Agenda packet — South Lake Tahoe City Council, June 20, 2023 (part 2 of 6)

15. Inconsistency. In the event of any inconsistency or conflict between the covenants, terms and conditions of any of the Loan Documents and this Rider, the covenants, terms and conditions of this Rider shall control.

16. Survival. Except to the extent expressly modified, supplemented or amended in this Rider, the Loan Documents remain in full force and effect. 288
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EXHIBIT C

1. Taxable Construction Loan:

Lender (Not Related):

Amount: $_______________ Construction and $________ Permanent Type: Construction/Permanent

2. AHSC Loan:

Lender (Not Related): HCD
Source: Affordable Housing & Sustainable Cities
Amount: $10,551,967
Type: Permanent

3. PLHA Loan:

Lender (Not Related): City of South Lake Tahoe
Amount: $4,750,000
Type: Construction/Permanent
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ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

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

I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature_____________________________
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City of South Lake Tahoe
Agenda Item Executive Summary
Joe Irvin, City Manager
Meeting Date: June 20, 2023
Agenda Item #: 10
Agenda Item: Budget Appropriation of $5,000,000 of Permanent Local Housing Allocation (PLHA) Grant Funds and Loan Agreement for $4,750,000 with Sugar Pine Phase 3 Housing Partners, LP for Sugar Pine Village Phase 2A
Executive Summary: On January 10, 2023, the City Council authorized an application for the Permanent Local Housing Allocation (PLHA) Program not to exceed $5,000,000. On April 10, 2023, the City of South Lake Tahoe was awarded $5,000,000 in PLHA funds. This resolution authorizes the budget appropriation of the funds and the execution of a loan agreement with Sugar Pine Phase 3 Housing Partners, LP for the construction of phase 2A of the Sugar Pine Village Affordable Housing Project.

Requested Action / Suggested Motions: Pass a Resolution authorizing budget appropriation of Permanent Local Housing Allocation Non-Entitlement Local Government Competitive Component funds for construction of the Sugar Pine Village Affordable Housing Project and authorizing and directing the Mayor to execute the loan agreement with Sugar Pine Phase 3 Housing Partners, LP.

Responsible Staff Member: Zach Thomas, Housing Manager
Responsible Staff Member: Zach Thomas, Housing Manager
Reviewed and Approved By:

Hilary Roverud, Development Services Director
Olga Tikhomirova, Director of Finance
Susan Blankenship, City Clerk
Heather Stroud, City Attorney
Attachments:
01-Staff Report - SPV PLHA Loan.docx
02-Resolution - Budget Appropriation.docx
03-SPV 2A PLHA Loan Agreement.docx
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City of South Lake Tahoe
Report to City Council
Meeting Date: June 20, 2023
Title: Permanent Local Housing Allocation (PLHA) Grant Loan Agreement and Budget Appropriation for the Sugar Pine Village Affordable Housing Project Location: 1888 Lake Tahoe Boulevard and 1029 Tata Lane
Responsible Staff Member: Zach Thomas, Housing Manager
(530) 542-7400
Background: The Sugar Pine Village project is a proposed 248-unit affordable housing project, with onsite community service facilities on 11.6 acres of land owned by the State of California and managed by the California Tahoe Conservancy (Conservancy). This project is a result of the Governor’s Executive Order N-06-19, which directed the California Department of General Services (DGS) to identify excess state properties as potential affordable housing development sites. In July 2020, the Conservancy announced the State had selected Related Companies of California LLC in partnership with the St. Joseph Community Land Trust to construct and manage the Sugar Pine Village project.

Since June 2020, the City of South Lake Tahoe has been an active partner in the development of the project. The City has contributed a $566,629 loan of RDA Program Income funds for predevelopment costs (Resolution 2020-109) and a $1,250,000 loan to purchase banked land coverage from the airport (Resolution 2020-110). Most recently, the City Council at its October 19, 2021 meeting also authorized a $627,626 loan of HOME Program Income. This brings the City’s total commitment toward the project to $2,444,255. The project has secured over $100 million in tax credit equity and grant funds utilizing the City’s contribution as local leverage. Phase 1A is fully funded and construction began in 2022 with site preparation and modular unit construction.

Construction will continue throughout 2023 and into 2024. Phase 2A has recently secured all funding necessary and final financing of that phase is anticipated in August 2023.

In addition to direct City commitments, the City has partnered with Related Development to secure $17,359,470 in Affordable Housing and Sustainable Communities (AHSC) grant funds for Phase 2A and a previously awarded $5,000,000 in Permanent Local Housing Allocation (PLHA) grant funding which has already been deployed in the construction currently underway in Phase 1A.

Issue and Discussion: At its January 10, 2023 meeting, the City Council adopted a resolution authorizing the City Manager to submit a joint application with Related Companies of California, LLC under the PLHA non-entitlement competitive Program for an amount not to exceed $5,000,000. The $5,000,000 grant was awarded to the City on April 10, 2023. This brings the total amount of PLHA funds awarded to Sugar Pine Village to $10,000,000 between the two (years 2022 and 2023) grant cycles. Up to 5 percent ($250,000) can be used for reimbursement of administrative costs incurred by the City.
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Council Agenda Report June 20, 2023 Page 2 of 3
It is recommended that the City Council adopt a resolution appropriating the funds in the City budget. It is also recommended that the City Council authorize the City Manager to enter into a Loan Agreement, Promissory Note, Deed of Trust and Regulatory Agreement with Sugar Pine Phase 3 Housing Partners, L.P. to loan $4,750,000 of PLHA funds for use in the construction of Phase 2A of the Sugar Pine Village Affordable Housing Project. Staff requests authorization for the City Manager to execute the Loan Agreement and related documents in substantially the form attached hereto including any changes required to comply with the Housing and Community Development Standard Agreement, to be approved as to form by the City Attorney.

Financial Implications: While the City carries primary responsibility for administering the grant, the Loan Agreement will require that the borrower, Sugar Pine Housing Partners, L.P. to comply with all requirements of the Standard Agreement between the City and the State. In addition, up to 5 percent ($250,000) of the grant may be used to cover costs associated with administering the grant.

Staff is recommending that the PLHA funds be appropriated, consistent with the Standard Agreement, as follows:

Account Number 250-06024 Work-Force Housing
Revenue (33244): $5,000,000
Loans to Borrowers (47060): $4,750,000
Administration Costs (50011): $250,000
Environmental Considerations: For projects that satisfy criteria specified by SB 35, the guidelines issued by HCD specify that the California Environmental Quality Act (CEQA) does not apply to actions taken by a local government to provide financial assistance to a development that receives streamlined approval and that is to be used for housing for persons and families of very low, low, or moderate income, as defined in Section 50093 of the Health and Safety Code.

Policy Implications: The recommended actions are consistent with the City Strategic Plan which identifies supporting the Sugar Pine Village Project as Action Item 1.3.12: Pro-actively work with current affordable housing developers and partner agencies to implement the Sugar Pine Village project.

The recommended action is consistent with the following adopted policies and programs:

City General Plan Housing Element
Policy 1-1 The City shall adopt programs, ordinances, incentives, land use plans and other regulatory mechanisms that provide opportunities for the private sector to address the housing needs of citizens of all economic levels.

Policy 2-2 The City shall enable opportunities for deed-restricted affordable ownership housing to ensure long-term affordability.

Policy 2-5 The City shall recognize that it will become difficult to attract employees if they cannot afford to purchase or rent housing in South Lake Tahoe. The City shall encourage and support programs and activities that create a robust local economy that provides residents 293
Council Agenda Report June 20, 2023 Page 3 of 3
with good paying employment and the means to purchase and/or rent housing in the city.

Program 2-1 PURSUE STATE AND FEDERAL FUNDS
To support the creation of quality, affordable housing options for extremely low-, very low-, and low-income households, the City shall seek and when appropriate and feasible pursue grant opportunities for state and federal funds.

Tahoe Valley Area Plan
Policy H-1.1 – Housing Options
Provide for a range of housing options that include affordable, moderate-income, and workforce housing so that people can live and work in the City.

Policy H-1.5 – Redirection of Development
Direct high density residential development to areas of Tahoe Valley that are within walking distance of public transit and services.

Policy H-1.7 – Tahoe Livable Communities Program
Collaborate and support efforts of the California Tahoe Conservancy to remove blighted properties and repurpose associated development commodities. Encourage the use of residential commodities for affordable housing in Tahoe Valley area.

Policy H-2.1 – General
Encourage the creation of residential uses to support and add vitality to commercial and public service projects in the Tahoe Valley area.
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Resolution 2023-XXX June 20, 2023 Page 1 of 2
Resolution 2023-XXX
Adopted by the City of South Lake Tahoe
City Council
June 20, 2023
Budget Appropriation of Permanent Local Housing Allocation Non-Entitlement Local Government Competitive Component funds for construction of the Sugar Pine Village Affordable Housing Project

BACKGROUND
A. To address the shortage of housing for Californians, Governor Newsom ordered the Department of General Services (DGS) and the Department of Housing and Community Development (HCD) to identify and prioritize excess state-owned property and aggressively pursue sustainable, innovative, cost-effective housing projects (Executive Order N-06-19).

B. Through a competitive Request for Proposal process, the State of California has selected The Related Companies of California (“Related California”) and Saint Joseph Community Land Trust team to develop the Sugar Pine Village project (“Project”) located at 1888 Lake Tahoe Blvd and 1029 Tata Lane in South Lake Tahoe. The Project will include 248 rental units available to low and very low income households.

C. The City has been an active partner in the development and financing of the Project by both contributing local money and being joint applicants on a numerous of grants.

D. On January 10, 2023, the City Council Adopted Resolution 2023-002 authorizing the application for the Permanent Local Housing Allocation (PLHA) Program Non-Entitlement Local Government Competitive Component in an amount not to exceed $5,000,000.

E. On April 10, 2023 the City of South Lake Tahoe was awarded $5,000,000 in PLHA funds for use in the development of the Project and subject to the terms and conditions as specified in the Standard Agreement.

F. Related California has made a request on behalf of the project team, for the City to loan funds to cover predevelopment expenses associated with the design and entitlement of the Project.

G. Related California is a real estate firm with 30 years of experience delivering affordable housing, mixed-income housing, and mixed-use developments across California. The company has more than 16,000 residences completed or under construction, 13,000 of which are affordable for either low or very low income households. 295
Resolution 2023-XXX June 20, 2023 Page 2 of 2
H. Related California and SJCLT, or their affiliates, have formed a limited partnership or LLC to advance the development of the Sugar Pine Village project and this LLC or limited partnership would be the recipient of the financial assistance requested for the project.

I. Related California has provided a financing strategy for the development of the Sugar Pine Village, a 248 unit housing project affordable to low and very low income households, which includes a combination of tax credit equity, private loan financing, and state and federal housing program sources.

BASED ON THE FACTS SET FORTH IN THE BACKGROUND, BE IT RESOLVED, that the City Council of the City of South Lake Tahoe:

1. Appropriate budgeting of the PLHA funds into account number 250-06024 as follows:

Revenue (33244) $5,000,000
Loan to Project (47060) $4,750,000
Administrative Costs (50011) $250,000
Adopted by the City of South Tahoe City Council on June 20, 2023 by the following vote:

Yes:

No:

Absent:

Abstain:
________________________ Date:_________
Cristi Creegan, Mayor
Attest:
________________________
Susan Blankenship, City Clerk
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1 60064185.1

LOAN AGREEMENT
by and between

THE CITY OF SOUTH LAKE TAHOE,
a California municipal corporation
and
SUGAR PINE PHASE 3 HOUSING PARTNERS, L.P.,
a California limited partnership
June 20, 2023
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THIS LOAN AGREEMENT (this “Agreement”) is entered into effective as of June 20, 2023 (“Effective Date”) by and between the CITY OF SOUTH LAKE TAHOE, a municipal corporation (“City”) and SUGAR PINE PHASE 3 HOUSING PARTNERS, L.P., a California limited partnership (“Developer”). City and Developer are hereinafter collectively referred to as the “Parties.”

RECITALS
A. Developer has or will acquire a leasehold interest in that real property located in South Lake Tahoe, California (the "Property"), as more particularly described on Exhibit A attached hereto and incorporated herein by this reference.

B. Developer has proposed to develop a sixty (60) unit multifamily residential apartment building rented at an affordable housing cost to low, very-low, and extremely-low income households (the “Project”).

C. The City has received grant funding from the California Department of Housing and Community Development (“HCD”) under the Permanent Local Housing Allocation (“PLHA”) program pursuant to a Standard Agreement between the City and HCD dated ______ (Contract No. 22-PLHACOM-17811) (the “PLHA Grant”).

D. Developer has requested, and City has agreed, to provide a loan to Developer in the amount of Four Million Seven Hundred Fifty Thousand Dollars ($4,750,000) from the City’s PLHA allocation (the “Loan”) to assist in the development of the Project pursuant to the terms and conditions set forth herein.

E. A material inducement to City to enter into this Agreement is the agreement by Developer to develop the Property within the time periods specified herein and in accordance with the provisions hereof, and the City would be unwilling to enter into this Agreement in the absence of an enforceable commitment by Developer to complete the Project in accordance with such provisions and within such time periods.

F. Concurrently herewith: (i) Developer shall execute a secured promissory note (the “Note”) in the amount of the Loan and a Leasehold Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (“Deed of Trust”), which shall provide City with a security interest in the Property and the Project, and (ii) Developer and City shall execute an Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants (the “Regulatory Agreement”), which shall be recorded against the Property and which shall require Project rents to be affordable to low, very low, and extremely-low income households for a term of not less than 55 years. The Note, the Regulatory Agreement and Deed of Trust are collectively hereinafter referred to as the “City Documents.” NOW, THEREFORE, in consideration of the mutual covenants contained herein and good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows.

ARTICLE I
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DEFINITIONS

1. Definitions. The following terms shall have the meanings set forth in the Sections referenced below whenever used in this Agreement and the Exhibits attached hereto. Additional terms are defined in the Recitals and text of this Agreement.

1.1 “Certificate of Completion” is defined in Section 3.15.

1.2 “City Documents” is defined in Recital F.

1.3 “Claims” is defined in Section 3.17.

1.4 “Conditions of Approval” is defined in Section 3.2.

1.5 “Construction Plans” is defined in Section 3.11.

1.6 “Environmental Laws” is defined in Section 9.4.

1.7 “Hazardous Materials” is defined in Section 9.3.

1.8 “Improvements” is defined in Section 3.9.

1.9 “Indemnitees” is defined in Section 3.17.

1.10 “Loan” is defined in Recital C and Article 4.

1.11 “Note” is defined in Article 4.

1.12 “Project” is defined in Recital B and further described in Section 3.2.

1.13 “Regulatory Agreement” is defined in Recital F.

ARTICLE II
REPRESENTATIONS; EFFECTIVE DATE AND TERM

2.1 Developer's Representations. Developer represents and warrants as follows, and Developer covenants that until the expiration or earlier termination of this Agreement, upon learning of any fact or condition which would cause any of the warranties and representations in this Section 2.1 not to be true, Developer shall immediately give written notice of such fact or condition to City. Developer acknowledges that City shall rely upon Developer’s representations made herein notwithstanding any investigation made by or on behalf of City. (i) Authority. Developer is a California limited partnership duly organized and in good standing under the laws of the State of California. Developer has the full right, 299
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power and authority to undertake all obligations of Developer as provided herein, and Developer’s execution, performance and delivery of this Agreement, the Regulatory Agreement, and the other City Documents have been duly authorized by all requisite actions. (ii) No Conflict. Developer's execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which Developer is a party or by which it is bound. (iii) No Litigation or Other Proceeding. No litigation or other proceeding (whether administrative or otherwise) is outstanding or has been threatened which would prevent, hinder or delay the ability of Developer to perform its obligations under this Agreement. (iv) No Developer Bankruptcy. Developer is not the subject of a bankruptcy or insolvency proceeding.

2.2 City Representations. City represents and warrants to Developer and covenants that until the expiration or earlier termination of this Agreement, upon learning of any fact or condition which would cause any of the warranties and representations in this Section 2.2 not to be true, City shall immediately give written notice of such fact or condition to Developer. City acknowledges that Developer shall rely upon City’s representations made herein notwithstanding any investigation made by or on behalf of Developer.
(i) Authority. City is a California municipal corporation, duly organized and in good standing under the laws of the State of California. City has the full right, power and authority to undertake all of the respective obligations as provided herein, and the execution, performance and delivery of this Agreement by City has been duly authorized by all requisite actions on the part of each such entity. The persons executing this Agreement on behalf of City has been duly authorized to do so. This Agreement constitutes a valid and binding obligation of City.
(ii) No Conflict. City’s execution, delivery and performance of their respective obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which City is a party or by which either is bound. (iii) No Litigation or Other Proceeding. No litigation or other proceeding (whether administrative or otherwise) is outstanding or has been threatened which would prevent, hinder or delay the ability of City to perform their obligations under this Agreement. (iv) No Bankruptcy. City is not the subject of a bankruptcy or insolvency proceeding.

2.3 Effective Date. The obligations of Developer and City hereunder shall be effective as of the Effective Date.

ARTICLE III

DEVELOPMENT OF THE PROJECT
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3.1 The Property. Developer represents and warrants that as of the Effective Date:
(i) Developer possesses leasehold title to the Property, and (ii) to the best knowledge of Developer after reasonable inquiry, the Property is subject to no covenant, condition, restriction or agreement that would hinder or prevent Developer’s performance of its obligations under this Agreement, the Regulatory Agreement, and the other City Documents. If at any time the foregoing statements become untrue, the City shall have the right to terminate this Agreement upon written notice to Developer.

3.2 Affordable Housing. Developer covenants and agrees for itself, its successors and assigns that twenty-nine (29) of the residential units developed within the Project shall be occupied by low, very-low, or extremely-low income households and rented at an affordable rent to households of low, very low, and extremely low-income in accordance with the terms hereof and the Regulatory Agreement which the Parties shall execute substantially in the form attached hereto as Exhibit C concurrently with the execution of this Agreement, and which shall be recorded in the Official Records of El Dorado County (“Official Records”) on the date that Developer acquires the Property.

3.3 Project Approvals. Developer covenants that it shall: (i) obtain all necessary permits and approvals which may be required by City and any other governmental agency having jurisdiction over the construction of the Project or the development of the Property, (ii) comply with all Conditions of Approval, (iii) comply with all mitigation measures, if any, imposed in connection with any environmental review of the Property or the Project, and (iv) not commence construction of the Project prior to issuance of building permits.

3.4 Fees. Developer shall be solely responsible for, and shall promptly pay when due, all customary and usual fees and charges of City in connection with obtaining building permits and other approvals for the Project, including without limitation, those related to the processing and consideration of amendments, if any, to the current entitlements, any related approvals and permits, environmental review, architectural review, historic review, and any subsequent approvals for the Project or the development of the Property.

3.5 Cost of Acquisition and Construction. Except as expressly set forth herein, Developer shall be solely responsible for all direct and indirect costs and expenses incurred in connection with the acquisition of the Property, the design, development and construction of the Project and compliance with the Conditions of Approval, including without limitation the installation and construction of all off-site or on-site improvements required by City in connection therewith, and none of such costs and expenses shall be the obligation of the City.

3.6 Rights of Access; Books and Records. For the purpose of ensuring that the Project is developed in compliance with this Agreement, Developer shall permit representatives of the City to enter upon the Property to inspect the Project following 48-hours’ written notice (except in the case of emergency in which case such notice as may be practical under the circumstances shall be provided). Upon request, Developer shall permit the City to inspect at reasonable times and on a confidential basis those books, records and all other documents of Developer necessary to determine Developer's compliance with the terms of this Agreement. 301
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3.7 City Disclaimer. Developer acknowledges that the City is under no obligation, and neither City undertakes or assumes any responsibility or duty to Developer or to any third party, to in any manner review, supervise, or inspect the progress of construction or the operation of the Project. Developer and all third parties shall rely entirely upon its or their own supervision and inspection in determining the quality and suitability of the materials and work, the performance of architects, subcontractors, and material suppliers, and all other matters relating to the construction and operation of the Project. Any review or inspection undertaken by the City is solely for the purpose of determining whether Developer is properly discharging its obligations under this Agreement, and shall not be relied upon by Developer or any third party as a warranty or representation by the City as to the quality of the design or construction of the Project and other improvements constructed on the Property (collectively, the “Improvements”) or otherwise.

3.8 Financing Plan. As set forth in the attached Exhibit F, Developer has provided City with a preliminary financing plan for the Project (“Financing Plan”) which describes (i) the estimated costs of Project development, including acquisition costs, and hard and soft construction costs, (ii) an operating pro forma which describes projected revenue and expenses for the Project, and (iii) identification of sources of construction and permanent financing.

Prior to the commencement of initial construction of the Project, Developer shall provide evidence to City that all sources of funds for Project construction and permanent financing have been firmly committed by Developer, equity investors or lending institutions, subject only to commercially reasonable conditions.

3.9 Equal Opportunity. During the construction of the Project, there shall be no discrimination on the basis of race, color, religion, creed, sex, sexual orientation, marital status, ancestry or national origin in the hiring, firing, promoting or demoting of any person engaged in construction of the Project, and Developer shall direct its contractors and subcontractors to refrain from discrimination on such basis.

3.10 Prevailing Wage Requirements. To the extent, and only if required by applicable federal and state laws, rules and regulations, Developer and its contractors and agents shall comply with California Labor Code Section 1720 et seq. and applicable federal labor laws and standards, and the regulations adopted pursuant thereto (“Prevailing Wage Laws”), and shall be responsible for carrying out the requirements of such provisions. .

3.11 Compliance with Laws. Developer shall carry out and shall cause its contractors to carry out the construction of the Project in conformity with all applicable federal, state and local laws, rules, ordinances and regulations, including without limitation, all applicable federal and state labor laws and standards, applicable provisions of the California Public Contracts Code, the City zoning and development standards, building, plumbing, mechanical and electrical codes, all other provisions of the City's Municipal Code, and all applicable disabled and handicapped access requirements, including without limitation, the Americans with Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, et seq., and the Unruh Civil Rights Act, Civil Code Section 51, et seq.. 302
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3.12 Liens and Stop Notices. Until the expiration of the term of the Regulatory Agreement and full repayment of the Loan, Developer shall not allow to be placed on the Property or any part thereof any lien or stop notice on account of materials supplied to or labor performed on behalf of Developer. If a claim of a lien or stop notice is given or recorded affecting the Project, Developer shall within thirty (30) days of such recording or service: (a) pay and discharge (or cause to be paid and discharged) the same; or (b) effect the release thereof by recording and delivering (or causing to be recorded and delivered) to the party entitled thereto a surety bond in sufficient form and amount or provide other assurance satisfactory to City that the claim of lien or stop notice will be paid or discharged.

3.13 Right of City to Satisfy Liens on the Property. If Developer fails to satisfy or discharge any lien or stop notice on the Property pursuant to Section 3.19 above, the City shall have the right, but not the obligation, to satisfy any such liens or stop notices at Developer’s expense and without further notice to Developer. In such event Developer shall be liable for and shall immediately reimburse City for such paid lien or stop notice. Alternatively, the City may require Developer to immediately deposit with City the amount necessary to satisfy such lien or claim pending resolution thereof. The City may use such deposit to satisfy any claim or lien that is adversely determined against Developer. Developer shall file a valid notice of cessation or notice of completion upon cessation of construction of the Improvements for a continuous period of thirty (30) days or more, and shall take all other reasonable steps to forestall the assertion of claims or liens against the Property or the Improvements. The City may (but has no obligation to) record any notices of completion or cessation of labor, or any other notice that the City deems necessary or desirable to protect its interest in the Property and the Improvements.

