any change orders issued thereunder, and the contractor (Contractor) to be retained by Borrower to construct the Improvements shall be subject to Agency's approval. Agency may require an assignment of Borrower's interest in and to the Contract as security for the Funds. Agency may require Contractor to provide a performance and payment bond in a form acceptable to Agency for the amount of the Contract.

20. RETENTION AMOUNT: The Agency shall retain ten percent (10.0%) of each construction disbursement as retention, not to exceed a total of ten percent (10.0%) of the total amount of the loan.

21. COST BREAKDOWN: Borrower shall deliver to Agency for Agency's approval prior to commencement of work a detailed cost breakdown of the cost of constructing, financing and other costs of developing the Project, which breakdown conforms to the project plans and specification and the approved budget for the Project. Borrower shall also deliver a list of all contractors and subcontractors to be employed in connection with the construction of the Improvements. If required by the Agency, Borrower shall also submit copies of all bids received for each item of work to be performed as well as copies of executed contracts and subcontracts with acceptable bidders.

Sacramento Housing & Redevelopment Agency 801 12th Street, Sacramento CA 95814 (916) 444-9210 | TTY 711 or 1 (800) 855-7100 | www.shra.org

All contracts, subcontracts, contractors, and subcontractors shall be subject to Agency's approval prior to close of escrow. Agency also reserves the right to require performance and material payment bonds on any or all contractors, or in lieu of bond a letter of credit acceptable to Agency.

Agency shall make disbursements of the Funds based on a cost breakdown that lists line items in cost categories. Agency shall require that Borrower provide documentation supporting all requests for disbursement of Funds, including proof of work done and actual expenditure.

Agency shall conduct inspections of the Property to assure that the work was done before making a disbursement.

22. COST SAVINGS: At completion of construction, Borrower shall submit to Agency a cost certification prepared by a qualified, independent auditor acceptable to Agency which shall indicate the amounts actually spent for each item in the cost breakdown and shall indicate the final sources of funding. If there is an aggregate savings, in the total of all such cost breakdown items from the cost breakdown items in the original budget approved by the Agency, after adjusting for any decrease in any funding source including any loss of any equity investment due to an adjustment in the allowable tax credits, the Agency shall withhold for itself fifty percent (50%) of such savings from the amount of retention then held by the Agency and the Funds balance shall be reduced by the amount so withheld. The Agency, in its sole discretion, shall determine any reduction and/or repayment of the Agency Funds based upon this cost certification and the original approved budget for the project.

23. START OF CONSTRUCTION: Borrower shall commence construction at the earliest possible date subject to the conditions of this Agency and other involved lenders, but no later than sixty (60) days following the close of construction financing.

24. COMPLETION OF CONSTRUCTION: Borrower shall complete the construction of the Improvements no later than 24 months following the close of construction financing.

25. SECURITY CAMERAS AND OUTSIDE LIGHTING: Project shall include installation of a security camera system, exterior lighting, and security patrols, all as approved by the Agency.

26. INSURANCE PROVIDER: Each policy of insurance required under the Funds shall be obtained from a provider licensed to do business in California and having a current Best's Insurance Guide rating of A VII, which rating has been substantially the same or increasing for the last five (5) years, or such other equivalent rating, as may reasonably be approved by Lender's legal counsel.

27. HAZARD INSURANCE: Borrower shall procure and maintain fire and extended coverage insurance and during construction Builder's Risk completed value insurance in a form and substance approved by Agency. Coverage shall be for protection against loss of, or damage to the Improvements or materials for their construction to their full insurable value. Borrower shall also procure and maintain insurance against specific hazards affecting Agency's security for the Funds as may be required by Agency, governmental regulations, or any permanent lender. All such policies shall contain a standard mortgagee loss payable clause in favor of Agency. The insurance required shall be written with a deductible of not more than TWENTY-FIVE THOUSAND DOLLARS ($25,000.00).

28. PUBLIC LIABILITY AND OTHER INSURANCE: Borrower must procure and maintain public liability and property damage insurance (with Agency named as additional insured) in a form approved by Agency. Coverage must be approved by Agency and must be in at least the following limits of liability: (1) Commercial General Liability insurance in Insurance Services

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Office (ISO) policy form CG 00 01 Commercial General Liability (Occurrence) or better with limits of liability, which are not less than $1,000,000, per occurrence limit; $5,000,000 general aggregate limit, and $5,000,000 products and completed operations aggregate limit, all per location of the Project; (2) Property damage liability of $1,000,000 each occurrence, $1,000,000 single limit and $1,000,000 aggregate; (3) Contractual liability for Bodily Injury of $1,000,000 each occurrence, for Property Damage of $1,000,000 each occurrence and $1,000,000 aggregate, and Personal Injury with Employment Exclusion Deleted of $1,000,000 aggregate; and (4) Comprehensive Automobile Liability for any vehicle used for or in connection with the Work of $1,000,000. The insurance required shall be written with a deductible of not more than TWENTY-FIVE THOUSAND DOLLARS ($25,000). Borrower must also procure and maintain workers' compensation and all other insurance required under applicable law, as required by law and as approved by Agency.

29. TITLE INSURANCE: Borrower must procure and deliver to Agency an ALTA Lender's Policy of Title Insurance, together with such endorsements as Agency may require, including but not limited to CLTA endorsement nos. 100, 116, and 102.5/102.7 insuring Agency in an amount equal to the principal amount of the Funds, that Agency's Deed of Trust constitutes a third lien or charge upon the Property and Improvements subject only to such items as shall have been approved by Agency. There must be no exceptions permitted for mechanic’s liens. Title insurance for the Funds must be issued by a title insurer approved by Agency.

30. ORGANIZATIONAL AGREEMENTS: Borrower must submit to Agency certified copies of all of Borrower’s organizational documents, including all amendments, modifications or terminations: if a corporation, Borrower's Articles of Incorporation and By-Laws; if a partnership, its Partnership Agreement and, as applicable, Certificate of Limited Partnership or Statement of Partnership; if a Limited Liability Company, its Articles of Organization and its Operating Agreement; and in all cases with all exhibits and amendments to such documents, fictitious business name statements, other related filings or recorded documents and such related documents as Agency may request. If it is a corporation, Borrower must submit a corporate borrowing resolution referencing these Funds. If Borrower is other than a corporation, Borrower must submit such proof of authority to enter the Agency loan documents as may be required under the organizational documents.

31. PURCHASE OR LEASE OF PROPERTY: Borrower shall provide Agency with copies of all documents relating to Borrower's ownership interest in the Property.

32. FINANCIAL INFORMATION: During the term of the Funds, Borrower shall deliver to Agency within 120 days of the end of each fiscal year an audited income and expense statement, a balance sheet, and a statement of all changes in financial position signed by authorized officers of Borrower. Prior to close of the Funds and during its term, Borrower must deliver to Agency such additional financial information as may be requested by Agency. Agency reserves the right to review and approve financial statements and other credit information and references prior to closing. During the term of the Funds, Borrower must deliver to Agency a monthly rent-roll including household composition information and operating statements with respect to the Property management, as Agency may request.

33. MANAGEMENT AGREEMENT: Prior to execution, Borrower must submit to Agency any agreement providing for the management or operation of the Property or Improvements by a third party which agreement is subject to Agency Approval.

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34. RESIDENT SERVICES AGREEMENT: Prior to execution, Borrower must submit to Agency an agreement providing for the resident services by a third party which agreement is subject to Agency Approval. The agreement must include on-site resident services according to the following minimum schedule of twenty (20) hours per week:

a. Coordinator: Six (6) hours per week (maximum)
b. After School Programming: Eight (8) hours per week (two hours per day and four days per week, minimum)
c. Additional Programming: Balance of minimum six (6) hours per week shall include, but are not limited to:
i. Workforce development support and activities.
ii. Education classes such as nutrition, exercise, health resources, health insurance application assistance, Annual onsite health fair and ESL classes. iii. Socialization activities such as bingo, gardening and community building events. iv. Other services such as transportation assistance, counseling assistance and employee readiness and job search assistance.