3.14 Performance and Payment Bond(s).
(a) Prior to commencement of construction of the Project, Developer shall deliver to the City copies of payment bond(s) and performance bond(s) issued by a reputable insurance company licensed to do business in California, each in a penal sum of not less than one hundred percent (100%) of the scheduled cost of construction of the Project. (b) In lieu of such performance and payment bonds, Developer may submit evidence satisfactory to the City of the Developer's ability to commence and complete construction of the Project in the form of an irrevocable letter of credit, pledge of cash deposit, certificate of deposit, or other marketable securities held by a broker or other financial institution, with signature authority of the City required for any withdrawal, or a completion guaranty in a form and from a guarantor acceptable to City. Such evidence must be submitted in approvable form in sufficient time to allow the City to review and approve the information within prior to the scheduled construction start date.

ARTICLE IV

CITY FINANCIAL ASSISTANCE

4.1 Loan. Using PLHA funds, the City shall provide a loan in the amount of Four Million Seven Hundred Fifty Thousand Dollars ($4,750,000) (the “Loan”) to Developer upon the terms and conditions and for the purposes set forth in this Agreement. The Loan shall be 303
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evidenced by a promissory note (the “Note”) substantially in the form attached hereto as Exhibit D, and shall be secured by a leasehold deed of trust (the “Deed of Trust”) executed by Developer as Trustor substantially in the form attached hereto as Exhibit E and recorded against the Property subordinate only to such liens as City shall approve in writing. The outstanding principal balance of the Note will accrue zero percent (0%) simple annual interest commencing upon the date of disbursement.

Provided that Developer has complied with all conditions precedent to disbursement of the Loan set forth in Section 4.5, the proceeds of the Loan (“Loan Proceeds”) shall be disbursed in accordance with Section 4.4 hereof. The Parties agree that City shall disburse Loan Proceeds only for the purposes set forth in Section 4.4.

4.2 Payment Dates; Maturity Date. All payments on the loan shall be deferred until the Maturity Date. The entire outstanding principal balance of the Loan together with accrued interest and (except as otherwise provided herein or in the other City Documents) all other sums due under the City Documents shall be payable in full on the fifty-fifth (55th) anniversary of the date that City issues the final certificate of occupancy for the Project (the “Maturity Date”).

4.3 Security. As security for repayment of the Note, Developer shall execute the Deed of Trust pursuant to which City shall be provided a lien against the Property and the Improvements. The Deed of Trust shall be recorded in the Official Records on the date that Developer acquires the Property. The Deed of Trust may be subordinated only to such liens and subject only to such title exceptions as City may approve in writing. The City acknowledges that Developer’s construction and permanent lender(s) may require the subordination of the Deed of Trust and the City shall subordinate the Deed of Trust to deeds of trust or other security instruments approved by the City.

4.4 Use and Disbursement of Proceeds. The Loan Proceeds shall be used solely to fund acquisition of the Property and/or construction of the Project, and closing, escrow and other costs approved by the City.

4.5 Conditions to Disbursement of Loan Proceeds. City’s obligation to fund the Loan and disburse the proceeds thereof is conditioned upon the satisfaction of all of the following conditions:
(a) Developer’s delivery to City of each of the following: (i) certificate of good standing, certified by the Secretary of State indicating that Developer is properly organized, in good standing, and authorized to do business in the State of California, and (ii) a certified resolution indicating that Developer has authorized this transaction and that the persons executing this Agreement, the Regulatory Agreement, and the City Documents on Developer’s behalf have been duly authorized to do so. (b) Developer’s delivery to the City of evidence of insurance coverage in accordance with the requirements set forth in Section 11.2. (c) Developer’s delivery of the Regulatory Agreement and each of the City Documents, each fully-executed and acknowledged as applicable. 304
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(d) Recordation of the Regulatory Agreement, and the Deed of Trust, in the Official Records.
(e) The issuance by an insurer satisfactory to City of an A.L.T.A. lender’s policy of title insurance (“Title Policy”) for the benefit of City in the amount of the Loan, insuring that the lien of the Deed of Trust is subject only to such defects, liens, conditions, encumbrances, restrictions, easements and exceptions as City may approve in writing and containing such endorsements as City may reasonably require, with the cost of the Title Policy to be paid by Developer.
(f) Reasonable written confirmation that all other Project acquisition and construction costs required by the Financing Plan (or otherwise) are (or will be subject to the closing and funding of the Loan) available to Developer. (g) The City’s receipt of a written requisition for disbursement of funds from Developer specifying the amount and use of the requested funds, accompanied by the title company’s estimated settlement statement showing the acquisition price, closing costs and all other amounts due in escrow for Developer’s acquisition of the Property.

4.6 No Obligation to Disburse Proceeds Upon Default. Notwithstanding any other provision of this Agreement, the City shall have no obligation to disburse or authorize the disbursement of any portion of the Loan Proceeds following:
(i) the failure of any of Developer’s representations and warranties made in this Agreement or in connection with the Loan to be true and correct in all material respects;
(ii) the termination of this Agreement by mutual agreement of the Parties; (iii) the conditions to disbursement of the Loan set forth in Section 4.5 have not been satisfied within the time frame set forth in Section 3.1, unless an extension of such date is approved by City in writing; or (iv) the occurrence of an Event of Default under this Agreement, the Regulatory Agreement, any of the City Documents which remains uncured beyond any applicable cure period.

4.7 Prepayment; Acceleration
(a) Prepayment. Developer shall have the right to prepay the Loan at any time and from time to time, without penalty or premium, provided that any prepayment of principal must be accompanied by interest accrued but unpaid to the date of prepayment. Prepayments shall be applied first to accrued but unpaid interest and then to principal. Any such prepayment shall have no effect upon Developer’s obligations under the Regulatory Agreement which shall survive for the full term of the Regulatory Agreement.
(b) Due On Sale or Encumbrance. Unless City agrees otherwise in writing, the entire unpaid principal balance and all interest and other sums accrued under the Note shall be due and 305
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payable upon the Transfer (as defined in Section 7.2) absent the prior written consent of City of all or any part of or interest in the Property except for a Transfer permitted under Section 7.3 of this Agreement or as otherwise permitted pursuant to this Agreement.

4.8 Nonrecourse. Except as expressly provided in this Section 4.8, Developer and its partners shall have no personal liability for payment of the principal of, or interest on the Note, and the sole recourse of City with respect to the payment of the principal of, and interest on the Note shall be to the Property and the Improvements and any other collateral held by City as security for the Note; provided however, nothing contained in the foregoing limitation of liability shall: (i) limit or impair the enforcement against all such security for the Note of all the rights and remedies of the City thereunder; (ii) be deemed in any way to impair the right of the City to assert the unpaid principal amount of the Note as demand for money within the meaning and intendment of Section 431.70 of the California Code of Civil Procedure or any successor provision thereto; or (iii) be deemed in any way to limit the rights of the City to obtain specific performance by the Developer of its covenants under the City Documents, other than the covenants to pay the City principal and interest due under the Note.

The foregoing limitation of liability is intended to apply only to the obligation for the repayment of the principal of, and payment of interest on the Note; nothing contained herein is intended to relieve the Developer of its obligation to indemnify the City under this Agreement, or liability for: (i) fraud or willful misrepresentation by the Developer; (ii) the failure to pay taxes, assessments or other charges which may create liens on the Property that are payable or applicable prior to any foreclosure under the Deed of Trust (to the full extent of such taxes, assessments or other charges); (iii) the fair market value of any personal property or fixtures removed or disposed of by the Developer other than in accordance with the Deed of Trust; and/or (iv) the misappropriation of any proceeds by the Developer under any insurance policies or awards resulting from condemnation or the exercise of the power of eminent domain or by reason of damage, loss or destruction to any portion of the Development

4.9 PLHA Grant Matters. Developer is the “Sponsor” or “Co-Applicant Sponsor” under the PLHA Grant. In addition to all of its other commitments in the City Documents, and whether or not Developer directly signs the PLHA Grant, Developer:
(a) affirms the truth and accuracy of all Sponsor or Co-Applicant Sponsor representations and warranties in the PLHA Grant;
(b) shall comply with all Sponsor or Co-Applicant obligations in the PLHA Grant;
(c) shall timely provide the City with all documents and information (to the extent in the possession of or reasonably obtainable by Developer) to permit the City to comply with the City’s obligations under the PLHA Grant;
(d) agrees that a Developer default under the PLHA Grant is an event of default under this Agreement; and
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(e) acknowledges that the City is executing the PLHA Grant and entering into the City Loan Documents in reliance on Developer’s commitments in this Section 4.9, and would not do so in the absence of this Section 4.9.

ARTICLE V

INTENTIONALLY OMITTED

ARTICLE VI

USE OF THE PROPERTY

6.1 Use; Affordable Housing. Developer covenants and agrees for itself and its successors and assigns that the Property shall be used for the development and operation of the Project in accordance with the terms and conditions of this Agreement and the Regulatory Agreement.

6.2 Maintenance. Developer shall at its own expense, maintain the Property, the Improvements and related landscaping and common areas in good physical condition, in good repair, and in decent, safe, sanitary, habitable and tenantable living conditions in conformity with all applicable state, federal, and local laws, ordinances, codes, and regulations. Without limiting the foregoing, Developer agrees to maintain the Project and the Property (including without limitation, the residential units, common areas, landscaping, driveways, parking areas and walkways) in a condition free of all waste, nuisance, debris, unmaintained landscaping, graffiti, disrepair, abandoned vehicles/appliances, and illegal activity, and shall take all reasonable steps to prevent the same from occurring on the Property or at the Project. Developer shall prevent and/or rectify any physical deterioration of the Property and the Project and shall make all repairs, renewals and replacements necessary to keep the Property and the Improvements in good condition and repair.

6.3 Taxes and Assessments. Developer shall pay all real and personal property taxes, assessments and charges and all franchise, income, payroll, withholding, sales, and other taxes assessed against the Property and payable by Developer, at such times and in such manner as to prevent any penalty from accruing, or any lien or charge from attaching to the Property; provided, however, that Developer shall have the right to contest in good faith, any such taxes, assessments, or charges. In the event the Developer exercises its right to contest any tax, assessment, or charge, the Developer, on final determination of the proceeding or contest, shall immediately pay or discharge any decision or judgment rendered against it, together with all costs, charges and interest. Developer shall have the right to apply for all applicable tax exemptions, including, without limitation, the welfare exemption from property tax for lowincome housing.

6.4 Obligation to Refrain from Discrimination. Developer shall not restrict the rental, sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, or any portion thereof, on the basis of race, color, religion, creed, sex, sexual orientation, disability, marital status, ancestry, or national origin of any person. Developer covenants for itself and all persons claiming under or through it, and this Agreement is made and accepted upon and subject 307
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to the condition that there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property or part thereof, nor shall Developer or any person claiming under or through Developer establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in, of, or for the Property or part thereof. Developer shall include such provision in all deeds, leases, contracts and other instruments executed by Developer, and shall enforce the same diligently and in good faith.

ARTICLE VII

LIMITATIONS ON CHANGE IN OWNERSHIP, MANAGEMENT

AND CONTROL OF DEVELOPER

7.1 Change Pursuant to this Agreement. Developer has represented that it possess the necessary expertise, skill and ability to carry out the development of the Project on the Property pursuant to this Agreement. The qualifications, experience, financial capacity and expertise of Developer is of particular concern to the City. It is because of these qualifications, experience, financial capacity and expertise that the City has entered into this Agreement with Developer.

No voluntary or involuntary successor, assignee or transferee of Developer shall acquire any rights or powers under this Agreement, except as expressly provided herein.

7.2 Prohibition on Transfer. Prior to the expiration of the term of the Regulatory Agreement, Developer shall not, except as expressly permitted by this Agreement, directly or indirectly, voluntarily, involuntarily or by operation of law make or attempt any total or partial sale, transfer, conveyance, assignment or lease (collectively, “Transfer”) of the whole or any part of the Property, the Project, the Improvements, or this Agreement, without the prior written approval of City. Any such attempt to assign this Agreement without the City’s consent shall be null and void and shall confer no rights or privileges upon the purported assignee. In addition to the foregoing, prior to the expiration of the term of the Regulatory Agreement, except as expressly permitted by this Agreement, Developer shall not undergo any significant change of ownership without the prior written approval of City. For purposes of this Agreement, a “significant change of ownership” shall mean a transfer of the beneficial interest of more than forty-nine percent (49%) in aggregate of the present ownership and /or control of Developer, taking all transfers into account on a cumulative basis; provided however, neither the admission of an investor limited partner(s), nor the transfer by the investor limited partner(s) to subsequent limited partner(s) shall be restricted by this provision.

7.3 Permitted Transfers. Notwithstanding any contrary provision hereof, the prohibitions set forth in this Article shall not be deemed to prevent: (i) the granting of utility easements or permits to facilitate development of the Property; (ii) the dedication of any property required pursuant to this Agreement; (iii) the lease of individual units to tenants for occupancy as their principal residence in accordance with the Regulatory Agreement; (iv) assignments creating security interests for the purpose of financing the acquisition, construction or permanent 308
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financing of the Project or the Property in accordance with the approved Financing Plan and subject to the requirements of Article VIII, or Transfers directly resulting from the foreclosure of, or granting of a deed in lieu of foreclosure of, such a security interest; (v) a Transfer to entity which is under the direct control or under common control with The Related Companies of California LLC or in which The Related Companies of California LLC is the sole member or the general partner (“Controlled Affiliate”); and (vi) any permitted transfer or assignment of Developer’s leasehold interest in the Property or any portion thereof under the ground lease whereby Developer obtained its leasehold interest in the Property. Notwithstanding anything the above or anything to the contrary in this Agreement, the replacement of Developer’s general partner in accordance with the terms of the Developer’s partnership agreement shall not be prohibited and shall not constitute a default under any of the Loan Documents or accelerate the maturity of the Loan. Notwithstanding any provision of this Section 7.3, no permitted transaction under this Section 7.3 will alter any obligation under the Regulatory Agreement.

7.4 Requirements for Proposed Transfers. The City may, in the exercise of its sole discretion, consent to a proposed Transfer of this Agreement, the Property or portion thereof if all of the following requirements are met (provided however, the requirements of this Section 7.4 shall not apply to Transfers described in Section 7.3):
(i) The proposed transferee demonstrates to the City’s satisfaction that it has the qualifications, experience and financial resources necessary and adequate as may be reasonably determined by the City to competently complete construction of the Project and to otherwise fulfill the obligations undertaken by the Developer under this Agreement.
(ii) The Developer and the proposed transferee shall submit for City review and approval all instruments and other legal documents proposed to effect any Transfer of this Agreement, the Property or interest therein together with such documentation of the proposed transferee’s qualifications and development capacity as the City may reasonably request.
(iii) The proposed transferee shall expressly assume all of the rights and obligations of the Developer under this Agreement, the Regulatory Agreement, the City Documents arising after the effective date of the Transfer and all obligations of Developer arising prior to the effective date of the Transfer (unless Developer expressly remains responsible for such obligations) and shall agree to be subject to and assume all of Developer’s obligations pursuant to the Conditions of Approval and all other conditions, and restrictions set forth in this Agreement and the Regulatory Agreement. (iv) The Transfer shall be effectuated pursuant to a written instrument satisfactory to the City in form recordable in the Official Records.

Consent to any proposed Transfer may be given by the City Manager unless the City Manager, in his or her discretion, refers the matter of approval to the City Council. If the City rejects a proposed Transfer, the City, as applicable, shall provide the reasons for such rejection in writing within thirty (30) days following receipt of written request by Developer, and 309
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representatives of the City shall meet with Developer and the proposed transferee to discuss in good faith the reasons for the rejection and Developer’s and transferee’s responses thereto.

7.5 Effect of Transfer without City Consent.

7.5.1 In the absence of specific written agreement by the City, no Transfer by Developer shall be deemed to relieve the Developer or any other party from any obligation under this Agreement or the Regulatory Agreement.

7.5.2 Without limiting any other remedy City may have under this Agreement, or under law or equity, this Agreement may be terminated by City if without the prior written approval of the City, Developer assigns or Transfers this Agreement or the Property prior to the City’s issuance of a Certificate of Completion. This Section 7.5.2 shall not apply to Transfers described in clauses (i) through (iv) of Section 7.3).

7.6 Recovery of City Costs. Developer shall reimburse City for all costs, including but not limited to attorneys’ fees, incurred in reviewing instruments and other legal documents proposed to affect a Transfer under this Agreement and in reviewing the qualifications and financial resources of a proposed successor, assignee, or transferee within ten days following City’s delivery to Developer of an invoice detailing such costs. This Section 7.6 shall not apply to Transfers described in Section 7.3.

ARTICLE VIII

SECURITY FINANCING AND RIGHTS OF MORTGAGEES

8.1 Mortgages and Deeds of Trust for Development. Mortgages and deeds of trust, or any other reasonable security instrument are permitted to be placed upon the Property only for the purpose of securing loans approved pursuant to the approved Financing Plan for the purpose of financing the acquisition of the Property, the design and construction of the Improvements, other expenditures reasonably necessary for development of the Property pursuant to this Agreement, and the rehabilitation and/or refinancing of the Project. Developer shall not enter into any conveyance for such financing without the prior written approval of the City Manager or his or her designee. As used herein, the terms “mortgage” and “deed of trust” shall mean any security instrument used in financing real estate acquisition, construction and land development.

8.1.1 Regulatory Agreement to be Senior to Mortgages. City agree that if required by construction and/or permanent lenders the Memorandum of this Agreement, the Deed of Trust, and the Regulatory Agreement may be subordinated to deeds of trust or other security instruments approved by the City pursuant to a written instrument conforming to the requirements of California Health and Safety Code Section 33334.14(a)(4) and including without limitation, the provisions set forth in Section 8.4 below.

8.2 Holder Not Obligated to Construct. The holder of any mortgage, deed of trust authorized by this Agreement shall not be obligated to construct or complete the Improvements or to guarantee such construction or completion. Nothing in this Agreement shall be deemed to permit or authorize any such holder to devote the Property or any portion thereof to any uses, or 310
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to construct any improvements thereon, other than those uses or improvements provided for or authorized by this Agreement.

8.3 Notice of Default and Right to Cure. Whenever City delivers any notice of default hereunder, City shall concurrently deliver a copy of such notice to each holder of record of any mortgage or deed of trust secured by the Property provided that City has been provided with the address for delivery of such notice. City shall have no liability to any such holder for any failure by the City to provide such notice to such holder. Each such holder shall have the right, but not the obligation, at its option, to cure or remedy any such default or breach.

8.4 City Right to Cure Defaults. In the event of a breach or default by Developer under a mortgage or deed of trust secured by the Property, City may (but has no obligation to) cure the default, without acceleration of the subject loan, following prior notice thereof to the holder of such instrument and Developer. In such event, Developer shall be liable for, and City shall be entitled to reimbursement from Developer for all costs and expenses incurred by City associated with and attributable to the curing of the default or breach and such sum shall constitute a part of the indebtedness secured by the Deed of Trust.

8.5 Holder to be Notified. Developer, for itself, its successors and assigns hereby warrants and agrees that each term contained herein dealing with security financing and rights of holders shall be either inserted into the relevant deed of trust or mortgage or acknowledged by the holder prior to its creating any security right or interest in the Property.

8.6 Modifications to Agreement. City shall not unreasonably withhold is consent to modifications of this Agreement requested by Project lenders or investors provided such modifications do not alter City’s substantive rights and obligations under this Agreement.

8.7 Estoppel Certificates. Any Party shall, at any time, and from time to time, within thirty (30) days after receipt of written request from the other Party, execute and deliver to such Party a written statement certifying that, to the knowledge of the certifying Party: (i) this Agreement is in full force and effect and a binding obligation of the Parties (if such be the case), (ii) this Agreement has not been amended or modified, or if so amended, identifying the amendments, and (iii) the requesting Party is not in default in the performance of its obligations under this Agreement, or if in default, describing the nature of any such defaults.

ARTICLE IX

ENVIRONMENTAL MATTERS

9.1 No City Liability; Developer’s Covenants. City shall not be responsible for the cost of any soil, groundwater or other environmental remediation or other response activities for any Hazardous Materials, if any, existing or occurring on the Property or any portion thereof, and Developer shall be solely responsible for all actions and costs associated with any such activities required by any regulatory agency with jurisdiction over the Property and/or required for the development of the Project, the Property, or any portion thereof. Upon receipt of any notice regarding the presence, release or discharge of Hazardous Materials in, on or under the Property, or any portion thereof, Developer (as long as Developer owns the property which is the subject of such notice) agrees to timely initiate and diligently pursue and complete all appropriate 311
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response, remediation and removal actions for the presence, release or discharge of such Hazardous Materials within such deadlines as specified by applicable Environmental Laws.

Developer hereby covenants and agrees that:
(1) Developer shall not knowingly permit the Project or the Property or any portion of either to be a site for the use, generation, treatment, manufacture, storage, disposal or transportation of Hazardous Materials or otherwise knowingly permit the presence or release of Hazardous Materials in, on, under, about or from the Project or the Property with the exception of any previously disclosed existing conditions on the Property and cleaning supplies and other materials customarily used in construction, rehabilitation, use or maintenance of residential property and used, stored and disposed of in compliance with Hazardous Materials Laws, and
(2) Developer shall keep and maintain the Project and the Property and each portion thereof in compliance with, and shall not cause or permit the Project or the Property or any portion of either to be in violation of, any Hazardous Materials Laws.

9.2 Environmental Indemnification. Developer shall indemnify, defend (with counsel approved by City) and hold the Indemnitees harmless from and against any and all Claims including without limitation any expenses associated with the investigation, assessment, monitoring, response, removal, treatment, abatement or remediation of Hazardous Materials and administrative, enforcement or judicial proceedings resulting, arising, or based directly or indirectly in whole or in part, upon (i) the presence, release, use, generation, discharge, storage or disposal or the alleged presence, release, discharge, storage or disposal of any Hazardous Materials on, under, in or about, or the transportation of any such Hazardous Materials to or from, the Property, or (ii) the failure of Developer, Developer’s employees, agents, contractors, subcontractors, or any person acting on behalf of any of the foregoing to comply with Hazardous Materials Laws or the covenants set forth in Section 9.1. The foregoing indemnity shall further apply to any residual contamination in, on, under or about the Property or affecting any natural resources, and to any contamination of any property or natural resources arising in connection with the generation, use, handling, treatment, storage, transport or disposal of any such Hazardous Materials, and irrespective of whether any of such activities were or will be undertaken in accordance with Hazardous Materials Laws. The provisions of this Section 9.2 shall survive the issuance of a Certificate of Completion for the Project and the expiration or earlier termination of this Agreement. Developer’s indemnification obligation under this Section 9.2 shall not apply to acts described in clause (i) above caused by the gross negligence or willful misconduct of an Indemnitee.

9.2.1 No Limitation. Developer hereby acknowledges and agrees that Developer’s duties, obligations and liabilities under this Agreement, including, without limitation, under Section 9.2 above, are in no way limited or otherwise affected by any information the City may have concerning the Property and/or the presence in, on, under or about the Property of any Hazardous Materials, whether the City obtained such information from the Developer or from its own investigations. It is further agreed that City do not and shall not waive any rights against Developer that they may have by reason of this indemnity and hold harmless agreement because of the acceptance by City, or the deposit with City by Developer, of any of the insurance policies described in this Agreement. 312
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9.3 Hazardous Materials. As used herein, the term “Hazardous Materials” means any substance, material or waste which is or becomes regulated by any federal, state or local governmental authority, and includes without limitation (i) petroleum or oil or gas or any direct or indirect product or by-product thereof; (ii) asbestos and any material containing asbestos; (iii) any substance, material or waste regulated by or listed (directly or by reference) as a “hazardous substance”, “hazardous material”, “hazardous waste”, “toxic waste”, “toxic pollutant”, “toxic substance”, “solid waste” or “pollutant or contaminant” in or pursuant to, or similarly identified as hazardous to human health or the environment in or pursuant to, the Toxic Substances Control Act [15 U.S.C. 2601, et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, et seq.], the Hazardous Materials Transportation Authorization Act [49 U.S.C. Section 5101, et seq.], the Resource Conservation and Recovery Act [42 U.S.C. 6901, et seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251], the Clean Air Act [42 U.S.C. Section 7401, et seq.], the California Underground Storage of Hazardous Substances Act [California Health and Safety Code Section 25280, et seq.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300, et seq.], the California Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enforcement Act [California Health and Safety Code Section 25249.5, et seq.], and the Porter-Cologne Water Quality Control Act [California Water Code Section 13000, et seq.], as they now exist or are hereafter amended, together with any regulations promulgated thereunder; (iv) any substance, material or waste which is defined as such or regulated by any “Superfund” or “Superlien” law, or any Environmental Law; or (v) any other substance, material, chemical, waste or pollutant identified as hazardous or toxic and regulated under any other federal, state or local environmental law, including without limitation, asbestos, polychlorinated biphenyls, petroleum, natural gas and synthetic fuel products and by-products.

9.4 Environmental Laws. As used herein, the term “Environmental Laws” means all federal, state or local statutes, ordinances, rules, regulations, orders, decrees, judgments or common law doctrines, and provisions and conditions of permits, licenses and other operating authorizations regulating, or relating to, or imposing liability or standards of conduct concerning (i) pollution or protection of the environment, including natural resources; (ii) exposure of persons, including employees and agents, to Hazardous Materials (as defined above) or other products, raw materials, chemicals or other substances; (iii) protection of the public health or welfare from the effects of by-products, wastes, emissions, discharges or releases of chemical substances from industrial or commercial activities; (iv) the manufacture, use or introduction into commerce of chemical substances, including without limitation, their manufacture, formulation, labeling, distribution, transportation, handling, storage and disposal; or (iv) the use, release or disposal of toxic or hazardous substances or Hazardous Materials or the remediation of air, surface waters, groundwaters or soil, as now or may at any later time be in effect, including but not limited to the Toxic Substances Control Act [15 U.S.C. 2601, et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, et seq.], the Hazardous Materials Transportation Authorization Act [49 U.S.C. Section 5101, et seq.], the Resource Conservation and Recovery Act [42 U.S.C. 6901, et seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251], the Clean Air Act [42 U.S.C. Section 7401, et seq.], the California Underground Storage of Hazardous Substances Act [California Health and Safety 313
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Code Section 25280, et seq.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300, et seq.], the California Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enforcement Act [California Health and Safety Code Section 25249.5, et seq.], and the PorterCologne Water Quality Control Act [California Water Code Section 13000, et seq.], as each of the foregoing now exist or are hereafter amended, together with any regulations promulgated thereunder.

ARTICLE X

DEFAULTS, REMEDIES AND TERMINATION

10.1 Event of Developer Default. The following events shall constitute an event of default on the part of Developer (“Event of Developer Default”):
(a) Developer fails to commence or complete construction of the Project within the times set forth in Section 3.6, or subject to force majeure, abandons or suspends construction of the Project prior to completion for a period of sixty (60) days or more; (b) Developer fails to pay when due the principal and interest (if any) payable under the Note and such failure continues for thirty (30) days after City notifies Developer thereof in writing;
(c) A Transfer occurs, either voluntarily or involuntarily, in violation of Article VII; (d) Developer fails to maintain insurance on the Property and the Project as required pursuant to this Agreement, and Developer fails to cure such default within ten (10) days; (e) Subject to Developer’s right to contest the following charges pursuant to Section

6.3, if Developer fails to pay prior to delinquency taxes or assessments due on the Property or the Project or fails to pay when due any other charge that may result in a lien on the Property or the Project, and Developer fails to cure such default within 30 days of date of delinquency, but in all events upon the imposition of any such tax or other lien; (f) A default is declared in writing under any loan secured by a mortgage, deed of trust or other security instrument recorded against the Property and remains uncured beyond any applicable cure period such that the holder of such security instrument has the right to accelerate repayment of such loan;
(g) Any representation or warranty contained in this Agreement or in any financial statement, certificate or report submitted to the City in connection with this Agreement or Developer’s request for the Loan proves to have been false in any material and adverse respect when made and continues to be materially adverse to the City; (h) If, pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors ("Bankruptcy Law"), Developer (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Developer in an involuntary case; (iii) consents to the appointment of a trustee, 314
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receiver, assignee, liquidator or similar official for Developer; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due; (i) A court of competent jurisdiction shall have made or entered any decree or order (1) adjudging the Developer to be bankrupt or insolvent, (2) approving as properly filed a petition seeking reorganization of the Developer or seeking any arrangement for Developer under bankruptcy law or any other applicable debtor's relief law or statute of the United States or any state or other jurisdiction, (3) appointing a receiver, trustee, liquidator, or assignee of the Developer in bankruptcy or insolvency or for any of its properties, or (4) directing the winding up or liquidation of the Developer;
(j) Developer shall have assigned its assets for the benefit of its creditors (other than pursuant to a mortgage loan) or suffered a sequestration or attachment of or execution on any substantial part of its property, unless the property so assigned, sequestered, attached or executed upon shall have been returned or released within sixty (60) days after such event (unless a lesser time period is permitted for cure under any other mortgage on the Property, in which event such lesser time period shall apply under this subsection as well) or prior to any sooner sale pursuant to such sequestration, attachment, or execution;
(k) The Developer shall have voluntarily suspended its business or Developer shall have been dissolved or terminated;
(l) An event of default arises under this Agreement, the Regulatory Agreement, or any City Document and remains uncured beyond any applicable cure period; or (m) Developer defaults in the performance of any term, provision, covenant or agreement contained in this Agreement other than an obligation enumerated in this Section 10.1 and unless a shorter cure period is specified for such default, the default continues for ten (10) days in the event of a monetary default or thirty (30) days in the event of a nonmonetary default after the date upon which City shall have given written notice of the default to Developer; provided however, if the default is of a nature that it cannot be cured within 30 days, a Developer Event of Default shall not arise hereunder if Developer commences to cure the default within thirty (30) days and thereafter prosecutes the curing of such default with due diligence and in good faith to completion and in no event later than ninety (90) days after receipt of notice of the default or such longer period as the City may allow.

Developer’s limited partners (the “Limited Partners”) shall have the right to cure any default of Developer hereunder and any of the Loan Documents upon the same terms and conditions afforded to Developer. Provided that City has been given written notice of the address for delivery of notices to the Limited Partners, City shall provide any notice of default hereunder to the Limited Partners concurrently with the provision of such notice to Developer, and as to the Limited Partners, the cure periods specified herein shall commence upon the date of delivery of such notice in accordance with Section 12.3.
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10.2 City Default. An event of default on the part of City (“Event of City Default”) shall arise hereunder if City fails to keep, observe, or perform any of its covenants, duties, or obligations under this Agreement, and the default continues for a period of thirty (30) days after written notice thereof from Developer to City, or in the case of a default which cannot with due diligence be cured within thirty (30) days, City fails to commence to cure the default within thirty (30) days of such notice and thereafter fails to prosecute the curing of such default with due diligence and in good faith to completion.

10.3 City’s Right to Terminate Agreement. If an Event of Developer Default shall occur and be continuing beyond any applicable cure period, then City shall, in addition to other rights available to it under law or this Agreement, have the right to terminate this Agreement. If City makes such election, City shall give written notice to Developer and to any mortgagee entitled to such notice specifying the nature of the default and stating that this Agreement shall expire and terminate on the date specified in such notice, and upon the date specified in the notice, this Agreement and all rights of Developer under this Agreement, shall expire and terminate.

10.4 City’s Remedies and Rights Upon an Event of Developer Default. Upon the occurrence of an Event of Developer Default and the expiration of any applicable cure period, City shall have all remedies available to them under law or equity, including, but not limited to the following, City may, at its election, without notice to or demand upon Developer, except for notices or demands required by law or expressly required pursuant to this Agreement, the Regulatory Agreement, or the City Documents, exercise one or more of the following remedies:
(a) Accelerate and declare the balance of the Note and interest accrued thereon immediately due and payable;
(b) Seek specific performance to enforce the terms of the Regulatory Agreement; (c) Foreclose on the Property pursuant to the Deed of Trust; (d) Pursue any and all other remedies available under law to enforce the terms of this Agreement, the Regulatory Agreement, and the City Documents and City’s rights thereunder.

10.5 Developer’s Remedies Upon an Event of City Default. Upon the occurrence of a City Event of Default, in addition to pursuing any other remedy allowed at law or in equity or otherwise provided in this Agreement, Developer may bring an action for equitable relief seeking the specific performance of the terms and conditions of this Agreement, and/or enjoining, abating, or preventing any violation of such terms and conditions, and/or seeking to obtain any other remedy consistent with the purpose of this Agreement.

10.6 Remedies Cumulative; No Consequential Damages. Except as otherwise expressly stated in this Agreement, the rights and remedies of the Parties are cumulative, and the exercise by any Party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different time, of any other rights or remedies for the same or any other default 316
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by the other Party. Notwithstanding anything to the contrary set forth herein, a party’s right to recover damages in the event of a default shall be limited to actual damages and shall exclude consequential damages.

10.7 Inaction Not a Waiver of Default. No failure or delay by any Party in asserting any of its rights and remedies as to any default shall operate as a waiver of such default or of any such rights or remedies, nor deprive any Party of its rights to institute and maintain any action or proceeding which it may deem necessary to protect, assert or enforce any such rights or remedies in the same or any subsequent default.

ARTICLE XI
INDEMNITY AND INSURANCE.

11.1 Indemnity. Developer shall indemnify, defend (with counsel approved by City) and hold Indemnitees harmless from and against any and all Claims, including without limitation, Claims arising directly or indirectly, in whole or in part, as a result of or in connection with Developer’s or Developer’s contractors, subcontractors, agents or employees development, construction, improvement, operation, ownership or maintenance of the Project or the Property, or any part thereof or otherwise arising out of or in connection with Developer’s performance under this Agreement. Developer’s indemnification obligations under this Section 11.1 shall not extend to Claims resulting from the gross negligence or willful misconduct of Indemnitees. The provisions of this Section 11.1 shall survive the issuance of a Certificate of Completion for the Project and the expiration or earlier termination of this Agreement. It is further agreed that City do not and shall not waive any rights against Developer that they may have by reason of this indemnity and hold harmless agreement because of the acceptance by City, or the deposit with City by Developer, of any of the insurance policies described in this Agreement.

11.2 Liability and Workers Compensation Insurance.
(a) Developer and all contractors working on behalf of Developer on the Project shall maintain a commercial general liability policy in the amount of Two Million Dollars ($2,000,000) combined single limit, Four Million Dollars ($4,000,000) annual aggregate, or such other policy limit as City may require in their reasonable discretion, including coverage for bodily injury, property damage, products, completed operations and contractual liability coverage. Such policy or policies shall be written on an occurrence basis and shall name the Indemnitees as additional insureds.
(b) Developer and all contractors working on behalf of Developer shall maintain a comprehensive automobile liability coverage in the amount of One Million Dollars ($1,000,000), combined single limit including coverage for owned and non-owned vehicles and shall furnish or cause to be furnished to City evidence satisfactory to City that Developer and any contractor with whom Developer has contracted for the performance of work on the Property or otherwise pursuant to this Agreement carries workers' compensation insurance as required by law.

Automobile liability policies shall name the Indemnitees as additional insureds. (c) Upon commencement of construction and continuing until issuance of a Certificate of Completion, Developer and all contractors working on behalf of Developer shall 317
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maintain a policy of builder's all-risk insurance in an amount not less than the full insurable cost of the Project on a replacement cost basis naming City as a loss payee. (d) Developer shall maintain property insurance covering all risks of loss (other than earthquake), including flood (if required) for 100% of the replacement value of the Project with deductible, if any, in an amount acceptable to City, naming City as a loss payee. (e) Companies writing the insurance required hereunder shall be licensed to do business in the State of California. Insurance shall be placed with insurers with a current A.M.

Best's rating of no less than A-VIII. The Commercial General Liability and comprehensive automobile policies required hereunder shall name the Indemnitees as additional insureds.

Builder’s Risk and property insurance shall name City as a loss payee. (f) Prior to closing of the Loan, Developer shall furnish City with certificates of insurance in form acceptable to City evidencing the required insurance coverage and duly executed endorsements evidencing such additional insured status. The certificates shall contain a statement of obligation on the part of the carrier to notify City of any material adverse change, cancellation, termination or non-renewal of the coverage at least thirty (30) days in advance of the effective date of any such material adverse change, cancellation, termination or non-renewal. (g) If any insurance policy or coverage required hereunder is canceled or reduced, Developer shall, within fifteen (15) days after receipt of notice of such cancellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with City a certificate showing that the required insurance has been reinstated or provided through another insurance company or companies. Upon failure to so file such certificate, City may, without further notice and at its option, procure such insurance coverage at Developer’s expense, and Developer shall promptly reimburse City for such expense upon receipt of billing from City. (h) Coverage provided by Developer shall be primary insurance and shall not be contributing with any insurance, or self-insurance maintained by City, and the policies shall so provide. The insurance policies shall contain a waiver of subrogation for the benefit of the City.

Developer shall furnish the required certificates and endorsements to City prior to the commencement of construction of the Project, and shall provide City with certified copies of the required insurance policies upon request of City.

ARTICLE XII

MISCELLANEOUS PROVISIONS

12.1 No Brokers. Each Party warrants and represents to the other that no person or entity can properly claim a right to a real estate commission, brokerage fee, finder's fee, or other compensation with respect to the transactions contemplated by this Agreement. Each Party agrees to defend, indemnify and hold harmless the other Party from any claims, expenses, costs or liabilities arising in connection with a breach of this warranty and representation. The terms of this Section shall survive the expiration or earlier termination of this Agreement.

12.2 Enforced Delay; Extension of Times of Performance. Subject to the limitations set forth below, performance by any Party shall not be deemed to be in default, and all performance 318
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and other dates specified in this Agreement shall be extended where delays are due to: war, insurrection, strikes, lockouts, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics, quarantine restrictions, freight embargoes, governmental restrictions or priority, litigation, including court delays, unusually severe weather, acts or omissions of the other Parties, acts or failures to act of any other public or governmental agency or entity (other than the acts or failures to act of City which shall not excuse performance by City), or any other cause beyond the affected Party’s reasonable control. An extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the Party claiming such extension is sent to the other Parties within thirty (30) days of the commencement of the cause and such extension is not rejected in writing by the other Parties within ten (10) days of receipt of the notice. None of the Parties shall unreasonably withhold consent to an extension of time pursuant to this Section.

Times of performance under this Agreement may also be extended in writing by the mutual agreement of Developer and City (acting in the discretion of its City Manager unless he or she determine in his or her discretion to refer such matter to the City Council). City and Developer acknowledge that adverse changes in economic conditions, either of the affected Party specifically or the economy generally, changes in market conditions or demand, and/or inability to obtain financing to complete the work of Improvements shall not constitute grounds of enforced delay pursuant to this Section. Each Party expressly assumes the risk of such adverse economic or market changes and/or financial inability, whether or not foreseeable as of the Effective Date.

12.3 Notices. Except as otherwise specified in this Agreement, all notices to be sent pursuant to this Agreement shall be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by:
(i) personal delivery, in which case notice is effective upon delivery; (ii) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered on receipt if delivery is confirmed by a return receipt; (iii) nationally recognized overnight courier, with charges prepaid or charged to the sender’s account, in which case notice is effective on delivery if delivery is confirmed by the delivery service;
City: City of South Lake Tahoe
1901 Lisa Maloff Way
South Lake Tahoe, CA 96150
Attention: City Manager
With a copy to:

City Attorney
City of South Lake Tahoe
1901 Lisa Maloff Way, Suite 300
South Lake Tahoe, CA 96150
Developer: Sugar Pine Phase 3 Housing Partners, L.P.
c/o Related California
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44 Montgomery Street, Suite 1310
San Francisco, California 94104 |
Attention: Ann Silverberg
With a copy to:

St. Joseph Sugar Pine Village LLC
c/o St. Joseph Community Land Trust
312 Dorla Court, Suite 205
PO Box 12032
Zephyr Cove, NV 89448
Attn: Executive Director
With a copy to: ___________________
With a copy to: ___________________

12.4 Attorneys’ Fees. If any Party fails to perform any of its obligations under this Agreement, or if any dispute arises between the Parties concerning the meaning or interpretation of any provision hereof, then the prevailing party in any proceeding in connection with such dispute shall be entitled to the costs and expenses it incurs on account thereof and in enforcing or establishing its rights hereunder, including, without limitation, court costs and reasonable attorneys' fees and disbursements.

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

12.6 Binding on Successors. Subject to the restrictions on Transfers set forth in Article VII, this Agreement shall bind and inure to the benefit of the Parties and their respective permitted successors and assigns. Any reference in this Agreement to a specifically named party shall be deemed to apply to any permitted successor and assign of such party who has acquired an interest in compliance with this Agreement or under law.

12.7 Construction. The section headings and captions used herein are solely for convenience and shall not be used to interpret this Agreement. The Parties acknowledge that this Agreement is the product of negotiation and compromise on the part of both Parties, and the Parties agree, that since all of the Parties have participated in the negotiation and drafting of this Agreement, this Agreement shall not be construed as if prepared by one of the Parties, but rather according to its fair meaning as a whole, as if all Parties had prepared it. 320
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12.8 Action or Approval. Whenever action and/or approval by City is required under this Agreement, the City Manager or his or her designee may act on and/or approve such matter unless specifically provided otherwise, or unless the City Manager determines in his or her discretion that such action or approval requires referral to the City Council for consideration.

12.9 Entire Agreement. This Agreement, including the exhibits listed below, which are attached hereto and incorporated herein by this reference, together with the Regulatory Agreement, and the other City Documents contains the entire agreement between the Parties with respect to the subject matter hereof, and supersedes all prior written or oral agreements, understandings, representations or statements between the Parties with respect to the subject matter hereof.

Exhibit A Legal Description of Property
Exhibit B Form of Certificate of Completion
Exhibit C Form of Regulatory Agreement
Exhibit D Form of Promissory Note
Exhibit E Form of Leasehold Deed of Trust
Exhibit F Financing Plan

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

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

12.12 No Third Party Beneficiaries. Nothing contained in this Agreement is intended to or shall be deemed to confer upon any person, other than the Parties and their respective successors and assigns, any rights or remedies hereunder.

12.13 Parties Not Co-Venturers. Nothing in this Agreement is intended to or shall establish the Parties as partners, co-venturers, or principal and agent with one another.

12.14 Non-Liability of Officials, Employees and Agents. No officer, official, employee or agent of City shall be personally liable to Developer or its successors in interest in the event of any default or breach by City or for any amount which may become due to Developer or its successors in interest pursuant to this Agreement.

12.15 Time of the Essence; Calculation of Time Periods. Time is of the essence for each condition, term, obligation and provision of this Agreement. Unless otherwise specified, in 321
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computing any period of time described in this Agreement, the day of the act or event after which the designated period of time begins to run is not to be included and the last day of the period so computed is to be included, unless such last day is not a business day, in which event the period shall run until the next business day. The final day of any such period shall be deemed to end at 5:00 p.m., local time at the Property. For purposes of this Agreement, a “business day” means a day that is not a Saturday, Sunday, a federal holiday or a state holiday under the laws of California.

12.16 Governing Law; Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to principles of conflicts of laws. Any action to enforce or interpret this Agreement shall be filed in the Superior Court of El Dorado County, California or in the Federal District Court for the Northern District of California.

12.17 Financial and Governmental Capacities. Developer agrees that the capacity of the City in this Agreement, the Regulatory Agreement, and the other City Documents shall be only as a lender (“Financial Capacity”), and that nothing herein or therein shall waive, supersede, condition, limit, modify or affect the City's rights to take (or not take) any action in a governmental capacity, including without limitation enacting laws, inspecting structures, reviewing and issuing permits, and all other legislative, administrative, or enforcement functions pursuant to federal, state or local law (“Governmental Capacity”). In addition, nothing in this Agreement, the Regulatory Agreement, and the other City Documents shall supersede or waive any discretionary or regulatory approvals required to be obtained from the City under applicable law.

SIGNATURES ON FOLLOWING PAGE.
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IN WITNESS WHEREOF, the Parties have entered into this Agreement effective as of the date first written above.

CITY:

CITY OF SOUTH LAKE TAHOE,
a municipal corporation
By:

Cristi Creegan, Mayor
APPROVED AS TO FORM:

By:

Heather Stroud, City Attorney
ATTEST:

By:

Susan Blankenship, City Clerk
(signatures continue on following page)
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DEVELOPER: SUGAR PINE PHASE 3 HOUSING PARTNERS, L.P., a California limited partnership
By: St. Joseph Sugar Pine Village, LLC, a
California limited liability company, its
managing general partner
By: St. Joseph Community Land Trust, a
California nonprofit public benefit
corporation, its sole member
By:

Jean Diaz, Executive Director
By: Sugar Pine Phase 3 Housing Development
Co., LLC, a California limited liability
company, its administrative general partner
By:

Ann Silverberg, President
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EXHIBIT A

LEGAL DESCRIPTION
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EXHIBIT “A”

LEGAL DESCRIPTION
PHASE 2A WEST

ALL THAT REAL PROPERTY SITUATED IN THE CITY OF SOUTH LAKE TAHOE, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:

BEING A PORTION OF TRACT 1, AS SAID PARCEL IS SHOWN ON THE RECORD OF SURVEY MAP, FILED DECEMBER 5, 2022, IN MAP BOOK 38 OF RECORD OF SURVEYS AT PAGE 65, EL DORADO COUNTY RECORDS, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

ALL THE PORTION OF THE FOLLOWING DESCRIBED AREA LYING ABOVE THE ELEVATION 6,264.00 FEET:

BEGINNING AT THE MOST SOUTHEASTERLY CORNER OF SAID TRACT 1, SAID POINT LYING ON THE SOUTHWESTERLY LINE OF TATA LANE (50 FEET WIDE) AS SHOWN ON SAID MAP OF TAHOE VALLEY CENTER, UNIT NO. 3;
THENCE ALONG THE BOUNDARY LINES OF SAID TRACT 1 THE FOLLOWING TWO COURSES:

1. NORTH 31°22’30” WEST, 200.00 FEET

2. SOUTH 63°42’00” WEST, 208.56 FEET
THENCE LEAVING THE BOUNDARY LINES OF SAID TRACT 1, SOUTH 31°22’30” WEST 8.01 FEET; THENCE SOUTH 58’37’30” WEST, 78.00 FEET;
THENCE NORTH 31°22’30” WEST, 16.49 FEET;
THENCE SOUTH 58°37’30” WEST, 81.72 FEET;
THENCE NORTH 76°22’30” WEST, 22.20 FEET;
THENCE SOUTH 58°37’30” WEST, 44.38 FEET TO THE BEGINNING OF A NON-TANGENT CURVE TO THE RIGHT, THE RADIUS POINT OF WHICH BEARS SOUTH 84°19’52” WEST, 85.25 FEET FROM SAID POINT;
THENCE ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 10°14’58”, FOR AN ARC LENGTH OF

15.25 FEET;
THENCE SOUTH 08°40’22” WEST, 106.50 FEET;
THENCE SOUTH 26°18’00” EAST, 102.87’ FEET TO THE SOUTHEASTERLY LINE OF SAID TRACT 1; THENCE ALONG SAID SOUTHEASTERLY LINE, NORTH 63°42’00” EAST 514.99 FEET TO THE POINT OF BEGINNING.