35. LOW INCOME HOUSING TAX CREDITS (LIHTC): Borrower represents that as a condition of closing on the Funds, it is applying for an allocation of LIHTC’s and agrees to perform all actions and meet all requirements to maintain the LIHTC allocation if granted.

36. SMOKE-FREE ENVIRONMENT: 100% of the buildings and units must be smoke free (including all forms of smoking that create secondhand smoke that impacts the health of nonsmokers). In addition, all indoor common areas must be smoke-free. Clearly-marked designated smoking areas must be provided.

37. DOCUMENTATION: This letter is not intended to describe all of the requirements, terms, conditions and documents for the Funds, which shall also include customary provisions and documents for an Agency transaction of this type. All documents to be delivered to or approved by Agency must be satisfactory to Agency in all respects. Borrower must promptly deliver to Agency any further documentation that may be required by Agency.

38. CONSISTENCY OF DOCUMENTS: As a material obligation under this commitment letter, Borrower shall assure that the loan documents for the Project are consistent with lender's commitment approved by the Agency and comply with same.

39. CHANGES OR AMENDMENTS: No documents or contracts which are to be delivered to Agency or are subject to Agency's review or approval shall be modified or terminated without the prior written approval of Agency.

40. ACCEPTANCE OF THIS AMENDED COMMITMENT: Borrower’s acceptance of this Commitment shall be evidenced by signing and delivering to Agency the enclosed copy of this letter. Until receipt of such acceptance by Agency, Agency shall have no obligation under this letter. Agency may withdraw this commitment at any time prior to Borrower’s acceptance.

Sacramento Housing & Redevelopment Agency 801 12th Street, Sacramento CA 95814 (916) 444-9210 | TTY 711 or 1 (800) 855-7100 | www.shra.org

Sincerely,

_________________________________
La Shelle Dozier, Executive Director

The undersigned acknowledges and accepts the foregoing Commitment and its terms and conditions.

BORROWER:

Twin Rivers Phase 4 L.P., a California limited partnership By: Twin Rivers Phase 4 MBS GP, Inc., a California corporation

By: _________________________________
Hillary B. Zimmerman, Vice President

Attachment:

Exhibit 1 - Scope of Development and Rental Property Minimum Construction Standards

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Exhibit 1: Mirasol Village Block D – Scope of Development

Project Summary: Mirasol Village Block D is composed of four three-story garden-style walk- ups, and one four-story building serviced by elevators. There is a total of 5 buildings in the phase and 58 on-grade parking spaces.

Mirasol Village Block D is the fourth phase of a master plan, mixed-income housing development located at 475 Pipevine Street. The proposed development will replace the existing public housing development in this area, and the final project development will include 427 apartment units, with 116 units in this phase. All off -site infrastructure and the adjacent right - of-way improvements will be constructed under a separate contract. The project will be designed to secure a Green Point Rated Certification. The development will be a vibrant new addition to the neighborhood and help encourage future improvements and development.

Additional master plan site amenities include property management offices for the entire community, resident community space / community room, a fitnes s center for residents, a business center with Wi-Fi, computers and printers, a swimming pool and a barbeque area. All buildings are slab on grade wood frame construction with entrances and windows overlooking streets. Putting eyes on the street are part o f a safe design strategy. Parking spaces are located behind buildings and there is additional open space for resident amenities, including playgrounds and the feeling of private green space. The buildings will be built to the latest TCAC Sustainable Building Methods standards.

A. Site:

1. New construction of 5 new buildings: 4 three-story garden-style apartments and 1 four - story apartment building. All the buildings will be Type V wood construction, with some concrete and/or steel at the ground-level of the four-story buildings.