CONTAINING AN AREA OF 96,848 SQUARE FEET (2.22 ACRES), MORE OR LESS.

THE VERTICAL DATUM FOR THE ELEVATIONS DESCRIBED HEREIN IS THE NORTH AMERICAN VERTICAL DATUM OF 1988, AS TAKEN FROM THE CITY OF SOUTH LAKE TAHOE BENCHMARK NO. 7- A. ELEVATION TAKEN AS 6293.90 FEET.

THE LAND DESCRIBED HEREON IS SHOWN ON THE ATTACHED PLAT, EXHIBIT “B”, AND IS BY REFERENCE, MADE A PART THEREOF.
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THIS LEGAL DESCRIPTION WAS PREPARED BY ME OR UNDER MY

DIRECTION PURSUANT TO THE REQUIREMENTS OF THE PROFESSIONAL LAND SURVEYOR’S ACT.
05/02/2023
CHRISTIAN CINTEAN, PLS 8941 DATE
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EXHIBIT B

FORM OF CERTIFICATE OF COMPLETION

CERTIFICATE OF COMPLETION
Recording requested by
and when recorded mail to:

EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383
Space above this line for Recorder’s use.

CERTIFICATE OF COMPLETION
This Certificate of Completion (this “Certificate”) is made by the City of South Lake Tahoe, a California municipal corporation (“City”) effective as of ___________.

RECITALS
A. City and SUGAR PINE PHASE 3 HOUSING PARTNERS, L.P., a California limited partnership (“Owner”) entered into that certain Loan Agreement dated as of _________, 2023 (the “Loan Agreement”) regarding the development of a residential housing project on those certain leasehold premises located in South Lake Tahoe, California, as more particularly described on Exhibit A attached hereto and incorporated herein (the “Property”). Capitalized terms used herein without definition shall have the meaning ascribed to such terms in the Loan Agreement.

B. Pursuant to Section 3.15 of the Loan Agreement, the City is required to furnish the Owner or its successors with a Certificate of Completion upon completion of construction of the Project, issuance of a final Certificate of Occupancy by the City, and written request in accordance with the Loan Agreement.

C. The City has determined that construction of the Project has been satisfactorily completed in accordance with the Loan Agreement.

NOW, THEREFORE, Agency hereby certifies as follows:

1. Development of the Project has been satisfactorily completed in conformance with the Loan Agreement.

2. All use, maintenance and nondiscrimination covenants contained in the Loan Agreement shall remain in effect and enforceable in accordance with the Loan Agreement. This Certificate does not constitute evidence of Owner’s compliance with those covenants in the Loan Agreement that survive the issuance of this Certificate, including without limitation, compliance 328
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with the Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants entered into pursuant to the Loan Agreement and recorded in the Official Records as Instrument No. __________

3. This Certificate does not constitute evidence of compliance with or satisfaction of any obligation of Owner to any holder of a deed of trust securing money loaned to finance the development of the Property, Improvements or any part thereof and does not constitute a notice of completion under California Civil Code Section 3093.

4. Nothing contained in this instrument shall modify any provisions of the Loan Agreement or any other document executed in connection therewith.

IN WITNESS WHEREOF, Agency has executed and issued this Certificate of Completion as of the date first written above.

CITY OF SOUTH LAKE TAHOE, a California municipal corporation By: ______________________________
Name: _______________________________
City Manager
ATTEST:

By: _______________________________
City Clerk
APPROVED AS TO FORM:

By: _______________________________
City Attorney
SIGNATURES MUST BE NOTARIZED.
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EXHIBIT C

FORM OF REGULATORY AGREEMENT
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RECORDING REQUESTED BY:

WHEN RECORDED MAIL TO:

City of South Lake Tahoe
1901 Lisa Maloff Way
South Lake Tahoe, CA 96150
Attn: City Manager
APN: _____________ (Space above for Recorder’s use only)

AFFORDABLE HOUSING REGULATORY AGREEMENT
(Sugar Pine Village Phase 1A)
This Affordable Housing Regulatory Agreement (the “Agreement”) is made this ___ of ____________, 2023, by and between the CITY OF SOUTH LAKE TAHOE, a municipal corporation (“City”), and SUGAR PINE PHASE 3 HOUSING PARTNERS, L.P., a California limited partnership (“Developer”).

RECITALS
A. Developer is, pursuant to a Ground Lease (as defined below), acquiring a long-term lease of certain land (“Land”) in the City of South Lake Tahoe, California, and under the Ground Lease will become the owner of certain improvements to be constructed on the Land (“Improvements”). Developer’s leasehold in the Land, together with the Improvements, as more particularly described in Exhibit A, is the “Development.” B. Developer intends to operate the Development as an affordable housing project (the “Project”) comprised of a 60 unit (including one manager's unit) housing project (the “Improvements”), located on the Development.

C. This Agreement is the Regulatory Agreement” and one of the “City Documents” as described in that certain Loan Agreement, dated on or about __________ ____, 2023 between the City and Developer (“Loan Agreement”), which provides for a $4,750,000 loan from the City to the Developer (“City Loan”). This Agreement is, in part, to comply with the City’s obligations to HCD under the PLHA Grant (as defined in the Loan Agreement).

D. As required by the PLHA Grant, as further consideration for the City Loan, and to further the interests of City, Developer has agreed to enter into and record this Agreement. The purpose of this Agreement is to regulate and restrict the occupancy, rents, operation, ownership, and management of the Development and the Project for affordable housing and related uses. The covenants in this Agreement are intended to run with the land and be binding on Developer and its successors and assigns in the Development, notwithstanding payoff of the Loan.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of 331
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which are hereby acknowledged, Developer and City hereby agree as follow:

A. Definitions.

The following terms have the meanings and content set forth in this section wherever used in this Agreement or attached exhibits.
“Affordable Rent” means the total charges for rent and utilities to each Qualifying Household as allowed based on household size, income level and unit size pursuant to rents and income limits published by TCAC.
“City” is the City of South Lake Tahoe.
“City Documents” is defined in Recital C.
“City Loan” is defined in Recital C.
“County” is the County of El Dorado, California.
“Developer” means SUGAR PINE PHASE 3 HOUSING PARTNERS, L.P., a California limited partnership, and its officers, officials, directors, employees, agents and authorized representatives.
“Development” is defined in Recital A.
“Ground Lease” means that certain Ground Lease between the State of California (“Landlord”), acting by and through the Director of the Department of General Services, with the consent of HCD, and Developer (as Lessee), dated on or about ___________ __, 2023 as memorialized by a Memorandum of Ground Lease of the Development dated ___________ __. 2023, and recorded in the Official Records of the County, substantially concurrently herewith, as amended from time to time.
“HCD” means the California Department of Housing and Community Development. “HUD” means the Federal Department of Housing and Urban Development, or successor. “Loan Agreement” is defined in Recital C.
“Lower Income Household” means a household whose annual income does not exceed sixty percent (60%) of the Area Median Income as determined for the El Dorado County HUD Metro FMR Area annually by HUD and adjusted for household size.

In the event that such income determinations are no longer published by HUD, “Median Income” shall mean the median gross yearly income for households in the County, as published periodically by HCD. In the event that such income determinations are no longer published by HCD, or are not updated for a period of at least eighteen months, Lessor shall provide Lessee with other income determinations which are reasonably similar with respect to method of calculation to 332
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these previously published by HCD or HUD.
“PLHA Grant” is defined in Recital C.

Project” means the Units on the Development and any supportive services and programs provided to tenants of the Development.
“Qualifying Household” means a household that qualifies as a Lower Income Household. “Restricted Units” is defined in C.1, below.
“TCAC” means the California Tax Credit Allocation Committee. “Term” means the term of this Agreement described herein. “Unit” means any one of the units in the Project.

B. DEVELOPER'S OBLIGATIONS

1. Compliance with Loan Agreement and PLHA Grant. Developer's actions with respect to the Development shall at all times be in full conformity with all of the requirements of the Loan Agreement and PLHA Grant, including but not limited to the insurance requirements contained therein.

2. Use For Affordable Housing. Developer agrees that, at all times during the Term of this Agreement, a minimum of 59 Units in the Project will be used as affordable housing for Lower Income Households.

3. Term of Agreement. This Agreement shall commence upon completion of the construction of the Project (as evidenced by issuance of a final Certificate of Occupancy) and shall remain in full force and effect for 55-years thereafter, or such other time as may be required to comply with the PLHA Grant, whichever is less.

C. OCCUPANCY AND RENTS

1. Occupancy of Units. During the term of this Agreement, 59 Units in the Project will be used as affordable housing for Lower Income Households (“Restricted Units”).

2. Tenant Selection. Developer shall adopt written tenant selection policies for the Restricted Units that: (i) are reasonably related to program eligibility and the applicant’s ability to perform the obligations of the lease; (ii) are consistent with the purpose of providing housing for Qualifying Households; and (iii) give prompt written notification to any rejected applicant of the grounds for rejection.

3. Nondiscrimination. Developer shall not discriminate or segregate in the use, enjoyment, occupancy, conveyance, lease, sublease, or rental of any units in the Project on the basis of race, color, ancestry, national origin, religion, sex, sexual preference, age, marital status, family status, source of income, physical or mental disability, Acquired Immune Deficiency 333
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Syndrome (AIDS) or AIDS-related conditions (ARC), or any other arbitrary basis. Developer shall include a statement in all advertisements, notices and signs for the availability of Units for rent to the effect that Developer is an Equal Housing Opportunity Provider.

4. Income Certification and Increases In Tenant Income. Developer shall certify the incomes of all prospective tenants in the Restricted Units prior to their initial occupancy of a Unit and shall recertify their incomes annually. If upon recertification, a tenant’s income exceeds the maximum designated for a Lower Income Household, Developer may increase the rent for such tenants to no more than 30% of the tenant’s income and the tenant may be permitted to continue to occupy a Unit in the Project. Developer shall provide City an annual report on the income recertification evidencing that Project occupants meet the requirements of Qualified Households.

5. Rental Charges. Total charges for rent, utilities and related services for each Unit in the Project shall not exceed the Affordable Rent for that Unit. If upon recertification, a tenant’s income exceeds the Qualifying Household limit for the applicable Unit type, Developer may increase the rent for such tenants to no more than 30% of the Tenant’s monthly income less utility and other mandatory charges.

6. Conflicts With Other Regulatory Requirements. The Developer and the City agree and acknowledge that the Project will be financed, in part, with the proceeds of Federal LowIncome Housing Tax Credits (“Tax Credits”) allocated to the Project by TCAC. In the event of any conflict between the methodology of the calculation of income limits, occupancy standards, and/or rents between this Agreement and the policies, procedures and regulations of TCAC, the policies, procedures and regulations of TCAC shall control for purposes of this Agreement.

D. PROPERTY MANAGEMENT.

1. Management Responsibilities. Developer is responsible for all management functions with respect to the Project, including without limitation the selection of tenants, certification and recertification of household size and income, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. City shall have no responsibility over management of the Development or the Project.

2. Review of Management Policies. Developer shall submit its written management policies with respect to the Project and Program to City for its review, and shall amend such policies in any way necessary to insure that such policies comply with the provisions of this Agreement and the requirements of all parties providing financing for the Development and/or the Project.

3. Inspection and Records. Developer shall maintain records that clearly document Developer's performance of its obligations to operate the Development under the terms of this Agreement. Developer shall submit any records to City within ten business days of City's request.

Developer shall permit City to enter and inspect the Project for compliance with obligations under this Agreement upon 72 hours advance notice of such visit by City to Developer or Developer's management agent and to tenants of any Units.
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4. Annual Report. Developer shall submit to City each year, on or prior to the date such report is required to be submitted to TCAC, a report for the preceding calendar year showing the necessary information to allow City to determine Developer's compliance with this Agreement, and within 30 days after receipt of a written request, any other information or completed forms requested by City in order to comply with City reporting requirements.

E. GENERAL PROVISIONS

1. Default and Remedies. In the event of any Developer breach of any agreement or obligation under this Agreement, City shall provide written notice to Developer and Developer’s limited partner of such breach. Developer shall have an opportunity to cure the breach within 30 days from Developer's receipt of such written notice or such longer period of time as City determines is necessary to cure the breach if Developer diligently undertakes to cure. If Developer fails to perform a timely cure, City may proceed with any remedy provided under the City Documents (subject to any subordination agreement) allowed by law to enforce the terms and conditions of this Agreement. A cure by any other Project lender or Developer’s limited partner shall be accepted or rejected on the same basis as if made or tendered by Developer.

2. Binding Upon Successors. All provisions of this Agreement shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors-in-interest, transferee, and assigns of Developer and City, and shall run with the land for the full term of this Agreement, regardless of any subordination, cancellation, surrender, amendment or modification of the Ground Lease, assignment or any conveyance or transfer of the Development or Project or portion thereof, or any payment, prepayment, modification or expiration of any other City Documents.

3. Non-Liability of Officials, Employees and Agents. No officers, directors, employees and agents of City shall be personally liable to Developer for any obligation created under the terms of this Agreement.

4. Indemnity. Developer shall indemnify and hold City free and harmless against any losses, damages, liabilities, claims, demands, judgments, actions, court costs, and legal or other expenses (including reasonable attorneys' fees) which City may incur as a direct or indirect consequence of Developer's failure to perform any obligations as and when required by this Agreement. This indemnity obligation shall not extend to any claim arising solely from the gross negligence or willful acts of City, its agents, and its employees. Developer's duty to indemnify City shall survive the term of this Agreement. Notwithstanding the foregoing or anything else to the contrary contained herein, no foreclosing lender or its successors and/or assigns shall be responsible or liable for any indemnity obligations that accrue hereunder prior to the completion of foreclosure (or acceptance of a deed in lieu thereof).

5. Intentionally Deleted.

6. Governing Law. This Agreement shall be interpreted under and be governed by the laws of the State of California applicable to contracts executed and wholly performed in that State, except for those provisions preempted by federal law.

7. Agreement Controls. Notwithstanding any provisions of the Loan Agreement, in the event that any provisions of this Agreement and Loan Agreement conflict, the terms of this 335
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Agreement shall control.

8. Consents and Approvals. Any consent or approval of City required under this Agreement shall not be unreasonably withheld. Any approval must be in writing and executed by an authorized representative of City.

9. Notices, Demands and Communication. Formal notices, demands and communications between Developer and City shall be sufficiently given and shall not be deemed given unless dispatched by (i) delivered personally or by courier, (ii) sent by overnight express delivery, or (iii) mailed by registered or certified mail (return receipt requested), postage prepaid, to the principal offices of Developer and City as follows:

City:

City of South Lake Tahoe
1901 Lisa Maloff Way
South Lake Tahoe, CA 96150
Attention: City Manager
With a copy to:

City Attorney
City of South Lake Tahoe
1901 Lisa Maloff Way, Suite 300
South Lake Tahoe, CA 96150
Developer:

Sugar Pine Phase 3 Housing Partners, L.P.
c/o Related California
44 Montgomery Street, Suite 1310
San Francisco, California 94104
Attention: Ann Silverberg
With a copy to
St. Joseph Sugar Pine Village Phase 2A LLC
c/o St. Joseph Community Land Trust
1041 Lyons Avenue
South Lake Tahoe, CA 92612
Attn: Executive Director
With a copy to
c/o _________________________
_________________________
_________________________
Attention: _________________________
Fax No.: _________________________

10. Relationship of Parties. The relationship of Developer and City during the term of this Agreement is solely that of borrower and lender and shall not be construed as a joint venture, equity venture, or partnership.

11. Waiver. Any waiver by City of any obligation in this Agreement must be in writing. No waiver will be implied from any delay or failure by City to take action on any breach or default of Developer or to pursue any remedy allowed under this Agreement, the Loan Agreement or applicable law. Any extension of time granted to Developer to perform any 336
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obligation under this Agreement shall not operate as a waiver or release from any of its obligations under this Agreement. Consent by City to any act or omission by Developer shall not be construed to be consent to any other or subsequent act or omission or to waive the requirement for City's written consent to future waivers.

12. Amendments and Modifications. Any amendments or modifications to this Agreement must be in writing, and shall be made only if executed by both Developer and City.

13. Severability. Every provision of this Agreement is intended to be severable. If any provision of this Agreement shall be held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, City and Developer have caused this Regulatory Agreement to be executed by their duly authorized representatives.

CITY: CITY OF SOUTH LAKE TAHOE,
a municipal corporation
By:

Cristi Creegan, Mayor
APPROVED AS TO FORM:

By:

Heather Stroud, City Attorney
ATTEST:

By:

Susan Blankenship, City Clerk
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Developer:

SUGAR PINE PHASE 3 HOUSING PARTNERS, L.P., a California limited partnership By: Related/Sugar Pine Phase 3 Development Co., LLC,
a California limited liability company, its administrative general partner

By: ________________________________
Ann Silverberg, President
By: St. Joseph Sugar Pine Village Phase 2A LLC,
a California limited liability company, its managing general partner

By: St. Joseph Community Land Trust,
a California nonprofit public benefit corporation,
its manager
By: __________________________
Jean Diaz, Executive Director
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A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

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

I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

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

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

I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature_____________________________
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EXHIBIT A

LEASEHOLD LEGAL DESCRIPTION
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EXHIBIT D

FORM OF SECURED PROMISSORY NOTE
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SECURED PROMISSORY NOTE
(PLHA Loan)
$4,750,000 South Lake Tahoe, California
August 1, 2022
FOR VALUE RECEIVED, Sugar Pine Phase 3 Housing Partners, L.P., a California limited partnership (“Borrower”), promises to pay to the South Lake Tahoe, a California municipal corporation (“City”), in lawful money of the United States of America, the principal sum of Four Million Seven Hundred Fifty Thousand Dollars ($4,750,000) so much thereof as may be advanced by City pursuant to the Loan Agreement referred to below, together with interest on the outstanding principal balance in accordance with the terms and conditions described herein. Interest shall accrue on the outstanding principal balance at a rate equal to zero percent (0%) simple interest per annum, commencing upon the date of disbursement thereof. Interest shall be calculated on the basis of a year of 365 days, and charged for the actual number of days elapsed.

This Secured Promissory Note (this “Note”) has been executed and delivered pursuant to and in accordance with a Loan Agreement executed by and between Borrower and City, dated as of _________ 1, 2023 (the “Loan Agreement”), and is subject to the terms and conditions of the Loan Agreement, which is by this reference incorporated herein and made a part hereof.

Capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Loan Agreement.

This Note is secured by a Leasehold Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (“Deed of Trust”) dated as of the date hereof, executed by Borrower for the benefit of City and encumbering the property described therein. City shall be entitled to the benefits of the security provided by the Deed of Trust and shall have the right to enforce the covenants and agreements contained herein, in the Regulatory Agreement, and the Loan Agreement. The Regulatory Agreement shall remain effective for the full term thereof and shall survive the repayment of this Note.

PAYMENTS

1.1 PAYMENT DATES; MATURITY DATE. All payments on this Note shall be deferred until the Maturity Date. The entire outstanding principal balance of this Note, together with interest accrued thereon and any other sums accrued hereunder shall be payable in full on the fifty-fifth (55th) anniversary of the date upon which City issues a final certificate of occupancy for the Project (“Maturity Date”).

1.2 DUE ON SALE. The entire unpaid principal balance and all interest and other sums accrued hereunder shall be due and payable upon the Transfer (as defined in Section 7.2 of the Loan Agreement) absent City consent, of all or any part of the Project or the Property or any interest therein other than a Transfer permitted without City consent pursuant to the Loan Agreement. Without limiting the generality of the foregoing, this Note shall not be assumable without City’s prior written consent, which consent may be granted or denied in City’s sole 343
2 60064185.1
discretion; provided however, this Note may be assumed in connection with a permitted transfer as described in Section 7.3 of the Loan Agreement.

1.3 PREPAYMENT. Borrower may, without premium or penalty, at any time and from time to time, prepay all or any portion of the outstanding principal balance due under this Note, provided that each such prepayment is accompanied by accrued interest on the amount of principal prepaid calculated to the date of such prepayment. Prepayments shall be applied first to any unpaid late charges and other costs and fees then due, then to accrued but unpaid interest, and then to principal.

1.4 MANNER OF PAYMENT. All payments of principal and interest on this Note shall be made to City at 1901 Lisa Maloff Way, South Lake Tahoe, CA 96150 or such other place as City shall designate to Borrower in writing, or by wire transfer of immediately available funds to an account designated by City in writing.

2. DEFAULTS AND REMEDIES.

2.1 EVENTS OF DEFAULT. The occurrence of any one or more of the following events shall constitute an event of default hereunder ("Event of Default"):
(a) Borrower fails to pay when due the principal and interest payable hereunder and such failure continues for thirty (30) days after City notifies Borrower thereof in writing, provided no notice shall be required for any payment otherwise due on final maturity of this Note.
(b) Pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors ("Bankruptcy Law"), Borrower or any general partner thereof (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Borrower or any general partner thereof in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Borrower or any general partner thereof; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due. (c) A court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against Borrower or any general partner thereof in an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for Borrower or any general partner thereof or substantially all of such entity’s assets, (iii) orders the liquidation of Borrower or any general partner thereof, or (iv) issues or levies a judgment, writ, warrant of attachment or similar process against the Property or the Project, and in each case the order or decree is not released, vacated, dismissed or fully bonded within 90 days after its issuance. (d) The occurrence of a Transfer in violation of Article VII of the Loan Agreement. (e) A default is declared under any debt instrument secured by a mortgage or deed of trust on the Project or the Property and remains uncured beyond any applicable cure period such that the holder of such instrument has the right to accelerate payment thereunder. 344
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(f) Borrower fails to maintain insurance on the Property and the Project as required pursuant to the City Documents and Borrower fails to cure such default within 20 days. (g) Subject to Borrower’s right to contest the following charges pursuant to the City Documents, if Borrower fails to pay taxes or assessments due on the Property or the Project or fails to pay any other charge that may result in a lien on the Property or the Project, and Borrower fails to cure such default within 10 days.
(h) If any representation or warranty contained in any City Document, or any certificate furnished in connection therewith, or in connection with any request for disbursement of the proceeds of the Loan (the “Loan Proceeds”) proves to have been false or misleading in any material adverse respect when made and continues to be materially adverse to the City. (i) An Event of Default shall have been declared under the Regulatory Agreement or any City Document, and remains uncured beyond the expiration of any applicable cure period.

2.2 REMEDIES. Upon the occurrence of an Event of Default hereunder, City may, at its option (i) by written notice to Borrower, declare the entire unpaid principal balance of this Note, together with all accrued interest thereon and all sums due hereunder, immediately due and payable regardless of any prior forbearance, (ii) exercise any and all rights and remedies available to it under applicable law, and (iii) exercise any and all rights and remedies available to City under this Note and the other City Documents, including without limitation the right to pursue foreclosure under the Deed of Trust. Borrower shall pay all reasonable costs and expenses incurred by or on behalf of City including, without limitation, reasonable attorneys' fees, incurred in connection with City's enforcement of this Note and the exercise of any or all of its rights and remedies hereunder and all such sums shall be a part of the indebtedness secured by the Deed of Trust. The rights and remedies of City under this Note shall be cumulative and not alternative.

2.3 DEFAULT RATE. Upon the occurrence of an Event of Default, interest shall automatically be increased without notice to the rate of ten percent (10%) per annum (the “Default Rate"); provided however, if any payment due hereunder is not paid when due, the Default Rate shall apply commencing upon the due date for such payment. When Borrower is no longer in default, the Default Rate shall no longer apply, and the interest rate shall once again be the rate specified in the first paragraph of this Note. Notwithstanding the foregoing provisions, if the interest rate charged exceeds the maximum legal rate of interest, the rate shall be the maximum rate permitted by law. The imposition or acceptance of the Default Rate shall in no event constitute a waiver of a default under this Note or prevent City from exercising any of its other rights or remedies.

3. MISCELLANEOUS

3.1 WAIVERS; BORROWER’S WAIVERS. No waiver by City of any right or remedy under this Note shall be effective unless in a writing signed by City. Neither the failure nor any delay in exercising any right, power or privilege under this Note will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege by City will preclude any other or further exercise of such right, power or privilege or 345
4 60064185.1
the exercise of any other right, power or privilege. No waiver that may be given by City will be applicable except in the specific instance for which it is given. No notice to or demand on Borrower will be deemed to be a waiver of any obligation of Borrower or of the right of City to take further action without notice or demand as provided in this Note.

To the maximum extent permitted by applicable law Borrower hereby waives presentment, demand, protest, notices of dishonor and of protest and all defenses and pleas on the grounds of any extension or extensions of the time of payment or of any due date under this Note, in whole or in part, whether before or after maturity and with or without notice.

3.2 NOTICES. Any notice required or permitted to be given hereunder shall be given in accordance with Section 12.3 of the Loan Agreement.

3.3 SEVERABILITY. If any provision in this Note is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Note will remain in full force and effect. Any provision of this Note held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

3.4 GOVERNING LAW; VENUE. This Note shall be governed by the laws of the State of California without regard to principles of conflicts of laws. Any legal action filed in connection with this Note shall be filed in the Superior Court of El Dorado County, California, or in the Federal District Court for the Northern District of California.

3.5 PARTIES IN INTEREST. This Note shall bind Borrower and its successors and assigns and shall accrue to the benefit of City and its successors and assigns.

3.6 SECTION HEADINGS, CONSTRUCTION. The headings of Sections in this Note are provided for convenience only and will not affect its construction or interpretation.

3.7 RELATIONSHIP OF THE PARTIES. The relationship of Borrower and City under this Note is solely that of borrower and lender, and the loan evidenced by this Note and secured by the Deed of Trust will in no manner make City the partner or joint venturer of Borrower.

3.8 TIME IS OF THE ESSENCE. Time is of the essence with respect to every provision of this Note.

3.9 NONRECOURSE. Except as expressly provided in this Section 3.9, neither Borrower nor its partners shall have personal liability for payment of the principal of, or interest on, this Note, and the sole recourse of City with respect to the payment of the principal of, and interest on, this Note shall be to the Project, the Property and any other collateral held by City as security for this Note; provided however, nothing contained in the foregoing limitation of liability shall: (i) limit or impair the enforcement against all such security for the Note of all the rights and remedies of the City thereunder; (ii) be deemed in any way to impair the right of the City to assert the unpaid principal amount of the Note as demand for money within the meaning and intendment of Section 431.70 of the California Code of Civil Procedure or any successor provision thereto; or (iii) be deemed in any way to limit the rights of the City to obtain specific 346
5 60064185.1
performance by the Borrower of its covenants under the City Documents, other than the covenants to pay the City principal and interest due under the Note.

The foregoing limitation of liability is intended to apply only to the obligation for the repayment of the principal of, and payment of interest on the Note; nothing contained herein is intended to relieve the Borrower of its obligation to indemnify the City under this Agreement, or liability for: (i) fraud or willful misrepresentation by the Borrower; (ii) the failure to pay taxes, assessments or other charges which may create liens on the Property that are payable or applicable prior to any foreclosure under the Deed of Trust (to the full extent of such taxes, assessments or other charges); (iii) the fair market value of any personal property or fixtures removed or disposed of by the Borrower other than in accordance with the Deed of Trust; and/or (iv) the misappropriation of any proceeds by the Borrower under any insurance policies or awards resulting from condemnation or the exercise of the power of eminent domain or by reason of damage, loss or destruction to any portion of the Development IN WITNESS WHEREOF, Borrower has executed and delivered this Note as of the date first written above.

BORROWER:

SUGAR PINE PHASE 3 HOUSING PARTNERS, L.P., a
California limited partnership
By: St. Joseph Sugar Pine Village, LLC, a
California limited liability company, its
managing general partner
By: St. Joseph Community Land Trust, a
California nonprofit public benefit
corporation, its sole member
By:

Jean Diaz, Executive Director
By: Sugar Pine Phase 3 Housing Development
Co., LLC, a California limited liability
company, its administrative general partner
By:

Ann Silverberg, President
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60064185.1

EXHIBIT E

FORM DEED OF TRUST
348
1 60064185.1
Recording requested by and when recorded mail
to:

City of South Lake Tahoe
1901 Lisa Maloff Way
South Lake Tahoe, CA 96150

EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383
Space above this line for Recorder’s use.

LEASEHOLD DEED OF TRUST, ASSIGNMENT OF RENTS,

SECURITY AGREEMENT AND FIXTURE FILING
(PLHA Loan)

THIS LEASEHOLD DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this “Deed of Trust”) is made as of _________ 1, 2023, by SUGAR PINE PHASE 3 HOUSING PARTNERS, L.P., a California limited partnership (“Trustor”) to OLD REPUBLIC TITLE COMPANY (“Trustee”), for the benefit of the City of South Lake Tahoe, a municipal corporation (“Beneficiary”).

RECITALS
A. Trustor owns a leasehold interest in the land described in Exhibit A attached hereto and incorporated herein by this reference (the “Land”). Trustor intends to construct a 60- unit multifamily residential development on the Land and related improvements (the “Project”).

B. Beneficiary and Trustor have entered into a Loan Agreement dated as of August 1, 2022 (the “Loan Agreement”) pursuant to which Beneficiary will provide a loan to Trustor in the amount of up to Four Million Seven Hundred Fifty Thousand Dollars ($4,750,000) (“Loan”) for the purpose of partially financing the Project. Trustor has issued to Beneficiary a secured promissory note dated as of the date hereof (the “Note”) to evidence Trustor’s obligation to repay the Loan. This Deed of Trust, the Loan Agreement, the Note and the Regulatory Agreement (defined below) are collectively referred to herein as the “City Documents.” C. As a condition precedent to the making of the Loan, Beneficiary has required that Trustor enter into this Deed of Trust and grant to Trustee for the benefit of Beneficiary, a lien and security interest in the Project and in Trustor’s leasehold interest in the Land to secure repayment of the Note and performance of Trustor’s obligations under the Loan Agreement and the other City Documents.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed as follows.

1. Grant in Trust. In consideration of the foregoing and for the purpose of securing payment and performance of the Secured Obligations defined and described in Section 2, Trustor hereby irrevocably and unconditionally grants, conveys, transfers and assigns to Trustee, in trust for the 349
2 60064185.1
benefit of Beneficiary, with power of sale and right of entry and possession, all estate, right, title and interest which Trustor now has or may later acquire in and to the Land, and all of the following, whether presently owned or hereafter acquired:
a. The leasehold estate (“Leasehold Estate”) in the land created by that certain Development Ground Lease between Trustor, as Lessee, and the State of California (“State”), dated as of _________ 1, 2023, recorded substantially concurrently herewith in the Official Records of El Dorado County, California (“Ground Lease”); b. All buildings, structures, and improvements, now or hereafter located or constructed on the Land (“Improvements”);
c. All appurtenances, easements, rights of way, pipes, transmission lines or wires and other rights used in connection with the Land or the Improvements or as a means of access thereto, whether now or hereafter owned or constructed or placed upon or in the Land or Improvements and all existing and future privileges, rights, franchises and tenements of the Land, including all minerals, oils, gas and other commercially valuable substances which may be in, under or produced from any part of the Land, and all water rights, rights of way, gores or strips of land, and any land lying in the streets, ways, and alleys, open or proposed, in front of or adjoining the Land and Improvements (collectively, “Appurtenances”); d. All machinery, equipment, fixtures, goods and other personal property of the Trustor, whether moveable or not, now owned or hereafter acquired by the Trustor and now or hereafter located at or used in connection with the Land, the Improvements or Appurtenances, and all improvements, restorations, replacements, repairs, additions or substitutions thereto (collectively, “Equipment”);
e. All existing and future leases, subleases, licenses, and other agreements relating to the use or occupancy of all or any portion of the Leasehold Estate, Land or Improvements (collectively, “Leases”), all amendments, extensions, renewals or modifications thereof, and all rent, royalties, or other payments which may now or hereafter accrue or otherwise become payable thereunder to or for the benefit of Trustor, including but not limited to security deposits (collectively, “Rents”);
f. All insurance proceeds and any other proceeds from the Leasehold Estate, Land, Improvements, Appurtenances, Equipment, Leases, and Rents, including without limitation, all deposits made with or other security deposits given to utility companies, all claims or demands relating to insurance awards which the Trustor now has or may hereafter acquire, including all advance payments of insurance premiums made by Trustor, and all condemnation awards or payments now or later made in connection with any condemnation or eminent domain proceeding (“Proceeds”);
g. All revenues, income, rents, royalties, payments and profits produced by the Leasehold Estate, Land, Improvements, Appurtenances and Equipment, whether now owned or hereafter acquired by Trustor (“Gross Revenues”);
h. All architectural, structural and mechanical plans, specifications, design documents and studies produced in connection with development of the Land and construction of 350
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the Improvements (collectively, “Plans”); and
i. All interests and rights in any private or governmental grants, subsidies, loans or other financing provided in connection with development of the Leasehold Estate, Land and construction of the Improvements (collectively, “Financing”).

All of the above-referenced interests of Trustor in the Leasehold Estate, Land, Improvements, Appurtenances, Equipment, Leases, Rents, Proceeds, Gross Revenues, Plans and Financing as hereby conveyed to Trustee or made subject to the security interest herein described are collectively referred to herein as the “Property.”

2. Obligations Secured. This Deed of Trust is given for the purpose of securing payment and performance of the following (collectively, the “Secured Obligations”): (i) all present and future indebtedness evidenced by the Note and any amendment thereof, including principal, interest and all other amounts payable under the terms of the Note; (ii) all present and future obligations of Trustor to Beneficiary under the Loan Agreement, the Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants dated as of the date hereof, executed by and between City and Trustor and recorded substantially concurrently herewith (the “Regulatory Agreement”) or the other City Documents; (iii) all additional present and future obligations of Trustor to Beneficiary under any other agreement or instrument acknowledged by Trustor (whether existing now or in the future) which states that it is or such obligations are, secured by this Deed of Trust; (iv) all obligations of Trustor to Beneficiary under all modifications, supplements, amendments, renewals, or extensions of any of the foregoing, whether evidenced by new or additional documents; and (v) reimbursement of all amounts advanced by or on behalf of Beneficiary to protect Beneficiary’s interests under this Deed of Trust or any other City Document as such may be modified, supplemented, amended, renewed or extended.

3. Assignment of Rents, Issues, and Profits. Trustor hereby irrevocably, absolutely, presently and unconditionally assigns to Beneficiary the Rents, royalties, issues, profits, revenue, income and proceeds of the Property. This is an absolute assignment and not an assignment for security only. Beneficiary hereby confers upon Trustor a license to collect and retain such Rents, royalties, issues, profits, revenue, income and proceeds as they become due and payable prior to any Event of Default hereunder. Upon the occurrence of any such Event of Default, Beneficiary may terminate such license without notice to or demand upon Trustor and without regard to the adequacy of any security for the indebtedness hereby secured, and may either in person, by agent, or by a receiver to be appointed by a court, enter upon and take possession of the Property or any part thereof, and sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorneys’ fees, to any indebtedness secured hereby, and in such order as Beneficiary may determine. Beneficiary’s right to the rents, royalties, issues, profits, revenue, income and proceeds of the Property does not depend upon whether or not Beneficiary takes possession of the Property. The entering upon and taking possession of the Property, the collection of such rents, issues, and profits, and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. If an Event of Default occurs while Beneficiary is in possession of all or part of the Property and/or is collecting and applying Rents as permitted under this Deed of Trust, 351
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Beneficiary, Trustee and any receiver shall nevertheless be entitled to exercise and invoke every right and remedy afforded any of them under this Deed of Trust and at law or in equity, including the right to exercise the power of sale granted hereunder. Regardless of whether or not Beneficiary, in person or by agent, takes actual possession of the Land or the Improvements, Beneficiary shall not be deemed to be a “mortgagee in possession,” shall not be responsible for performing any obligation of Trustor under any Lease, shall not be liable in any manner for the Property, or the use, occupancy, enjoyment or operation of any part of it, and shall not be responsible for any waste committed by Trustor, lessees or any third parties, or for dangerous or defective condition of the Property or any negligence in the management, repair or control of the Property. Absent Beneficiary’s written consent, Trustor shall not accept prepayment of Rents for any rental period exceeding one month.

4. Security Agreement. The parties intend for this Deed of Trust to create a lien on the Property, and an absolute assignment of the Rents and Leases, all in favor of Beneficiary, subject to the rights of any beneficiaries under deeds of trust senior in priority to this Deed of Trust permitted under the Loan Agreement and Ground Lease (“Senior Deeds of Trust”). The parties acknowledge that some of the Property may be determined under applicable law to be personal property or fixtures. To the extent that any Property may be or be determined to be personal property, Trustor as debtor hereby grants to Beneficiary as secured party a security interest in all such Property to secure payment and performance of the Secured Obligations. This Deed of Trust constitutes a security agreement under the California Uniform Commercial Code, as amended or recodified from time to time (the “UCC”), covering all such Property. To the extent such Property is not real property encumbered by the lien granted above, and is not absolutely assigned by the assignment set forth above, it is the intention of the parties that such Property shall constitute "proceeds, products, offspring, rents, or profits" (as defined in and for the purposes of Section 552(b) of the United States Bankruptcy Code, as such section may be modified or supplemented) of the Land and Improvements.

5. Financing Statements. Pursuant to the UCC, Trustor, as debtor, hereby authorizes Beneficiary, as secured party, to file such financing statements and amendments thereof and such continuation statements with respect thereto as Beneficiary may deem appropriate to perfect and preserve Beneficiary's security interest in the Property and Rents, without requiring any signature or further authorization by Trustor. If requested by Beneficiary, Trustor shall pay all fees and costs that Beneficiary may incur in filing such documents in public offices and in obtaining such record searches as Beneficiary may reasonably require. If any financing statement or other document is filed in the records normally pertaining to personal property, that filing shall not be construed as in any way derogating from or impairing this Deed of Trust or the rights or obligations of the parties under it.

Everything used in connection with the Property and/or adapted for use therein and/or which is described or reflected in this Deed of Trust is, and at all times and for all purposes and in all proceedings both legal or equitable shall be regarded as part of the estate encumbered by this Deed of Trust irrespective of whether (i) any such item is physically attached to the Improvements, (ii) serial numbers are used for the better identification of certain equipment items capable of being thus identified in a recital contained herein or in any list filed with Beneficiary, or (iii) any such item is referred to or reflected in any such financing statement so filed at any time. Similarly, the mention in any such financing statement of (1) rights in or to the 352
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proceeds of any fire and/or hazard insurance policy, or (2) any award in eminent domain proceedings for a taking or for lessening of value, or (3) Trustor's interest as lessor in any present or future lease or rights to income growing out of the use and/or occupancy of the property conveyed hereby, whether pursuant to lease or otherwise, shall not be construed as in any way altering any of the rights of Beneficiary as determined by this instrument or impugning the priority of Beneficiary’s lien granted hereby or by any other recorded document. Such mention in any financing statement is declared to be solely for the protection of Beneficiary in the event any court or judge shall at any time hold, with respect to the matters set forth in the foregoing clauses (1), (2), and (3), that notice of Beneficiary's priority of interest is required in order to be effective against a particular class of persons, including but not limited to the federal government and any subdivisions or entity of the federal government.

6. Fixture Filing. Subject to the rights of beneficiaries under Senior Deeds of Trust, this Deed of Trust is intended to be and constitutes a fixture filing pursuant to the provisions of the UCC with respect to all of the Property constituting fixtures, is being recorded as a fixture financing statement and filing under the UCC, and covers property, goods and equipment which are or are to become fixtures related to the Land and the Improvements. Trustor covenants and agrees that this Deed of Trust is to be filed in the real estate records of El Dorado County and shall also operate from the date of such filing as a fixture filing in accordance with Section 9502 and other applicable provisions of the UCC. This Deed of Trust shall also be effective as a financing statement covering minerals or the like (including oil and gas) and accounts subject to the UCC, as amended. Trustor shall be deemed to be the "debtor" and Beneficiary shall be deemed to be the "secured party" for all purposes under the UCC.

7. Trustor’s Representations, Warranties and Covenants; Rights and Duties of the Parties.

7.1 Representations and Warranties. Trustor represents and warrants that: (i) Trustor lawfully possesses and holds the Leasehold Estate in the Land and title to the Improvements, (ii) Trustor has good and marketable title to all of the Property; (iii) Trustor has the full and unlimited power, right and authority to encumber the Property and assign the Rents; (iv) subject only to encumbrances of record and senior liens permitted pursuant to the City Documents or otherwise approved in writing by Beneficiary (“Permitted Encumbrances”), this Deed of Trust creates a valid first lien on Trustor’s entire interest in the Property; (v) except with respect to Permitted Encumbrances, Trustor owns the Property free and clear of any deeds of trust, mortgages, security agreements, reservations of title or conditional sales contracts, (vi) there is no financing statement affecting the Property on file in any public office other than as disclosed in writing to Beneficiary; and (vii) the correct address of Trustor’s chief executive office is specified in Section 10.2.

Trustor further represents and warrants that this Deed of Trust and all other documents delivered or to be delivered by Trustor in connection herewith: (a) have been duly authorized, executed, and delivered by Trustor; (b) are binding obligations of Trustor; and (c) do not violate the provisions of any agreement to which Trustor is a party or which affects the Property.

Trustor further represents and warrants that there are no pending, or to Trustor’s knowledge, threatened actions or proceedings before any court or administrative agency which may adversely affect Trustor’s ownership of the Property.
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7.2 Payment and Performance of Secured Obligations. Trustor shall promptly pay when due the principal and any interest due on the indebtedness evidenced by the Note, and shall promptly pay and perform all other obligations of Trustor arising in connection with the Secured Obligations or the City Documents in accordance with the respective terms thereof.

7.3 Use of Loan Proceeds; Preservation and Maintenance of Property; Compliance with Laws. Trustor covenants that it shall use the proceeds of the Loan (the “Loan Proceeds”) solely for purposes authorized by the City Documents. Trustor shall keep the Land and Improvements in good repair and condition, and from time to time shall make necessary repairs, renewals and replacements thereto so that the Property shall be preserved and maintained.

Trustor covenants to comply with all federal, state and local laws, regulations, ordinances and rules applicable to the Property and the Project, including without limitation all applicable requirements of state and local building codes and regulations, and all applicable statutes and regulations relating to accessibility for the disabled. Trustor shall not remove, demolish or materially alter any Improvement without Beneficiary’s consent, shall complete or restore promptly and in good and workmanlike manner any building, fixture or other improvement which may be constructed, damaged, or destroyed thereon, and shall pay when due all claims for labor performed and materials furnished therefor. Trustor shall use the Land and Improvements solely for purposes authorized by the City Documents, shall not commit or allow waste of the Property, and shall not commit or allow any act upon or use of the Property which would violate any applicable law or order of any governmental authority, nor shall Trustor bring on or keep any article on the Property or cause or allow any condition to exist thereon which could invalidate or which would be prohibited by any insurance coverage required to be maintained on the Property pursuant to the City Documents.

7.4 Restrictions on Conveyance and Encumbrance; Acceleration. It shall be an Event of Default hereunder if any Transfer (as defined in the Loan Agreement) of the Property, any part thereof or any interest therein occurs in violation of the requirements of the City Documents.

If any such Transfer occurs in violation of such requirements, without limiting the provisions of Section 8 hereof, all obligations secured by this Deed of Trust, irrespective of the maturity dates of such obligations, shall at the option of Beneficiary, and without demand, immediately become due and payable, subject to any applicable cure period.

7.5 Inspections; Books and Records. Beneficiary and its agents and representatives shall have the right at any reasonable time upon reasonable notice to enter upon the Land and inspect the Property to ensure compliance with the City Documents. Trustor shall maintain complete and accurate books of account and other records (including copies of supporting bills and invoices) adequate to document the use of the Loan Proceeds and the operation of the Property, together with copies of all written contracts, Leases and other instruments which affect the Property. The books, records, contracts, Leases and other instruments shall be subject to examination and inspection at any reasonable time by Beneficiary following two business days prior notice.

7.6 Charges, Liens, Taxes and Assessments. Trustor shall pay before delinquency all taxes, levies, assessments and other charges affecting the Property that are (or if not paid may become) a lien on all or part of the Property. Trustor may, at Trustor’s expense, contest the 354
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validity or application of any tax, levy, assessment or charge affecting the Property by appropriate legal proceedings promptly initiated and conducted in good faith and with due diligence, provided that (i) Beneficiary is reasonably satisfied that neither the Property nor any part thereof or interest therein will be in danger of being sold, forfeited, or lost as a result of such contest, and (ii) Trustor shall have posted a bond or furnished other security as may reasonably be required from time to time by Beneficiary; and provided further that Trustor shall timely make any payment necessary to prevent a lien foreclosure, sale, forfeiture or loss of the Property.

7.7 Subrogation. Beneficiary shall be subrogated to the liens of all encumbrances, whether released of record or not, which are discharged in whole or in part by Beneficiary in accordance with this Deed of Trust.

7.8 Hazard, Liability and Workers’ Compensation Insurance. At all times during the term hereof, Trustor shall at Trustor’s expense, maintain insurance policies in accordance with the requirements set forth in the City Documents. Trustor shall file with Beneficiary prior to the commencement of the term hereof, certificates (or such other proof as Beneficiary may reasonably require, including without limitation copies of the required insurance policies) evidencing each of the insurance policies and endorsements thereto as required pursuant to the City Documents, and such certificates (or policies) shall provide that at least thirty (30) days’ prior written notice shall be provided to Beneficiary prior to the expiration, cancellation or change in coverage under each such policy. If any insurance policy required pursuant to the City Documents is canceled or the coverage provided thereunder is reduced, Trustor shall, within ten (10) days after receipt of written notice of such cancellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with Beneficiary a certificate showing that the required insurance has been reinstated or provided through another insurance company or companies. Upon failure to so file such certificate, Beneficiary may, without further notice and at its option (and without any obligation to do so), procure such insurance coverage at Trustor’s expense, and Trustor shall promptly reimburse Beneficiary for such expense upon receipt of billing from Beneficiary.