2. All adjacent streets will be in place prior to completion of Block D and are under a separate contract.

3. There will be an accessible path of travel into each building, the parking area, and all common area amenity spaces.

4. The parking lot shall be constructed by a combination of pervious concrete paving at the parking spaces and asphalt paving at the drive aisles. The parking lot shall be striped completely, identifying all parking spaces, ADA spaces, pedestrian pathways, and other potential hazards. Bicycle parking will be available.

5. Site amenities will include a school-age appropriate playground and landscaped area with picnic tables and benches.

6. The site will have pervious pavement and on-site drainage retention to accommodate all site drainage requirements in addition to all of the adjacent ROW.

7. New vehicular driveways access to the surface parking lots will be constructed as part of the infrastructure contract.

8. New landscaping throughout the project, including both along the new and existing streets and internally within the block. The landscaping and street design will serve to create a walkable neighborhood that encourages physical activity. Drought tolerant trees will be included and a smart controller with a drop system will be used for irrigation.

9. The entire site will have a decorative 6ft tall, wrought iron picket fence off -set well beyond the property line, towards the back of the buildings. The goal is to secure the site

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without the feel of being fenced in.

10. The fence will have several pedestrian and vehicular access points throughout the site with access control. Only residents will have access to parking within the site, all visitors will park on the street.

11. Each building will have controlled access as will each of the common area amenity spaces.

12. Web-based CCTV will be provided with cameras covering primary ingress/egress points to the site; principal parking areas; and indoor/outdoor common areas. Site lighting shall be provided at all parking and outside public spaces and shall be of LED or similarly energy efficient type.

13. A minimum of one trash enclosure will be provided at each Block D. Trash enclosures will be constructed out of concrete block and metal gates with a concrete apron in front.

They will include separate recycling and trash receptacles within the same enclosure.

The trash enclosure will be completely accessible.

14. There will also be some shading elements on the residential buildings and outdoor amenity areas.

15. There will be mailboxes located on Block D for its respective residents.

B. Building Exteriors:

The exterior building materials will be a combination of stucco and fiber cement siding.

C. Parking:

Block D will include a surface parking lot at the interior of the parcel, with approximately 58 spaces. Each lot will have required accessible parking as well as the infrastructure for electrical vehicle charging and outdoor bicycle parking.

D. Tenant Units:

BDRM Size Type Number of Units
One Elevator 16
One Walkup 12
Two Elevator 44
Three Elevator 24
Three Walkup 8
Four Walkup 12
TOTAL 116

1. Appliances: All units will be equipped with a washer/dryer. All kitchens shall have refrigerator/freezer, dishwashers, stove/oven, and micro -hoods in non -accessible units and microwave shelves built into lower cabinets in ADA units. All appliances will be Energy Star, where applicable. Each unit will have garbage disposals.

2. Electrical: All units will have smoke/carbon monoxide detectors installed per current

Sacramento Housing & Redevelopment Agency 801 12th Street, Sacramento CA 95814 (916) 444-9210 | TTY 711 or 1 (800) 855-7100 | www.shra.org

code.

3. Doors: All exterior doors shall have deadbolt locks, keyed latch assemblies and viewers.

The tenant units’ entry doors shall have single action hardware to release deadbolt and latch assembly.

4. Windows: New dual -paned (at a minimum) window with screens will be installed throughout. Window coverings will be provided on all windows.

5. Flooring: All units will have Luxury Vinyl Plank (LVP) throughout with a minimum wear layer of 12 mils. Bathrooms will be sheet vinyl. All common areas will be LVP.

6. Cabinets, Counters: All kitchen and bathroom cabinets will have plywood boxes with solid face frames, doors, and drawer faces. All kitchens and bathrooms will have solid surface countertops.

7. Lighting: Units will have new LED lighting throughout.

8. Finishes: All unit interiors will have level 4 drywall finish.

9. Plumbing Fixtures: Bathrooms shall have low-flow, water-efficient fixtures.

10. Bathrooms: Bathrooms shall be fully equipped with accessories including towel bars, toilet paper dispensers and mirrors. All countertops shall be solid surface. Tub surrounds will be of fiberglass.