7.9 Condition of Property. Trustor represents and warrants that except as disclosed to Beneficiary in writing, as of the date hereof: (i) Trustor has not received any notice from any governmental authority of any threatened or pending zoning, building, fire, or health code violation or violation of other governmental regulations concerning the Land that has not previously been corrected, and no condition on the Land violates any health, safety, fire, environmental, sewage, building, or other federal, state or local law, ordinance or regulation; (ii) no contracts, licenses, leases or commitments regarding the maintenance or use of the Property or allowing any third party rights to use the Property are in force; (iii) there are no threatened or pending actions, suits, or administrative proceedings against or affecting the Property or any portion thereof or the interest of Trustor in the Property; (iv) there are no threatened or pending condemnation, eminent domain, or similar proceedings affecting the Land or any portion thereof; (v) Trustor has not received any notice from any insurer of defects of the Property which have not been corrected; (vi) there are no natural or artificial conditions upon the Land or any part thereof that could result in a material and adverse change in the condition of the Land; (vii) all information that Trustor has delivered to Beneficiary, either directly or through Trustor's agents, is accurate and complete; and (viii) Trustor or Trustor’s agents have disclosed to Beneficiary all material facts concerning the Property.
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7.10 Hazardous Materials. Trustor represents and warrants that except as disclosed to Beneficiary in writing, as of the date hereof to the best knowledge of Trustor: (i) the Land is free and has always been free of Hazardous Materials (as defined below) and is not and has never been in violation of any Environmental Law (as defined below); (ii) there are no buried or partially buried storage tanks located on the Land; (iii) Trustor has received no notice, warning, notice of violation, administrative complaint, judicial complaint, or other formal or informal notice alleging that conditions on the Land are or have ever been in violation of any Environmental Law or informing Trustor that the Land is subject to investigation or inquiry regarding Hazardous Materials on the Land or the potential violation of any Environmental Law; (iv) there is no monitoring program required by the Environmental Protection Agency or any other governmental agency concerning the Land; (v) no toxic or hazardous chemicals, waste, or substances of any kind have ever been spilled, disposed of, or stored on, under or at the Land, whether by accident, burying, drainage, or storage in containers, tanks, holding areas, or any other means; (vi) the Land has never been used as a dump or landfill; and (vii) Trustor has disclosed to Beneficiary all information, records, and studies in Trustor’s possession or reasonably available to Trustor relating to the Land concerning Hazardous Materials.

Trustor shall not cause or permit any Hazardous Material (as defined in Section 9.3 of the Loan Agreement) to be brought upon, kept, stored or used in, on, under, or about the Land by Trustor, its agents, employees, contractors or invitees except for incidental supplies ordinarily used in the construction and operation of residential developments in compliance with all applicable laws, and shall not cause any release of Hazardous Materials into, onto, under or through the Land. If any Hazardous Material is discharged, released, dumped, or spilled in, on, under, or about the Land and results in any contamination of the Land or adjacent property, or otherwise results in the release or discharge of Hazardous Materials in, on, under or from the Land, Trustor shall promptly take all actions at its sole expense as are necessary to comply with all Environmental Laws (as defined below).

Trustor shall indemnify, defend (with counsel reasonably acceptable to Beneficiary), and hold Beneficiary and its elected and appointed officials, officers, agents and employees (collectively, “Indemnitees”) harmless from and against any and all loss, claim, liability, damage, demand, judgment, order, penalty, fine, injunctive or other relief, cost, expense (including reasonable fees and expenses of attorneys, expert witnesses, and other professionals advising or assisting Beneficiary), action, or cause of action (all of the foregoing, hereafter individually “Claim” and collectively “Claims”) arising in connection with the breach of Trustor’s covenants and obligations set forth in this Section 7.10 or otherwise arising in connection with the presence or release of Hazardous Materials in, on, under, or from the Property; provided that no Indemnitee shall be entitled to indemnification under this Section for matters caused by such Indemnitee's gross negligence or willful misconduct. The foregoing indemnity includes, without limitation, all costs of investigation, assessment, containment, removal, remediation of any kind, and disposal of Hazardous Materials, all costs of determining whether the Land is in compliance with Environmental Laws, all costs associated with bringing the Land into compliance with all applicable Environmental Laws, and all costs associated with claims for damages or injury to persons, property, or natural resources.

Without limiting the generality of the foregoing, Trustor shall, at Trustor’s own cost and 356
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expense, do all of the following:
a. pay or satisfy any judgment or decree that may be entered against any Indemnitee or Indemnitees in any legal or administrative proceeding incident to any matters against which Indemnitees are entitled to be indemnified under this Deed of Trust; b. reimburse Indemnitees for any expenses paid or incurred in connection with any matters against which Indemnitees are entitled to be indemnified under this Deed of Trust; and c. reimburse Indemnitees for any and all expenses, including without limitation outof-pocket expenses and fees of attorneys and expert witnesses, paid or incurred in connection with the enforcement by Indemnitees of their rights under this Deed of Trust, or in monitoring and participating in any legal or administrative proceeding.

Trustor’s obligation to indemnify the Indemnitees shall not be limited or impaired by any of the following, or by any failure of Trustor to receive notice of or consideration for any of the following: (i) any amendment or modification of any City Document; (ii) any extensions of time for performance required by any City Document; (iii) any provision in any of the City Documents limiting Beneficiary's recourse to property securing the Secured Obligations, or limiting the personal liability of Trustor, or any other party for payment of all or any part of the Secured Obligations; (iv) the accuracy or inaccuracy of any representation and warranty made by Trustor under this Deed of Trust or by Trustor or any other party under any City Document, (v) the release of Trustor or any other person, by Beneficiary or by operation of law, from performance of any obligation under any City Document; (vi) the release or substitution in whole or in part of any security for the Secured Obligations; and (vii) Beneficiary’s failure to properly perfect any lien or security interest given as security for the Secured Obligations.

The provisions of this Section 7.10 shall be in addition to any and all other obligations and liabilities that Trustor may have under applicable law, and each Indemnitee shall be entitled to indemnification under this Section without regard to whether Beneficiary or that Indemnitee has exercised any rights against the Property or any other security, pursued any rights against any guarantor or other party, or pursued any other rights available under the City Documents or applicable law. The obligations of Trustor to indemnify the Indemnitees under this Section shall survive any repayment or discharge of the Secured Obligations, any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, and any release of record of the lien of this Deed of Trust.

Without limiting any of the remedies provided in this Deed of Trust, Trustor acknowledges and agrees that each of the provisions in this Section 7.10 is an environmental provision (as defined in Section 736(f)(2) of the California Code of Civil Procedure) made by Trustor relating to real property security (the “Environmental Provisions”), and that Trustor's failure to comply with any of the Environmental Provisions will be a breach of contract that will entitle Beneficiary to pursue the remedies provided by Section 736 of the California Code of Civil Procedure (“Section 736”) for the recovery of damages and for the enforcement of the Environmental Provisions. Pursuant to Section 736, Beneficiary's action for recovery of damages or enforcement of the Environmental Provisions shall not constitute an action within the meaning of Section 726(a) of the California Code of Civil Procedure or constitute a money 357
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judgment for a deficiency or a deficiency judgment within the meaning of Sections 580a, 580b, 580d, or 726(b) of the California Code of Civil Procedure. “Environmental Law” means all federal, state or local statutes, ordinances, rules, regulations, orders, decrees, judgments or common law doctrines, and provisions and conditions of permits, licenses and other operating authorizations regulating, or relating to, or imposing liability or standards of conduct concerning (i) pollution or protection of the environment, including natural resources; (ii) exposure of persons, including employees and agents, to any Hazardous Material (as defined above) or other products, raw materials, chemicals or other substances; (iii) protection of the public health or welfare from the effects of by-products, wastes, emissions, discharges or releases of chemical substances from industrial or commercial activities; (iv) the manufacture, use or introduction into commerce of chemical substances, including without limitation, their manufacture, formulation, labeling, distribution, transportation, handling, storage and disposal; or (iv) the use, release or disposal of toxic or hazardous substances or Hazardous Materials or the remediation of air, surface waters, groundwaters or soil, as now or may at any later time be in effect, including but not limited to the Toxic Substances Control Act [15 U.S.C. 2601, et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, et seq.], the Hazardous Materials Transportation Authorization Act [49 U.S.C. Section 5101, et seq.], the Resource Conservation and Recovery Act [42 U.S.C. 6901, et seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251], the Clean Air Act [42 U.S.C. Section 7401, et seq.], the California Underground Storage of Hazardous Substances Act [California Health and Safety Code Section 25280, et seq.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300, et seq.], the California Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enforcement Act [California Health and Safety Code Section 25249.5, et seq.], and the Porter-Cologne Water Quality Control Act [California Water Code Section 13000, et seq.], as they now exist or are hereafter amended, together with any regulations promulgated thereunder.

7.11 Notice of Claims; Defense of Security; Reimbursement of Costs. a. Notice of Claims. Promptly upon obtaining knowledge of the institution of any proceedings for the condemnation or other taking of all or any portion of the Property, or knowledge of any casualty damage to the Property, or damage in any other manner, Trustor shall immediately notify Beneficiary thereof. Trustor hereby authorizes and empowers Beneficiary as attorney in fact for Trustor to make proof of loss, to adjust and compromise any claim under the insurance policies covering the Property, to appear in and prosecute any action arising from such insurance policies, to collect and receive insurance proceeds, and to deduct therefrom Beneficiary’s expenses incurred in the collection of such proceeds; provided, however, that nothing contained in this Section shall require Beneficiary to incur any expense or take any action hereunder. Trustor hereby authorizes and empowers Beneficiary, at Beneficiary’s option, as attorney in fact for Trustor, to commence, appear in and prosecute, in Beneficiary’s or Trustor’s name, any action or proceeding relating to any condemnation or other taking of all or any part of the Property, whether direct or indirect, and to settle or compromise any claim in connection with such condemnation or other taking. The proceeds of any award payment or claim for damages, direct or consequential, in connection with any condemnation or other taking, whether direct or indirect, of the Property, or any part thereof, or for conveyances in lieu of the 358
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Property, or any part thereof, shall be paid to Beneficiary. The foregoing powers of attorney are coupled with an interest and are irrevocable. Trustor hereby authorizes Beneficiary to apply such awards, payments, proceeds or damages relating to condemnation of the Property and insurance covering the Property, after the deduction of Beneficiary’s expenses incurred in the collection of such amounts, at Beneficiary’s option, subject to the requirements of applicable law and the provisions hereof, to restoration or repair of the Property or to payment of the sums secured by this Deed of Trust. Beneficiary shall be under no obligation to question the amount of any compensation, awards, proceeds, damages, claims, rights of action, and payments relating to condemnation or other taking of the Property or insured casualty affecting the Property, and may accept the same in the amount in which the same shall be paid. Trustor shall execute such further evidence of assignment of any awards, proceeds damages or claims arising in connection with such condemnation or taking or such insurance as Beneficiary may require. Trustor’s obligations and Beneficiary’s rights under this Section are subject to the requirements of the Senior Deeds of Trust (if any)..
b. Defense of Security. At Trustor's sole expense, Trustor shall protect, preserve and defend the Property and title to and right of possession of the Property, the security of this Deed of Trust and the rights and powers of Beneficiary and Trustee created under it, against all adverse claims.
c. Compensation; Reimbursement of Costs. Trustor agrees to pay all reasonable fees, costs and expenses charged by Beneficiary or Trustee for any service that Beneficiary or Trustee may render in connection with this Deed of Trust, including without limitation, fees and expenses related to provision of a statement of obligations or related to a reconveyance. Trustor further agrees to pay or reimburse Beneficiary for all costs, expenses and other advances which may be incurred or made by Beneficiary or Trustee in any efforts to enforce any terms of this Deed of Trust, including without limitation any rights or remedies afforded to Beneficiary or Trustee or both of them under Sections 7.17 and 8.2, whether or not any lawsuit is filed, or in defending any action or proceeding arising under or relating to this Deed of Trust, including reasonable attorneys’ fees and other legal costs, costs of any disposition of the Property under the power of sale granted hereunder or any judicial foreclosure, and any cost of evidence of title. d. Notice of Changes. Trustor shall give Beneficiary prior written notice of any change in the address of Trustor and the location of any Property, including books and records pertaining to the Property.

7.12 Indemnification. Trustor shall indemnify, defend (with counsel reasonably acceptable to Beneficiary), and hold harmless the Indemnitees (as defined in Section 7.10) from and against all Claims arising directly or indirectly in any manner in connection with or as a result of (a) any breach of Trustor’s covenants under any City Document, (b) any representation by Trustor in any City Document which proves to be false or misleading in any material respect when made, (c) injury or death to persons or damage to property or other loss occurring on the Land or in any improvement located thereon, whether caused by the negligence or any other act or omission of Trustor or any other person or by negligent, faulty, inadequate or defective design, building, construction or maintenance or any other condition or otherwise, (d) any claim, demand or cause of action, or any action or other proceeding, whether meritorious or not, brought or asserted against any Indemnitee which relates to or arises out of the Property, or any 359
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City Document or any transaction contemplated thereby, or any failure of Trustor to comply with all applicable state, federal and local laws and regulations applicable to the Property, provided that no Indemnitee shall be entitled to indemnification under this Section for matters caused by such Indemnitee's gross negligence or willful misconduct. The obligations of Trustor under this Section shall survive the repayment of the Loan and shall be secured by this Deed of Trust.

Notwithstanding any contrary provision contained herein, the obligations of Trustor under this Section shall survive any foreclosure proceeding, any foreclosure sale, any delivery of a deed in lieu of foreclosure, and any release or reconveyance of this Deed of Trust.

7.13. Limitation of Liability. Beneficiary shall not be directly or indirectly liable to Trustor or any other person as a consequence of any of the following: (i) Beneficiary's exercise of or failure to exercise any rights, remedies or powers granted to Beneficiary in this Deed of Trust; (ii) Beneficiary's failure or refusal to perform or discharge any obligation or liability of Trustor under any agreement related to the Property or under this Deed of Trust; (iii) any waste committed by Trustor, the lessees of the Property or any third parties, or any dangerous or defective condition of the Property; or (iv) any loss sustained by Trustor or any third party resulting from any act or omission of Beneficiary in managing the Property after an Event of Default, unless the loss is caused by the willful misconduct, gross negligence, or bad faith of Beneficiary. Trustor hereby expressly waives and releases all liability of the types described in this Section 7.13, and agrees that Trustor shall assert no claim related to any of the foregoing against Beneficiary.

7.14 Insurance and Condemnation Proceeds. Subject to the rights of any senior lienholders, and notwithstanding anything contained in any of the City Documents, unless Beneficiary and Trustor otherwise agree in writing, any award of damages in connection with any condemnation for public use of, or injury to the Property or any part thereof shall be applied to restoration or repair of the Property, provided Trustor determines that such restoration or repair is economically feasible and there is no default under any City Document that is continuing beyond the expiration of all applicable cure periods. If Trustor determines that such restoration or repair is not economically feasible or if a default exists after expiration of all applicable cure periods, the insurance proceeds shall be applied to the sums secured by this Deed of Trust, with the excess, if any, paid to Trustor. In the event funds for such work are insufficient, Beneficiary may, in its sole discretion and subject to the approval of Beneficiary’s governing board, advance such additional funds as may be necessary to allow the Property to be repaired or restored, and may add the amount thereof to the principal balance of the Note. If the Property is abandoned by Trustor, or if Trustor fails to respond to Beneficiary within 30 days from the date notice is mailed by Beneficiary to Trustor that the insurance carrier offers to settle a claim for insurance benefits, Beneficiary is authorized to collect and apply the insurance proceeds at Beneficiary's option either to restoration or repair of the Property or to the sums secured by this Deed of Trust

7.15 Release, Extension, Modification. At any time and from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and the Note for endorsement, Trustee may release or reconvey all or any part of the Property, consent to the making of any map or plat of the Land or part thereof, join in granting any easement or creating any restriction affecting the Property, or join in any extension agreement or other agreement affecting the lien or charge hereof. At any time and from time to 360
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time, without liability therefor and without notice, Beneficiary may (i) release any person liable for payment of any Secured Obligation, (ii) extend the time for payment or otherwise alter the terms of payment of any Secured Obligation; (iii) accept additional real or personal property of any kind as security for any Secured Obligation, or (iv) substitute or release any property securing the Secured Obligations.

7.16 Reconveyance. Upon written request of Beneficiary stating that all of the Secured Obligations have been satisfied in full, and upon surrender of this Deed of Trust, and the Note, Trustee shall reconvey, without warranty, the Property or so much of it as is then held under this Deed of Trust. The recitals in any reconveyance executed under this Deed of Trust of any matters or facts shall be conclusive proof of the truthfulness thereof. Trustor shall pay all fees of Trustee and all recordation fees related to such reconveyance.

7.17 Cure; Protection of Security. Beneficiary may cure any breach or default of Trustor, and if it chooses to do so in connection with any such cure, Beneficiary may also enter the Property and/or do any and all other things which it may in its reasonable discretion consider necessary and appropriate to protect the security of this Deed of Trust. Such other things may include: appearing in and/or defending any action or proceeding which purports to affect the security of, or the rights or powers of Beneficiary or Trustee under, this Deed of Trust; paying, purchasing, contesting or compromising any encumbrance, charge, lien or claim of lien which in Beneficiary’s sole judgment is or may be senior in priority to this Deed of Trust, such judgment of Beneficiary to be conclusive as among Beneficiary, Trustee and Trustor; obtaining insurance and/or paying any premiums or charges for insurance required to be carried hereunder; otherwise caring for and protecting any and all of the Property; and/or employing counsel, accountants, contractors and other appropriate persons to assist Beneficiary. Beneficiary may take any of the actions permitted under this Section 7.17 either with or without giving notice, except for notices required under applicable law. Any amounts disbursed by Beneficiary pursuant to this paragraph shall become additional indebtedness secured by this Deed of Trust. Beneficiary shall have no obligation to take any action described in this Section.

7.18 Subordination. Beneficiary hereby acknowledges and agrees that this Deed of Trust and the promissory note and all rights of Beneficiary thereunder shall be subordinate to the following liens and encumbrances described on Exhibit C attached hereto.

8. Default and Remedies.

8.1 Events of Default. Trustor acknowledges and agrees that an Event of Default shall occur under this Deed of Trust upon the occurrence of any one or more of the following events:
a. Beneficiary’s declaration of an Event of Default under any City Document, subject to the expiration of any applicable cure period set forth in such document; b. Trustor fails to perform any monetary obligation which arises under this Deed of Trust, and does not cure that failure within ten (10) days following written notice from Beneficiary or Trustee;
c. If Trustor’s interest in the Property or any part thereof is voluntarily or 361
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involuntarily sold, transferred, leased, encumbered, or otherwise conveyed in violation of Section 7.4 hereof or if any other Transfer occurs in violation of the Loan Agreement; d. Trustor fails to maintain the insurance coverage required under the City Documents or otherwise fails to comply with the requirements of Section 7.8 hereof and Trustor fails to cure such default within the time specified in Section 7.8; e. Subject to Trustor’s right to contest such charges as provided herein, Trustor fails to pay taxes or assessments due on the Land or the Improvements or fails to pay any other charge that may result in a lien on the Land or the Improvements, and Trustor fails to cure such default within ten (10) days.
f. Any representation or warranty of Trustor contained in or made in connection with the execution and delivery of this Deed of Trust or in any certificate or statement furnished pursuant hereto or in any other City Document proves to have been false or misleading in any material adverse respect when made;
g. If, pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (“Bankruptcy Law”), Trustor or any general partner thereof (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Trustor or any general partner thereof in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Trustor or any general partner thereof; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due. h. If a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against Trustor or any general partner thereof in an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for Trustor or any general partner thereof or substantially all of such entity’s assets, (iii) orders the liquidation of Trustor or any general partner thereof, or (iv) issues or levies a judgment, writ, warrant of attachment or similar process against the Property or the Project, and in each case the order or decree is not released, vacated, dismissed or fully bonded within 60 days after its issuance.
i. The holder of any other debt instrument secured by a mortgage or deed of trust on the Property or part thereof declares an event of default thereunder and exercises a right to declare all amounts due under that debt instrument immediately due and payable, subject to the expiration of any applicable cure period set forth in such holder’s documents; or j. Trustor fails to perform any obligation arising under this Deed of Trust other than one enumerated in this Section 8.1, and does not cure that failure either within ten (10) days after written notice from Beneficiary or Trustee in the event of a monetary default, or within thirty (30) days after such written notice in the event of a nonmonetary default, provided that in the case of a nonmonetary default that in Beneficiary’s reasonable judgment cannot reasonably be cured within thirty (30) days, an Event of Default shall not arise hereunder if Trustor commences to cure such default within thirty (30) days and thereafter prosecutes such 362
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cure to completion with due diligence and in good faith and in no event later than ninety (90) days, or such longer period as the City may approve, following receipt of notice of default.

8.2 Remedies. Subject to the applicable notice and cure provisions set forth herein, at any time after an Event of Default, Beneficiary and Trustee shall be entitled to invoke any and all of the rights and remedies described below, and may exercise any one or more or all, of the remedies set forth in any City Document, and any other remedy existing at law or in equity or by statute, subject to the nonrecourse provisions set forth in the Note. All of Beneficiary’s rights and remedies shall be cumulative, and the exercise of any one or more of them shall not constitute an election of remedies. Beneficiary shall be entitled to collect all expenses incurred in pursuing the remedies provided hereunder, including without limitation reasonable attorneys’ fees and costs.
a. Acceleration. Beneficiary may declare any or all of the Secured Obligations, including without limitation all sums payable under the Note and this Deed of Trust, to be due and payable immediately.
b. Receiver. Beneficiary may apply to any court of competent jurisdiction for, and obtain appointment of, a receiver for the Property. c. Entry. Beneficiary, in person, by agent or by court-appointed receiver, may enter, take possession of, manage and operate all or any part of the Property, and may also do any and all other things in connection with those actions that Beneficiary may in its sole discretion consider necessary and appropriate to protect the security of this Deed of Trust. Such other things may include: taking and possessing copies of all of Trustor’s or the then owner's books and records concerning the Property; entering into, enforcing, modifying, or canceling Leases on such terms and conditions as Beneficiary may consider proper; obtaining and evicting tenants; fixing or modifying Rents; collecting and receiving any payment of money owing to Trustor; completing any unfinished construction; and/or contracting for and making repairs and alterations. If Beneficiary so requests, Trustor shall assemble all of the Property that has been removed from the Land and make all of it available to Beneficiary at the site of the Land. Trustor hereby irrevocably constitutes and appoints Beneficiary as Trustor's attorney-in-fact to perform such acts and execute such documents as Beneficiary in its sole discretion may consider to be appropriate in connection with taking these measures, including endorsement of Trustor's name on any instruments.
d. UCC Remedies. Beneficiary may exercise any or all of the remedies granted to a secured party under the UCC.
e. Judicial Action. Beneficiary may bring an action in any court of competent jurisdiction to foreclose this Deed of Trust in the manner provided by law for foreclosure of mortgages on real property and/or to obtain specific enforcement of any of the covenants or agreements of this Deed of Trust.
f. Power of Sale. Under the power of sale hereby granted, Beneficiary shall have the discretionary right to cause some or all of the Property, including any Property which constitutes personal property, to be sold or otherwise disposed of in any combination and in any 363
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manner permitted by applicable law.

Trustor’s limited partners (the “Limited Partners”) shall have the right to cure any default of Trustor hereunder and any of the Loan Documents upon the same terms and conditions afforded to Trustor. Provided that Beneficiary has been given written notice of the address for delivery of notices to the Limited Partners, Beneficiary shall provide any notice of default hereunder to the Limited Partners concurrently with the provision of such notice to Trustor, and as to the Limited Partners, the cure periods specified herein shall commence upon the date of delivery of such notice in accordance with Section 10.2.