11. Hallways: The hallways on the upper floors of the 4-story building and garden-style buildings will be Luxury Vinyl Tile (LVT).

12. Accessible Units: There will be the TCAC-required number of fully accessible units and audio/visual accessible units.

E. Community Areas:

1. On-site Management: On-site Property Management will be located on Block A.

2. Community/Management Spaces: There will be approximately 1,800SF of common area space for residents to enjoy. Additional community space, including club house, multipurpose rooms, gym and swimming pool, will be located on Block A.

3. Resident Services: Resident Services will be located on Block A.

4. Elevators and Stairs: The four -story buildings will have an elevator and enclosed stairways. Each of the three -story walk-up buildings will have an internal stair serving all three floors. Stairways will include closed risers and non-slip concrete finish or other slip-resistant material on the treads.

Attachment 1: Rental Property Minimum Construction Standards are on the following page.

Sacramento Housing & Redevelopment Agency 801 12th Street, Sacramento CA 95814 (916) 444-9210 | TTY 711 or 1 (800) 855-7100 | www.shra.org

Attachment 1: Lender’s Minimum Construction Standards
This attachment is from Exhibit 2 from the Lender’s Multifamily Lending and Mortgage Revenue Bond Policies.

RENTAL PROPERTY MINIMUM CONSTRUCTION STANDARDS
The following is a list of the required minimum construction standards that must be incorporated into projects participating in SHRA’s Multifamily Financing and/or Mortgage Revenue Bond programs. All rental units and sites associated with these projects must meet or exceed these standards. Exceptions to these standards may be made for properties subject to U.S. Department of Housing and Urban Development replacement reserve requirements that allow for renovation over time rather than at recapitalization (e.g., Rental Assistance Demonstration conversions for conventional public housing).

Note: For rehabilitation projects, all of the following standards shall apply. The non-rehabilitation sections below shall apply to new construction projects.

Useful Life Expectancy – Rehabilitation only
SHRA shall reference the current edition of FannieMae’s “Instructions for Performing a Multifamily Property Condition Assessment, Appendix F. Estimated Useful Life Tables” in determining the useful life for all building components and systems located within the project. A remaining useful life of 15 years or more is required for all building components and systems located within the approved complex. All items on the FannieMae tables with useful lives indicated to be less than 15 years shall be replaced.

General Requirements
A. All materials funded under this loan must be new unless previously approved. Recycled items must be approved in writing by SHRA prior to their use.

B. All work shall comply with Federal and State ADA accessibility requirements, as well as any other requirements stipulated by the funding source(s). When there are differences the stricter of the two shall apply.

The developer is responsible for notifying their architect and/or engineer of all f unding sources used on the project. The architect and/or engineer must indicate these funding requirements in the project’s plans/scope.

C. All units shall be approved for occupancy by the local Building Department or any other Agency Having Jurisdiction (AHJ) at the conclusion of the work and prior to occupancy.

D. Web-based security cameras and the equipment to record events are required for primary ingress/egress points to and from the site and for the principal parking and indoor and outdoor common areas whe re people will be congregating.

E. Site lighting is required for all parking and outside public spaces, and shall be of LED or similarly energy efficient type. The lenses on the exterior lights shall be cleaned with all oxidation removed or replaced. Light poles shall be new or painted, and shall be structurally sound and stable.

F. The developer’s architect is responsible for providing an Operating Procedure Outline Sheet (OPOS) for window washing systems where applicable, per Cal-OSHA requirements.

G. SHRA encourages the use of energy and water-efficient systems wherever they may be incorporated into the project.

General Requirements – Rehabilitation only
A. Any component of the project which does or may present a health or safety hazard to the public or tenants sha ll be corrected to the satisfaction of the local Building Department or AHJ.

B. A clear pest inspection report will be required at the conclusion of the construction work for rehabilitation projects.