8.3 Power of Sale. If Beneficiary elects to invoke the power of sale hereby granted, Beneficiary shall execute or cause the Trustee to execute a written notice of such default and of its election to cause the Property to be sold to satisfy the obligations hereof, and shall cause such notice to be recorded in the office of the Recorder of each County wherein the Property or some part thereof is situated as required by law and this Deed of Trust.

Prior to publication of the notice of sale, Beneficiary shall deliver to Trustee this Deed of Trust and the Note or other evidence of indebtedness which is secured hereby, together with a written request for the Trustee to proceed with a sale of the Property, pursuant to the provisions of law and this Deed of Trust.

Notice of sale having been given as then required by law, and not less than the time then required by law having elapsed after recordation of such notice of default, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in the notice of sale, either as a whole or in separate parcels and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may, and at Beneficiary’s request shall, postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time and place fixed by the preceding postponement. Trustee shall deliver to the purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary, may purchase at such sale.

After deducting all costs, fees, and expenses of Trustee and of the trust hereby created, including reasonable attorneys’ fees in connection with sale, Trustee shall apply the proceeds of sale to payment of all sums advanced or expended by Beneficiary or Trustee under the terms hereof and all outstanding sums then secured hereby, and the remainder, if any, to the person or persons legally entitled thereto.

Without limiting the generality of the foregoing, Trustor acknowledges and agrees that regardless of whether or not a default has occurred hereunder, if an Event of Default has occurred under the City Documents, and if in connection with such Event of Default Beneficiary exercises its right to foreclose on the Property, then: (i) Beneficiary shall be entitled to declare all amounts due under the Note immediately due and payable, and (ii) the proceeds of any sale of the Property in connection with such foreclosure shall be used to pay all Secured Obligations, including without limitation, the outstanding principal balance and all other amounts due under 364
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the Note.

At any foreclosure sale, any person, including Trustor, Trustee or Beneficiary, may bid for and acquire the Property or any part of it to the extent permitted by then applicable law.

Instead of paying cash for such property, Beneficiary may settle for the purchase price by crediting the sales price of the property against the following obligations:
a. First, the portion of the Secured Obligations attributable to the expenses of sale, costs of any action and any other sums for which Trustor is obligated to pay or reimburse Beneficiary or Trustee under Section 7.11(c); and
b. Second, the remaining balance of all other Secured Obligations in any order and proportions as Beneficiary in its sole discretion may choose.

8.4 Trustor’s Right to Reinstate. Notwithstanding Beneficiary’s acceleration of the sums secured by this Deed of Trust, Trustor shall have the right to have any proceedings begun by Beneficiary to enforce this Deed of Trust discontinued at any time prior to five days before sale of the Property pursuant to the power of sale contained in this Deed of Trust or at any time prior to entry of a judgment enforcing this Deed of Trust if: (a) Trustor pays Beneficiary all sums which would be then due under the Loan Documents if the Secured Obligations had no acceleration provision; (b) Trustor cures all breaches of any other covenants or agreements of Trustor contained in this Deed of Trust; (c) Trustor pays all reasonable expenses incurred by Beneficiary and Trustee in enforcing the covenants and agreements of Trustor contained in this Deed of Trust, and in enforcing Beneficiary’s and Trustee’s remedies as provided herein, including, but not limited to, reasonable attorney’s fees; and (d) Trustor takes such action as Beneficiary may reasonably require to assure that the lien of this Deed of Trust, Beneficiary’s interest in the Property and Trustor’s obligation to pay the sums secured by this Deed of Trust shall continue unimpaired. Upon such payment and cure by Trustor, this Deed of Trust and the obligations secured hereby shall remain in full force and effect as if no acceleration had occurred.

Nothing contained in Sections 8.3 and 8.4 is intended to expand upon or limit the rights of Trustor and Beneficiary under California law regarding Beneficiary’s exercise of the power of sale or Trustor’s reinstatement rights.

9. Trustor's Waivers. To the fullest extent permitted by law, Trustor waives: (a) all statutes of limitations as a defense to any action or proceeding brought against Trustor by Beneficiary; (b) the benefit of all laws now existing or which may hereafter be enacted providing for any appraisement, valuation, stay, extension, redemption or moratorium; (c) all rights of marshalling in the event of foreclosure; and (d) all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, notices of acceptance of this Deed of Trust and of the existence, creation, or incurring of new or additional indebtedness, and demands and notices of every kind.

10. Miscellaneous Provisions.
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10.1 Additional Provisions. The City Documents grant further rights to Beneficiary and contain further agreements and affirmative and negative covenants by Trustor which apply to this Deed of Trust and the Property.

10.2 Notices. Trustor requests that a copy of notice of default and notice of sale be mailed to Trustor at the address set forth below. That address is also the mailing address of Trustor as debtor under the UCC. Beneficiary’s address set forth below is the address for Beneficiary as secured party under the UCC. Except for any notice required under applicable law to be given in another manner, all notices to be sent pursuant to this Deed of Trust shall be made in writing, and sent to the parties at their respective addresses specified below or to such other address as a party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by:
a. personal delivery, in which case notice shall be deemed delivered upon receipt;
b. certified or registered mail, return receipt requested, in which case notice shall be deemed delivered two (2) business days after deposit, postage prepaid in the United States mail;
c. nationally recognized overnight courier, in which case notice shall be deemed delivered one (1) day after deposit with such courier; or d. facsimile transmission, in which case notice shall be deemed delivered on transmittal, provided that a transmission report is generated reflecting the accurate transmission thereof.

Beneficiary:

City of South Lake Tahoe
1901 Lisa Maloff Way
South Lake Tahoe, CA 96150
Attention: City Manager
With a copy to:

City Attorney
City of South Lake Tahoe
1901 Lisa Maloff Way, Suite 300
South Lake Tahoe, CA 96150
Trustor:

Sugar Pine Phase 3 Housing Partners, L.P.
c/o Related California
44 Montgomery Street, Suite 1310
San Francisco, California 94104
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Attention: Ann Silverberg
With a copy to:

10.3 Binding on Successors. The terms, covenants and conditions of this Deed of Trust shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest, transferees, and assigns of the Trustor, Beneficiary and Trustee; provided however this Section 10.3 does not waive the provisions of Section 7.4.

10.4 Substitution of Trustee. Beneficiary may from time to time or at any time substitute a trustee or trustees to execute the trust hereby created, and when any such substitution has been filed for record in the office of the Recorder of El Dorado County, it shall be conclusive evidence of the appointment of such trustee or trustees, and such new trustee or trustees shall succeed to all of the powers and duties of the Trustee named herein.

10.5 Attorneys’ Fees and Costs. In any action or proceeding to foreclose this Deed of Trust or to enforce any right of Beneficiary or of Trustee, Trustor shall pay to Beneficiary and Trustee all costs of such action or proceeding, including reasonable attorneys’ fees.

10.6 Governing Law; Severability; Interpretation. This Deed of Trust shall be governed by the laws of the State of California without regard to principles of conflicts of laws.

Trustor agrees that any controversy arising under or in relation to this Deed of Trust shall be litigated exclusively in the jurisdiction where the Land is located (the “Property Jurisdiction”).

The state and federal courts and authorities with jurisdiction in the Property Jurisdiction shall have exclusive jurisdiction over all controversies which shall arise under or in relation to the City Documents. Trustor irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation, and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. If any provision of this Deed of Trust is held unenforceable or void, that provision shall be deemed severable from the remaining provisions, and shall in no way affect the validity of this Deed of Trust. The captions used in this Deed of Trust are for convenience only and are not intended to affect the interpretation or construction of the provisions herein contained. In this Deed of Trust, whenever the context so requires, the singular number includes the plural.

10.7 Waiver, Modification and Amendment. Any waiver by Beneficiary of any 367
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obligation of Trustor hereunder must be in writing, and no waiver shall be construed as a continuing waiver. No waiver shall be implied from any delay or failure by Beneficiary or Trustee to take action on account of any default of Trustor. Consent by Beneficiary or Trustee to any act or omission by Trustor shall not be construed as a consent to any other or subsequent act or omission or to waive the requirement for Beneficiary’s or Trustee’s consent to be obtained in any future or other instance. No amendment to or modification of this Deed of Trust shall be effective unless and until such amendment or modification is in writing, executed by Trustor and Beneficiary. Without limiting the generality of the foregoing, Beneficiary’s acceptance of payment of any sum secured hereby after its due date shall not constitute a waiver by Beneficiary of its right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay.

10.8 Action By Beneficiary. Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, or consent by the Beneficiary is required or permitted under this Agreement, such action shall be in writing, and such action may be given, made or taken by Beneficiary’s Executive Director or by any person who shall have been designated by Beneficiary’s Executive Director, without further approval by the governing board of Beneficiary. Beneficiary shall use reasonable best efforts to respond to requests for any such approval, notice, direction, or consent in a timely manner. In any approval, consent, or other determination by Beneficiary required hereunder, Beneficiary shall act reasonably and in good faith.

10.9 Joint and Several Liability. If Trustor consists of more than one person or entity, each shall be jointly and severally liable for the faithful performance of all of Trustor’s obligations under this Deed of Trust.

10.10 Time is of the Essence. Time is of the essence for each provision of this Deed of Trust.

SIGNATURES ON FOLLOWING PAGE.
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IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the date first written above.

TRUSTOR:

Jean Diaz, Executive Director
By: Sugar Pine Phase 3 Housing Development
Co., LLC, a California limited liability
company, its administrative general partner
By:

Ann Silverberg, President
SIGNATURES MUST BE NOTARIZED.
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EXHIBIT "A"

LAND LEGAL DESCRIPTION
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EXHIBIT “A”

LEGAL DESCRIPTION
PHASE 2A WEST

ALL THAT REAL PROPERTY SITUATED IN THE CITY OF SOUTH LAKE TAHOE, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:

ALL THE PORTION OF THE FOLLOWING DESCRIBED AREA LYING ABOVE THE ELEVATION 6,264.00 FEET:

3. NORTH 31°22’30” WEST, 200.00 FEET

4. SOUTH 63°42’00” WEST, 208.56 FEET
THENCE LEAVING THE BOUNDARY LINES OF SAID TRACT 1, SOUTH 31°22’30” WEST 8.01 FEET; THENCE SOUTH 58’37’30” WEST, 78.00 FEET;
THENCE NORTH 31°22’30” WEST, 16.49 FEET;
THENCE SOUTH 58°37’30” WEST, 81.72 FEET;
THENCE NORTH 76°22’30” WEST, 22.20 FEET;
THENCE SOUTH 58°37’30” WEST, 44.38 FEET TO THE BEGINNING OF A NON-TANGENT CURVE TO THE RIGHT, THE RADIUS POINT OF WHICH BEARS SOUTH 84°19’52” WEST, 85.25 FEET FROM SAID POINT;
THENCE ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 10°14’58”, FOR AN ARC LENGTH OF

CONTAINING AN AREA OF 96,848 SQUARE FEET (2.22 ACRES), MORE OR LESS.

THE VERTICAL DATUM FOR THE ELEVATIONS DESCRIBED HEREIN IS THE NORTH AMERICAN VERTICAL DATUM OF 1988, AS TAKEN FROM THE CITY OF SOUTH LAKE TAHOE BENCHMARK NO. 7- A. ELEVATION TAKEN AS 6293.90 FEET.

THE LAND DESCRIBED HEREON IS SHOWN ON THE ATTACHED PLAT, EXHIBIT “B”, AND IS BY REFERENCE, MADE A PART THEREOF.
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THIS LEGAL DESCRIPTION WAS PREPARED BY ME OR UNDER MY

DIRECTION PURSUANT TO THE REQUIREMENTS OF THE PROFESSIONAL LAND SURVEYOR’S ACT.
05/02/2023
CHRISTIAN CINTEAN, PLS 8941 DATE
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This Leasehold Deed of Trust Rider (the “Rider”), entered into as _______________ 1, 2023 , by and between SUGAR PINE PHASE 3 HOUSING PARTNERS, L.P., a California limited partnership (“Borrower” or “Partnership”) and the CITY OF SOUTH LAKE TAHOE, a municipal corporation (the “City”) is attached to and made a part of the Deed of Trust and Assignment of Rents (the “Deed of Trust”) dated of even date herewith by Borrower, as trustor, and City, as Beneficiary, and is for the benefit of the Borrower and the Limited Partner, as defined below. The Deed of Trust secures a loan in the original principal amount of $4,750,000.00 to Borrower (the “Loan”) and encumbers certain real property and improvements thereon consisting of a housing project for low income households, located in South Lake Tahoe, California (the “Project”).

The parties hereto agree that the following covenants, terms, and conditions shall be part of and shall modify or supplement the Deed of Trust and the Promissory Note secured by the Deed of Trust, as it may be amended from time to time, the Loan Agreement, and/or any other document(s) evidencing, securing, or governing the Loan (the “Loan Documents”) and that in the event of any inconsistency or conflict between the covenants, terms, and conditions of the Loan Documents and this Rider, the following covenants, terms, and conditions shall control and prevail:

1. Approval of Transfer to Partnership. Notwithstanding anything to the contrary in the Loan Documents, the transfer of the Project to Borrower shall not be a default under the Loan Documents, nor shall City have the right to accelerate the Loan based on such transfer.

2. Limited Partner. City acknowledges that the Partnership intends to bring in an investor limited partner, ______________________ (including any successors or assigns, “Limited Partner”) pursuant to an amendment and restatement of the existing Partnership Agreement entered into at the time the Limited Partner is admitted (the “Amended Partnership Agreement”). City consents to the admission to the Partnership of the Limited Partner and the withdrawal of the initial limited partner.

3. Limited Partner’s Right to Transfer Interest. Notwithstanding anything to the contrary contained in the Loan Documents, neither (i) the transfer of all or a portion of Limited Partner’s interest in the Partnership or (iii) the admission of a successor limited partner pursuant to the terms of the Partnership Agreement without the consent of the City shall constitute an event of default under the Loan Documents or allow acceleration of the Note.

4. Nonrecourse Obligation. The Loan is a nonrecourse obligation of Borrower.

Neither Borrower nor its general or limited partner, nor any other party shall have any personal liability for repayment of the Loan. The sole recourse of City under the Loan Documents for repayment of the Loan shall be the exercise of its rights against the Project and related security thereunder.

5. General Partner Change. The withdrawal, removal, and/or replacement of a general partner of the Partnership pursuant to the terms of the Amended Partnership Agreement shall not constitute a default under any of the Loan Documents, and any 373
60064185.1
such actions shall not accelerate the maturity of the Loan.

6. Monetary Default. If a monetary event of default occurs under the terms of any of the Loan Documents, prior to exercising any remedies thereunder, City shall give the Limited Partner of the Partnership, as identified in Paragraph 8 below or as identified to City by written notice, simultaneous written notice of such default.

Borrower shall have a period of seven (7) days after such notice is given within which to cure the default prior to exercise of remedies by City and to Limited Partner under the Loan Documents, or such longer period of time as may be specified in the Loan Documents.

7. Non-Monetary Default. If a non-monetary event of default occurs under the terms of any of the Loan Documents, prior to exercising any remedies thereunder, City shall give Borrower and the Limited Partner of the Partnership, as identified in Paragraph 8 below or as identified to City by written notice, simultaneous written notice of such default. If the default is reasonably capable of being cured within thirty (30) days, Borrower shall have such period to effect a cure prior to exercise of remedies by City and Limited Partner under the Loan Documents, or such longer period of time as may be specified in the Loan Documents. If the default is such that it is not reasonably capable of being cured within thirty (30) days or such longer period if so specified, and if Borrower (a) initiates corrective action within said period, and (b) diligently, continually, and in good faith works to effect a cure as soon as possible, then Borrower shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by City and Limited Partner. If Borrower fails to take corrective action or to cure the default within a reasonable time, City shall give Borrower and the Limited Partner of the Partnership, as identified in Paragraph 8 below or as identified to City by written notice, written notice thereof, whereupon Limited Partner may remove and replace the General Partner with a substitute general partner who shall effect a cure within a reasonable time thereafter in accordance with the foregoing provisions. In no event shall City be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by any failure to cure a default or the default is not cured within one hundred eighty (180) days after the first notice of default is given, or such longer period of time as may be specified in the Loan Documents.

8. Notices. City shall give Limited Partner written notice of any default under the Loan Documents, and the cure periods contained in Paragraphs 6 and 7 above shall commence on the effective date of any such notice, at the following address:

Limited Partner: _________________________
With a copy to: __________________________
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Any cure periods available to the Limited Partner, either as specified in the Loan Documents or in this Rider, shall commence upon the date of any such notice to the Limited Partner. City hereby agrees that any cure of any default made or tendered by the Limited Partner shall be deemed to be a cure by the Borrower and shall be accepted or rejected on the same basis as if made or tendered by Borrower.

9. Casualty, Condemnation, Etc. In the event of any fire or other casualty to the Project or eminent domain proceedings resulting in condemnation of the Project or any part thereof, Borrower shall have the right to rebuild the Project, and to use all available insurance or condemnation proceeds therefor, provided that (a) such proceeds are sufficient to keep the Loan in balance and rebuild the Project in a manner that provides adequate security to City for repayment of the Loan or if such proceeds are insufficient then Borrower shall have funded any deficiency, (b) City shall have the right to approve plans and specifications for any major rebuilding and the right to approve disbursements of insurance or condemnation proceeds for rebuilding under a construction escrow or similar arrangement, and (c) no material default then exists under the Loan Documents. If the casualty or condemnation affects only part of the Project and total rebuilding is infeasible, then proceeds may be used for partial rebuilding and partial repayment of the Loan in a manner that provides adequate security to City for repayment of the remaining balance of the Loan. No such condemnation shall cause acceleration of the Loan unless it is a condemnation of the entire Property.

10. Lender Approvals, Etc. In any approval, consent, or other determination by City required under any of the Loan Documents, City shall act reasonably and in good faith.

11. Force Majeure. There shall be no default for construction delays beyond the reasonable control of Borrower, provided that such delays do not exceed one hundred eighty (180) days, or such longer period of time as may be specified in the Loan Documents.

12. Purchase Rights. At any put rights or rights of repurchase of the Limited Partner and the execution and delivery of a purchase option and right of first refusal agreement described in the Amended Partnership Agreement shall not constitute a default under the Loan Documents or accelerate the maturity of the Loan thereunder.

Any requisite consent of City to (a) the exercise of the rights under said purchase option and right of first refusal agreement by the project general partner or sponsor or its assignee, as applicable, identified therein, and to (b) the assumption without penalty of loan obligations by the project general partner or sponsor or its assignee, as applicable, and the release of Borrower from such obligations, shall not be unreasonably withheld. Subject to any such consent requirement, the exercise of rights under such agreement shall not constitute a default or accelerate maturity of the Loan.

13. Loan Assumption. If the purchase option and right of first refusal agreement described in Paragraph 12 is not exercised and the Project is sold subject to low 375
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income housing use restrictions as contained in an existing regulatory agreement or other recorded covenant, any requisite consent of City to said sale, and to the assumption without penalty of loan obligations by the purchaser and the release of Borrower from such obligations, shall not be unreasonably withheld.

14. Partial Subordination to Extended Use Agreement. City acknowledges that Borrower and the California Tax Credit Allocation Committee have or intend to enter into, or concurrently with the execution and delivery of the Loan Documents are entering into, a Regulatory Agreement (the “TCAC Regulatory Agreement”), which constitutes the extended low-income housing commitment described in Section 42(h)(6)(B) of the Internal Revenue Code, as amended (the “Code”).

County acknowledges and agrees that, in the event of a foreclosure of its interest under the Mortgage or delivery by the Partnership of a deed in lieu thereof (collectively, a “Foreclosure”), the following rule contained in Section 42(h)(6)(E)(ii) of the Code shall apply:

For a period of three (3) years from the date of Foreclosure, with respect to any unit that had been regulated by the TCAC Regulatory Agreement, (i) none of the eligible tenants occupying those units at the time of Foreclosure may be evicted or their tenancy terminated (other than for good cause, including but not limited to, the tenants’ ineligibility pursuant to regulations of Section 42 of the Code), (ii) nor may any rent be increased except as otherwise permitted under Section 42 of the Code.

16. Survival. Except to the extent expressly modified, supplemented or amended in this Rider, the Loan Documents remain in full force and effect. 376
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EXHIBIT C

1. Bond Loan and Taxable Construction Loan:

Lender (Not Related):

Amount: $_____________ Construction and $________ Permanent Type: Construction/Permanent

2. _______________ Loan:

Lender (Not Related):

Source:

Amount:

Type:
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I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature_____________________________
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EXHIBIT F

FINANCING PLAN
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FINANCING PLAN

1. Taxable Loan
Lender: Citibank, N.A.

Amount: $35,285,520 Construction;
$2,120,000 Permanent
Type: Construction/Permanent

2. AHSC Loan
Lender: HCD
Source: Affordable Housing &
Sustainable Communities
Amount: $10,551,967
Type: Permanent

3. PLHA Loan
Lender: City of South Lake Tahoe
Source: HCD Permanent Local Housing
Allocation Grant
Amount: $4,750,000
Type: Construction/Permanent

4. City of South Lake Tahoe Coverage Loan
Lender: City of South Lake Tahoe
Amount: $995,513
Type: Construction/Permanent

5. California Housing Accelerator
Lender: Sponsor Loan
Amount: $23,888,864
Type: Permanent

6. Infill Infrastructure Grant
Lender: Sponsor Loan
Amount: $2,965,000
Type: Construction/Permanent

7. HCD LGMG Loan
Lender: Sponsor Loan
Source: HCD Local Government
Matching Grant
Amount: $4,304,935
Type: Construction/Permanent
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City of South Lake Tahoe
Agenda Item Executive Summary
Joe Irvin, City Manager
Meeting Date: June 20, 2023
Agenda Item #: 11
Agenda Item: Sugar Pine Village Phase 2A Funding
Executive Summary: The City and Related Companies of California were awarded $17,359,470 in Affordable Housing and Sustainable Communities (AHSC) funds and $23,888,864 in California Housing Accelerator Program (CHAP) funds. The City Council is requested to authorize a co-applicant agreement necessary to appropriately administer the funds as well as a resolution to enter into a Standard Agreement to accept the CHAP funds. The City Council is also requested to adopt a resolution creating Capital Improvement Plan (CIP) project and to amend the budget to appropriate funds consistent with the AHSC Standard Agreement.

Requested Action / Suggested Motions: (1) Pass a Motion authorizing and directing the Mayor to execute the Affordable Housing and Sustainable Communities (AHSC) and California Housing Accelerator Program (CHAP) co-applicant agreement with Related Companies of California, LLC; (2) Pass a Resolution authorizing the City to be a signatory to the Standard Agreement associated with CHAP funds in the amount of $23,888,864; and (3) Pass a Resolution authorizing the creation of the associated CIP projects and budget amendments necessary to appropriate $6,522,543 associated with the AHSC grant.

CEQA Determination: This action is statutorily exempt from environmental review under Government Code section 65913.4 (SB 35), because it is an action taken to provide financial assistance to a development that receives streamlined approval and that is to be used for housing for persons and families of very low, low, or moderate income, and Public Resources Code section 21080.35 (solar panels), and is categorically exempt under CEQA Guidelines 15301 (existing facilities) with respect to the bicycle and pedestrian improvements.