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C. For all structures where disturbance of any hazardous materials (e.g. lead, asbestos, mold, etc.) will occur, a clearance report from an environmental consultant is required.

D. Projects deemed historically significant landmark by either the City of Sacramento or the National Register of Historic Places shall consult with the State Historic Preservation Officer (SHPO), and shall conform to the Secretary of the Interior Standards for the Treatment of Historic Properties.

Site Work
A. Trees and large shrubs must be trimmed, grass areas must be mowed, and all planter are as must be weed-free.

The landscape design shall incorporate a sustainable design appropriate for the Sacramento Valley. Vegetation that assists in minimizing crime and enhances public safety is preferred. Trees compromising building envelope materials (roofing, siding, windows, etc.) and/or structural integrity (including foundations) must be removed.

An arborist shall be consulted for an opinion on trees prior to major branch trimming, root cutting or tree removal. All trees, bushes and other plants that are to be removed shall have the root ball removed by grinding or by mechanical means. A landscape plan describing the above must be provided to SHRA for approval.

B. All landscaped areas must be served by a programmable automated irrigation system. The irri gation controller shall be a “Smart Controller” that senses rain to reduce water use. Irrigation shall be designed to use bubblers and other water saving measures. Irrigation must not spray on building. Sprinklers should minimize overspray that runs to storm drain drop inlets. Areas that show evidence of erosion of soil shall be landscaped to eliminate problems. The landscape plan must be approved by SHRA and applied.

C. For gated communities containing swinging vehicle gates, driveways shall be striped to show the area under the gate swings for safety purposes.

D. All projects shall contain trash enclosures with concrete aprons. Trash enclosures shall be made of cinder block or stucco. Trash enclosures shall be accessible to all tenants. Provisions for tenants with disabilities must be addressed in the project Scope of Development or the project plans.

E. All projects shall meet the parking requirements of the local Agency Having Jurisdiction (AHJ) over the project. "Grandfathered Projects" will need to show that they are in fact “Grandfathered” or otherwise exempted by the local AHJ. Otherwise, all projects shall meet the governing ADA requirements for parking.

F. A two percent (2%) slope shall be maintained for a distance of five feet from all structures and n o standing water shall remain on the site. Provide an on- site drainage system if necessary.

G. Stairways in common areas must include closed risers and non-slip concrete finish or other slip-resistant material on the treads.

H. Exterior mounted electrical, mechanical, and plumbing systems must be protected from vandalism.

I. For family projects of 50 or more units, a minimum of one school age-appropriate play structure is required. For family projects of 100 or more units, a minimum of one school age and one toddl er-appropriate play structure is required.

Site Work – Rehabilitation only
A. All landscaping and irrigation systems must be in a well-maintained condition.

B. All fencing must be in good and serviceable condition. Existing fencing that is to remain shall be free of flaking paint, rust, or any other signs of failure. If existing fencing shows any signs of failure, it shall be repaired, painted and restored to look new. All chain link fencing must be removed and replaced with fencing of another approved material. All pedestrian gates hardware must be functional and in new or near-new condition. Access Control systems are required at exterior pedestrian gates.

C. All driveways and sidewalks must be in good condition. All cracked or uplifted areas (more than ¼”) shal l be repaired or replaced.

D. The asphalt shall be in good condition, with no alligator cracking, longitudinal cracking, potholes, or standing water. Repairs to portions of parking lots not suitable for new coatings shall be performed by removing and replacing damaged paving. A new seal-coat or slurry-coat shall then be applied to the entire parking lot surface.

Parking spaces shall be restriped, including ADA aisles and other applicable striping/painting.

E. All site accessories (bollards, benches, tables, play equipment, bike racks, mailboxes, shade structures, BBQs, sheds, etc.) shall be replaced or in good repair (cleaned, painted and/or re -coated).

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Building Envelope and Moisture Protection – Rehabilitation only A. All areas exposed to moisture must be sealed and watertight. Buildings showing evidence of water intrusion shall have the areas inspected by a licensed architect/engineer or by a certified water intrusion expert. A water intrusion report shall be submitted to SHRA, and shall include the cause of the is sue and a resolution to eradicate the water intrusion. If the inspection cannot be completed until the demolition phase of the project, the report shall describe a procedure to inspect the issue during demolition.

B. Roofing must have 15 years or more of remaining life with no visible signs of leakage. For roofs containing composition shingles, a maximum of two layers of shingles are allowed (including any proposed new layers).

Provide evidence that the roof system has a 15-year life remaining on the manufacturer’s warranty.

C. All siding must have 15 years or more of remaining life. Hairline cracks in stucco must be sealed and painted with elastomeric paint. If requested by SHRA, a statement by a licensed architect and/or engineer that the existing siding contains at least 15 years of useful life remaining shall be provided.

D. Fireplaces must be clean and meet applicable air quality standards. Chimneys shall be clean and must be inspected by a certified chimney inspector for structural integrity. All recommended structural repairs shall be performed.

Doors and Windows
A. All dwelling/tenant units must have screens on all windows that are designed to open. Windows designed to open must have functional locks and must operate freely without excessive effort. All windows must be dual- paned (minimum), and shall meet or exceed the State of California’s currently applicable efficiency standards, and any other efficiency standards that may be dictated by the funding source or other governing bodi es for the project.

B. All doors must have matching hardware finishes.

C. All exterior doors must have deadbolt locks, keyed latch assemblies, viewers, and screws in strike plates long enough to penetrate the door jamb framing by at least one inch. The dwelling entry door hardware shall have single action hardware to release deadbolt and latch assembly.

D. All sliding exterior doors shall have screen doors and shall have functional locks and must operate freely without excessive effort.

E. All doors and windows must meet current egress standards.

Doors and Windows – Rehabilitation only
A. Any windows showing signs of condensation or leakage of any kind shall be replaced. SHRA allows window replacement using retrofit windows when those windows are installed by trained pro fessionals following manufacturer’s specifications. Retrofit windows must have a similar useful life as “new, construction” (i.e., nail fin) windows.

B. All doors and doorjambs must be in good condition. No damaged or worn doorjambs or doors are allowed.

Doors and/or jambs beyond their useful life shall be replaced.

Casework
A. New cabinet boxes shall be made of plywood or solid wood. No particle board boxes will be allowed.

B. All counter tops shall be of solid surface or granite, and in very good condition with no significant scratches, burns or other imperfections.

C. Face frames, doors and drawer faces shall be solid hardwood. No plastic laminate finishes will be allowed.

Casework – Rehabilitation only
A. All cabinets shall be replaced or in very good condition, within their 15 year useful life, both structurally and in appearance.

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Finishes
A. All dwelling unit kitchens shall contain luxury vinyl plank (LVP) flooring. Bathrooms must be floored with LVP, sheet vinyl or ceramic tile to provide a cleanable, impervious surface. Bedrooms, hallways, and living and dining rooms may be floored with carpeting, LVP or hardwood. Wear layer of LVP shall be at least 12 mils inside dwelling units. Tenant unit entries shall be floored with LVP or ceramic tile.

B. In common areas, corridors may be floored with LVP, glue-down carpeting, or carpet tiles. Community rooms and kitchens shall be floored with LVP. Wear layer of LVP in common/commercial areas shall be a minimum of 20 mils thick.

C. Carpet shall meet or exceed the minimum standards as set by HUD’s UM-44D bulletin.

Finishes – Rehabilitation only
A. Floor coverings must be in good, useable condition - no holes, tears, rips, or stains.

B. All exterior and interior surfaces must be painted. No peeling, cracking, chipping, or othe rwise failing paint will be allowed. All painted surfaces must be new, or in near new condition and appearance.

C. Acoustic (popcorn) ceiling texture must be removed and refinished with new texture to match wall texture.

Equipment
A. Dishwashers, refrigerator/freezer, oven, stoves and garbage disposals are required in all dwelling unit kitchens.

All appliances must be new or in very good operating condition. All appliances must be Energy Star rated, as applicable. Appliances slated for ADA units shall be per code requirements.

B. SRO projects are encouraged to provide the appliances listed above and will be reviewed and approved on a case-by-case basis.

C. All kitchens must have adequate cabinet and counter space. Installation of shelving for microwaves is required if over-the-range microwaves are not used, with the exception of ADA units.

Furnishings
A. Dwelling units must have window coverings on all windows.

Special Construction
A. Non-habitable structures on property must be painted to match primary buildings and must be structurally sound.

B. Laundry facilities must, at a minimum, be consistent with CTCAC requirements of one washer and dryer for every ten dwelling units for family housing and one for every 15 units for senior and special needs projects. Ten percent of the total number of washer/dryers must be ADA-accessible machines (unless the ADA units contain their own laundry facilities). Solid surface countertops will be required within laundry rooms and countertops shall meet all ADA requirements.

C. Public pool areas shall have self-closing gate(s). Fences and gates at pool areas shall meet applicable current codes and standards. Joints between coping and concrete deck shall be appropriately caulked. Existing pools shall have no cracks in plaster or tile grout joints. The Developer is responsible for ensuring pool and surroundings meet all applicable current codes and standards. If a project contains two or more pools, at least one must remain following rehabilitation.

Mechanical/Plumbing
A. Water heaters must be installed per current applicable codes.

B. All common areas and tenant units must have heating and air conditioning. Wall mount (i.e. PTAC units) or central systems are acceptable. Evaporative coolers are not acceptable. HVAC units should be protected f rom

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vandalism, pursuant to discretion of SHRA.

C. Toilets, showerheads, faucets, and mixing valves shall be new and meet current water conservation codes.

D. Tub surrounds must be one unbroken piece per wall and must be of solid surfaces (such as “Swanstone” or other solid acrylic materials, quartz composites), or other similar materials. Fiberglass/acrylic surrounds are acceptable.

Mechanical/Plumbing – Rehabilitation only
A. All toilets, sinks, and tubs shall be chip and stain free.

Electrical
A. All units must have smoke/carbon monoxide detectors installed per current code.

B. Wiring from telephone/data/cable suppliers shall be installed within walls, attic spaces, and/or crawl spaces. No conduits are allowed to be mounted on the exterior of the buildings in new construction.

C. Broadband infrastructure meeting the requirements of 24 CFR 5.100* is required in all new construction projects of 4 or more units.

*Broadband infrastructure means cables, fiber optics, wiring, or other permanent (integral to the structure) infrastructure, including wireless infrastructure, that is capable of providing access to Internet connections in individual housing units, and that meets the definition of “advanced telecommunications capability” determined by the Federal Communications Commission under section 706 of the Telecommunications Act of 1996 (47 U.S.C. 1302).

Electrical – Rehabilitation only
A. All electrical panels shall meet current code.

B. Any rehabilitation projects with un-grounded electrical systems shall be re-wired with grounded systems to meet current code.

C. For rehabilitation projects, switches, outlets and light fixtures shall be replaced with devices that meet current applicable codes.

D. Wiring mounted on the exterior of the surface may be allowed if it is co ncealed in conduit and conduit is painted to match exterior siding. For projects where exterior siding will be removed, this wiring shall be installed within walls, attic spaces, and/or crawl spaces.

Resident Services Community Space
All properties, regardless of project type (i.e. senior, family, or large family), must devote a minimum of 1,200 s.f. to actual resident services/community space. Resident services space includes common kitchens, computer rooms, meeting rooms and general gathering space. It does not include public restrooms, leasing offices, laundry facilities and lobbies. Common kitchens are required, including refrigerator, stove, garbage disposal, and dishwasher.

For existing buildings, these requirements shall apply unless SHRA deems there to be significant physical constraints.

End of Scope of Development.