Responsible Staff Member: Zach Thomas, Housing Manager
Responsible Staff Member: Zach Thomas, Housing Manager (530) 542-7400 Reviewed and Approved By:

Hilary Roverud, Development Service Director
Susan Blankenship, City Clerk
Olga Tikhomirova, Director of Finance
Heather Stroud, City Attorney
Attachments:
01-Staff Report - Sugar Pine Phase 2A.docx
02-Resolution - Budget Appropriation.docx
03-Resolution - California Housing Accelerator.docx
04-Agreement with Related of California.docx
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Council Agenda Report- June 20, 2023 Page 1 of 5
City of South Lake Tahoe
Report to City Council
Meeting Date: June 20, 2023
Title: Affordable Housing and Sustainable Communities (AHSC) Co-Applicant Agreement, California Housing Accelerator Program (CHAP) Resolution and Associated Budget and Capital Improvement Plan (CIP) Amendments
Location: 1860 Lake Tahoe Boulevard and 1029 Tata Lane
Responsible Staff Member: Zach Thomas, Housing Manager (530) 542-7400 Description/Analysis
Background: The Sugar Pine Village project is a proposed 248-unit affordable housing project, with onsite community service facilities on 11.6 acres of land owned by the State of California and managed by the California Tahoe Conservancy (Conservancy). This project is a result of the Governor’s Executive Order N-06-19, which directed the California Department of General Services (DGS) to identify excess state properties as potential affordable housing development sites. In July 2020, the Conservancy announced the State had selected Related Companies of California LLC in partnership with the St. Joseph Community Land Trust to construct and manage the Sugar Pine Village project.

Construction will continue throughout 2023 and into 2024. Phase 2A has recently secured all funding necessary and final financing of that phase is anticipated in August 2023.

The California Affordable Housing Sustainable Communities (AHSC) Program provides funding for affordable housing and transportation projects close to jobs, schools, and other daily destinations to help California meet both its climate and equity goals. Funded by auction proceeds from California’s Cap-and-Trade emissions reduction program, AHSC is administered by the Strategic Growth Council and implemented by the California Department of Housing and Community Development.

Sugar Pine Village Phase 2A and AHSC Funding
The process of funding Phase 2A began in 2021. At its May 18, 2021 meeting, the City Council adopted Resolution 2021-035 authorizing staff to submit a joint application with Related 382
Council Agenda Report- June 20, 2023 Page 2 of 5
Companies of California LLC (Related) under the AHSC Program for an amount not to exceed $30,000,000 of which an amount not to exceed $20,000,000 will be provided as a loan for the affordable housing construction and an amount not to exceed $10,000,000 will be provided as a reimbursable grant for Housing Related Infrastructure (HRI), Sustainable Transportation Infrastructure (STI), Transit Related Infrastructure (TRA) or Program activities as defined in the AHSC Program Guidelines.

On February 4, 2022 the City and South Lake Tahoe and Related was awarded an AHSC program award of $17,359,470. This includes a $10,551,967 loan towards the construction of Sugar Pine Village Phase 2A and $6,807,503 in reimbursable grants for the development of transportation related infrastructure, less $284,960 for program activities for Related Companies.

Non-housing related projects for which the City is responsible includes approximately $2,000,000+ of pedestrian, and bike lane improvements in the immediate vicinity of the projects (Julie Lane, Tata Lane, and Lake Tahoe Boulevard) and approximately $2,000,000 million in solar panel installation consistent with the goals of the City’s climate action plan. The street improvements were specifically considered to help address concerns expressed during neighborhood meetings and the proposed solar panel installation was contemplated to leverage the solar installation as part of the City’s SEED solar project.

While separate from the City’s obligations under the AHSC grant, the award also included a $2,100,000 contribution towards interregional and/or local transit. Specifically, the money is to be used by Capital Corridor to purchase Zero-Emission buses. As previously noted, the AHSC Program is designed around achieving the broad environmental objective of reducing greenhouse gas (GHG) emissions. A future agreement between the City and the Capital Corridor will be necessary for the implementation of this project.

Sugar Pine Village Phase 2A and CHAP Funding
Like the first phase currently under construction, Phase 2A was anticipated to use equity from the sale of tax credits. Equity generated from tax credits is typically an important component of the financing structure of affordable housing projects. Four percent tax credits were historically available on a non-competitive basis. However, due to various factors, the current demand throughout the state outweighs the available supply. This has resulted in the delay of shovel ready projects that have received other grants funds and would otherwise be viable.

To remedy this situation, the State of California implemented the California Housing Accelerator Program (CHAP), to provide funding in-lieu of that which would have otherwise been provided through the allocation and subsequent sale of tax-credits. On December 29, 2022, Sugar Pine Village was awarded $23,888,864 for Phase 2A. The awarded coupled with other grants, including the AHSC program, means that Phase 2A is now fully funded.

The guidelines associated with the CHAP program stipulated that if the project is the recipient of various other funds (included AHSC), that all project partners need to be party to the Standard Agreement.

Issue and Discussion: The AHSC program is different from most other funding sources in that it seeks to reduce GHG emissions through projects that implement land-use, housing, transportation and agricultural land preservations. That the AHSC Program seeks to accomplish a broad environmental objective, rather than just construct housing, makes it a unique program in the field of affordable housing funding sources. Specifically, it mandates that a certain amount of 383
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awarded funds be used for non-housing transportation related infrastructure and other infrastructure that reduces GHG emissions. All improvements funded by the AHSC program must be sustainable by design and provide reductions in GHG emissions. This allows the community to benefit not just from the affordable housing but also from the associated infrastructure improvements.

The broad scope and intent of the program requires close collaboration between Related and the City to successfully implement the projects for which the funds were awarded. Unlike other grant sources, in which the City receives the money and passes it through to Related in the form of a loan, this program requires Related and the City to each bare primary responsibility for their respective project components.

The general scope of the non-housing related infrastructure improvements for which the City will have direct responsibility are as follows:
 Approximately 1,121 linear feet of bike trail along Tata Lane at a cost $1,355/LF totaling approximately $1,520,000.
 Approximately 968 linear feet of sidewalk along the west side of Julie Lane and approximately 300 feet of side walk along the north side of Lake Tahoe Boulevard at a cost of $400/LF totaling approximately $507,000.
 Approximately 700Kw of solar panels constructed throughout the City Public Works Campus at a cost of approximately $2,000,000
The close collaboration required for the implementation of the AHSC related projects as well as the guidelines associated with the CHAP funding require the City Council to authorize the following documents:
1) A Co-Applicant agreement between the City and Related. This agreement documents the obligations and indemnities between the two parties.
2) The resolution associated with the CHAP funds. This resolution will authorize the City to be a signatory to the Standard Agreement associated with the CHAP funds. 3) The resolution authorizing the creation of Capital Improvement Plan (CIP) projects consistent with the AHSC Standard Agreement and the budget amendments and creation of account numbers, upon execution of the Standard Agreement, necessary to appropriate $6,522,543 associated with AHSC grant funds.

Staff recommends that the City Council authorize the above noted documents, which will enable the financing of Sugar Pine Village Phase 2A.

Financial Implications: The AHSC Program award contains $6,522,543 of “non-housing” related improvements. $4,422,543 of which the City, as the joint applicant, will carry primary responsibility for completion. The City will not carry primary responsibility for potential improvements to interregional and/or local transit but rather serve as a pass-through entity for the distribution of funds of $2,100,000.

City responsibilities will include providing the initial capital for approximately $6,522,543 of identified improvements consistent with the AHSC Program application and guidelines.

Expenditures consistent with and in compliance with the award agreement are reimbursable to the City up to the maximum agreed amount. Budget amendments would appropriate funding for the capital projects into accounts as listed in the resolution. 384
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Environmental Considerations: For projects that satisfy criteria specified by SB 35, the guidelines issued by HCD specify that the California Environmental Quality Act (CEQA) does not apply to actions taken by a local government to provide financial assistance to a development that receives streamlined approval and that is to be used for housing for persons and families of very low, low, or moderate income, as defined in Section 50093 of the Health and Safety Code.

Construction of sidewalk and bike trail is considered categorically exempt from CEQA under CEQA Guidelines Section 15301, Existing Facilities, which exempts minor alteration of existing public facilities involving negligible or no expansion of existing use. An example provided by the CEQA Guidelines includes alterations of existing streets for the addition of bicycle facilities, transit improvements, pedestrian crossings, and other similar alterations that do not create additional automobile lanes.

Public Resource Code Section 21080.35, CEQA Statute, exempts from CEQA review most solar energy installations and associated equipment on the roof of an existing building or on an existing parking lot.

Policy Implications: The recommended actions are consistent with the City Strategic Plan which identifies supporting the Sugar Pine Village Project as Action Item 1.3.2: Pro-actively work with current affordable housing developers and partner agencies to implement the Sugar Pine Village project.

The recommended action is consistent with the following adopted policies and programs:

Policy 2-2 The City shall enable opportunities for deed-restricted affordable ownership housing to ensure long-term affordability.

Policy 2-5 The City shall recognize that it will become difficult to attract employees if they cannot afford to purchase or rent housing in South Lake Tahoe. The City shall encourage and support programs and activities that create a robust local economy that provides residents with good paying employment and the means to purchase and/or rent housing in the city.

Program 2-6 ANALYSIS OF FEDERAL AND STATE LANDS
The City shall continue discussing the potential for developing quality workforce and affordable housing on non-environmentally sensitive lands owned by the California Tahoe Conservancy (CTC) and the United States Forest Service (USFS). The City shall ensure that important natural resources are protected and only pursue surplus lands that these agencies have determined do not have a clear and compatible conservation or recreation purpose consistent with agency goals. 385
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Tahoe Valley Area Plan
Policy H-1.1 – Housing Options
Provide for a range of housing options that include affordable, moderate-income, and workforce housing so that people can live and work in the City.

Policy H-1.5 – Redirection of Development
Direct high density residential development to areas of Tahoe Valley that are within walking distance of public transit and services.

Policy H-2.1 – General
Encourage the creation of residential uses to support and add vitality to commercial and public service projects in the Tahoe Valley area.
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Resolution 2023-XXX
Adopted by the City of South Lake Tahoe
City Council
June 20, 2023
Upon Execution of the Affordable Housing and Sustainable Communities (AHSC) Standard Agreement Authorize the Creation of Capital Improvement Plan (CIP) Projects, Creation of Account Numbers and Budget Appropriation for the Construction of Sustainable Transportation Infrastructure (STI) and Transportation Related Amenities (TRA) as outlined in the Standard Agreement

BACKGROUND
A. The State of California, the Strategic Growth Council (“SGC”) and the Department of Housing and Community Development (“Department”) issued a Notice of Funding Availability (“NOFA”) dated February 26, 2021, under the Affordable Housing and Sustainable Communities (“AHSC”) Program established under Division 44, Part 1 of the Public Resources Code commencing with Section 75200.

B. The SGC is authorized to approve funding allocations for the AHSC Program, subject to the terms and conditions of the NOFA, AHSC Program Guidelines adopted by SGC on February 24, 2021 (“Program Guidelines”), an application package released by the Department for the AHSC Program (“Application Package”), and an AHSC standard agreement with the State of California (“Standard Agreement”), the Department is authorized to administer the approved funding allocations of the AHSC Program.

C. The AHSC Program provides grants and loans to applicants identified through a competitive process for the development of projects that, per the Program Guidelines, will create new affordable housing and achieve greenhouse gas reductions and benefit disadvantaged communities through increased accessibility to affordable housing, employment centers and key destinations via low-carbon transportation.

D. On May 18, 2021, the City Council adopted Resolution 2021-035 authorizing the joint application for the Affordable Housing and Sustainable Communities (AHSC) Program in an amount not to exceed $30,000,000.00 of which an amount not to exceed $20,000,000 will be provided as a loan for an Affordable Housing Development (“AHD”) (“AHSC Loan”) and $10,000,000 will be provided as a grant for Housing-Related Infrastructure (“HRI”), Sustainable Transportation Infrastructure (“STI”), Transit-Related Amenities (“TRA”) or Program (‘PGM”) activities (“AHSC Grant”) as defined the AHSC Program Guidelines and AHSC Program documents
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E. On February 4, 2022 the City of South Lake Tahoe and Related Companies of California, LLC were awarded $17,359,470 in PLHA funds for use in the development of the Project and subject to the terms and conditions as specified in the Standard Agreement. This includes a $10,551,967 loan to and towards the construction of Sugar Pine Village Phase 2A and $6,522,543 in reimbursable grants for the development of transportation related infrastructure for which the City is responsible.

BASED ON THE FACTS SET FORTH IN THE BACKGROUND, BE IT RESOLVED, that the City Council of the City of South Lake Tahoe:

1. Create account numbers (301-50046) and appropriate budgeting for the bike/pedestrian improvement AHSC STI funds as follows:

Revenue (33244) $2,422,543
Soft Costs (48020) $433,199
Project Construction Costs (48030) $1,989,344

2. Use existing Transit Operations account (550-05220) to appropriate budgeting for the transit AHSC STI funds for a pass-through of funds to purchase Zero-Emission buses as follows:

Revenue (33244) $2,100,000
Grant to Subrecipient (44032) $2,100,000

3. Create account numbers (301-60081) and appropriate budgeting for the solar project AHSC TRA funds as follows:

Revenue (33244) $2,000,000
Soft Costs (48020) $250,000
Project Construction Costs (48030) $1,750,000
FURTHER RESOLVED, That the City Council authorizes the creation of projects in the CIP consistent with those identified in the AHSC application authorized by resolution 2021-035 and contingent upon the execution of the Standard Agreement.

Adopted by the City of South Tahoe City Council on June 20, 2023 by the following vote:

Yes:

No:

Absent:

Abstain:
________________________ Date:_________
Cristi Creegan, Mayor
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Resolution 2023-XXX June 20, 2023 Page 3 of 3
Attest:
________________________
Susan Blankenship, City Clerk
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California Housing Accelerator 9/23/2021
Public Entity - Sponsor
60064453.1

RESOLUTION OF THE OF THE

CITY OF SOUTH LAKE TAHOE CITY COUNCIL

CALIFORNIA HOUSING ACCELERATOR
RESOLUTION NO.:
[Sugar Pine Village Phase 2A]
WHEREAS, the California Department of Housing and Community Development ("Department"), as authorized by Chapter 6.6 (commencing with Section 50672) of Part 2 of Division 31 of the Health and Safety Code, has issued a Project Solicitation and Guidelines, dated February 28, 2022, under its California Housing Accelerator program (“Solicitation”);
WHEREAS, City of South Lake Tahoe (“Public Entity”) is authorized and directed to submit an application in response to the Solicitation (the “Application”), together with The Related Companies of California, LLC, for Sugar Pine Village Phase 2A (the “Project”); and
WHEREAS, the Department will make a conditional commitment of California Housing Accelerator funds for the Project in reliance on the representations in that Application (the “California Housing Accelerator Loan”).

NOW, THEREFORE, IT IS RESOLVED, that the Public Entity is hereby authorized and directed to act in connection with the Department’s award of the California Housing Accelerator Loan for the Project.

RESOLVED FURTHER: That in connection with the California Housing Accelerator Loan, the Public Entity is authorized and directed to enter into, execute, and deliver an STD 213, Standard Agreement in connection with the Project in an amount not to exceed $23,888,864, and any and all other documents required or deemed necessary or appropriate to secure the California Housing Accelerator Loan from the Department for the Project and to participate in the California Housing Accelerator program, and all amendments thereto (collectively, the “California Housing Accelerator Loan Documents”).

RESOLVED FURTHER: Public Entity acknowledges and agrees that it shall be subject to the terms and conditions specified in the Standard Agreement, and that the Solicitation and the Standard Agreement will be incorporated in the Standard Agreement by reference and made a part thereof. Any and all activities, expenditures, information, and timelines represented in the Application are enforceable through the 390
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California Housing Accelerator 9/23/2021
Public Entity - Sponsor
60064453.1
Standard Agreement. Funds are to be used for the allowable expenditures, uses, and activities identified in the Standard Agreement.

RESOLVED FURTHER: That Joseph D. Irvin, City Manager or his designee is hereby authorized to execute the Application and the California Housing Accelerator Loan Documents on behalf of the Public Entity in connection with the Project.

Passed and adopted, effective as of , 20 __, by the consent of the Governing Body of Public Entity by the following vote:

AYES NAYS

ABSTAIN ABSENT

CERTIFICATE OF THE CLERK OF THE PUBLIC ENTITY
The undersigned, Clerk of Public Entity, does hereby attest and certify that the foregoing is a true, full and correct copy of a resolution of the Public Entity’s governing body adopted at a duly convened meeting on the date above-mentioned, and that the resolution has not been altered, amended, modified, repealed, rescinded, or annulled.

DATE:

Susan Blankenship, City Clerk
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CO-APPLICANTS’ AGREEMENT
This Co-Applicants' Agreement (the “Agreement”) is made as of June 20, 2023, by and amongst the City of South Lake Tahoe (the “City”) and The Related Companies of California, LLC, a California limited liability company (the “Developer”) with reference to the following facts and purposes:

RECITALS
A. Developer intends to develop that certain real property located in the City of South Lake Tahoe (the “Property”) commonly referred to as Sugar Pine Village Phase 2A (the “Project”). Developer has formed Sugar Pine Phase 3 Housing Partners, L.P., a California limited partnership (Partnership), who will own and operate the Project.

B. The State of California, the Strategic Growth Council (SGC) and the Department of Housing and Community Development (HCD) issued a Notice of Funding Availability dated February 26, 2021 (the AHSC NOFA), under the Affordable Housing and Sustainable Communities (AHSC) Program established under Division 44, Part 1 of the Public Resources Code, commencing with Section 75200.

C. Developer and the City, as co-applicants, jointly applied for funds under the AHSC NOFA to provide funding for the Project, as well as funding for transportation-related public improvements to be constructed by the City.

D. HCD awarded Developer and the City an aggregate amount of $17,359,470 in AHSC Program Funds consisting of (A) $10,551,967 for a permanent loan for the Project (AHSC Loan) and (B) $6,807,503 for a grant (AHSC Grant), which shall be used for: (i) $4,522,543 for construction of the City’s Sustainable Transportation Infrastructure improvements (STI Improvements); (ii) $2,000,000 for construction of City’s Transportation Related Amenities (TRA Improvements) and (iii) $284,960 in program funds. The AHSC Grant and the AHSC Loan are collectively referred to herein as the “AHSC Financing.”
E. As co-applicants, the City and Developer are required to enter into certain agreements with HCD, including but not limited to standard agreements and a disbursement agreement (collectively, the “AHSC Documents”), where City and Developer will be jointly and severally liable for the full and timely performance of all obligations set forth in the AHSC Documents, including completion of the Project and the STI Improvements and/or TRA Improvements.

F. In addition to the AHSC Financing, HCD has awarded Developer and the Partnership $23,888,864 in California Housing Accelerator Program funds for the Project (CHAP Financing and together with the AHSC Financing, the “HCD Financing”). As coapplicants for the AHSC Financing, HCD requires that the City and Developer execute a certain agreements with HCD with respect to the CHAP Financing, including but not limited to a standard agreement (collectively, the CHAP Documents), which will require 392
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that City and Developer be jointly and severally liable for the full and timely performance of all obligations set forth in the CHAP Documents. Notwithstanding the foregoing, it is the intention of the parties that the City be fully indemnified with respect to any loss or liability arising with respect to the CHAP Documents.

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, the parties hereto agree as follows:

AGREEMENT

1. Obligations

1.1. The City and Developer each acknowledge and agree that the inability or failure by either party to fully and timely complete each party’s respective improvements required by the AHSC Documents may affect the timing and right of the other party to receive disbursement of AHSC Financing due the other party notwithstanding the other party’s full and timely performance of its obligations. Developer has informed the City and the City acknowledges that if the City is not in compliance with the City’s obligations under the AHSC Documents, or the STI Improvements or TRA Improvements are not completed in accordance with the requirements and schedule under the AHSC Documents, the City may cause a default under AHSC Documents, and the documents evidencing the Partnership’s loans and financing for the Project (the “Partnership Financing Documents”). The City and Developer each acknowledge and agree that each, for itself, will exercise all commercially reasonable, good faith efforts to do all things at all times necessary to commence and complete each party’s own improvements in accordance with the AHSC Documents. The City and Developer agree to give the other party a written monthly status report on the improvements to be constructed and/or installed by each party, i.e., Developer will report on the Partnership’s progress on the Project, and the City will report on the progress of the STI Improvements and the TRA Improvements.

1.2. If requested by either party, the other party will make available copies of approved design and construction documents, written public notices, and/or construction contracts. If either party anticipates not meeting the targeted construction and grant disbursement milestones as established in the AHSC Documents, that party will notify the other party in writing. If either party anticipates not being able to meet the required milestone dates as established in the AHSC Documents, that party will contact the other party as soon as is reasonably possible to discuss the reasons why the milestone dates may not be met and what actions the delayed party intends to take to meet the milestones or otherwise rectify the Project schedule in order to maintain good standing with the terms and conditions established in the AHSC Documents.

1.3. The City shall submit to HCD all draw requests for AHSC Grant funds for the costs associated with the STI Improvements and/or TRA Improvements and apply such proceeds to pay invoices for such work. The City shall be solely responsible for the performance and completion of the STI Improvements and/or TRA Improvements in accordance with the terms of the AHSC Documents and the approved design and construction documents. The Partnership shall be solely responsible for the performance and completion of the Project in 393
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accordance with the terms of the AHSC Documents and the approved design and construction documents.

1.4. The City will provide Developer with copies of all requisitions for work related to the STI Improvements and the TRA Improvements, the notice of completion, and other documents related to the STI Improvements and the TRA Improvements that Developer may reasonably request.

1.5. City assumes responsibility for any monitoring or reporting of reductions in greenhouse gas emissions during the term of the Standard Grant Agreement, which is one of the AHSC Documents. Developer will cooperate with the City and assist in responding to any reporting requests to the extent feasible.

2. Term of Agreement
The term of this Agreement shall coincide with the term of the AHSC Documents.

3. Indemnification

3.1 Developer shall indemnify, defend (with counsel approved by City), and hold the City and its officers, directors, employees, agents, consultants (collectively, “City Indemnitees”) harmless from and against any and all claims, losses, costs, damages, liability and judgments, including reasonable attorneys’ fees (with counsel of City’s choice), incurred by or asserted against any City Indemnitees arising in connection with any breach by Developer, the Partnership, any affiliate of Developer, or any contractor, subcontractor, agent or employee of Developer, the Partnership or any affiliate of Developer of any term or condition of the HCD Financing, including the HCD Documents or CHAP Documents and any related documents executed by Developer, the Partnership, or any affiliate of Developer; provided, that Developer’s indemnification obligations under this Agreement shall not extend to claims resulting solely from the gross negligence or willful misconduct of City Indemnitees. It is further agreed that City does not and shall not waive any rights against Developer or the Partnership that it may have by reason of this indemnity and hold harmless agreement because of City’s acceptance, or Developer’s or the Partnership’s deposit with City of any of the insurance policies.

3.2 City shall indemnify, defend (with counsel approved by Developer), and hold the Developer, the Partnership and their respective officers, directors, employees, agents, consultants and partiers (collectively, “Developer Indemnitees”) harmless from and against any and all claims, losses, costs, damages, liability and judgments, including reasonable attorneys’ fees (with counsel of Developer’s choice), incurred by or asserted against any Developer Indemnitees arising in connection with any breach by City, or any division, department, office, contractor, subcontractor, agent or employee of City of any term or condition of the AHSC Financing, including the AHSC Documents, and any related documents executed by City; provided, that City’s indemnification obligations under this Agreement shall not extend to claims resulting solely from the gross negligence or willful misconduct of Developer Indemnitees. It is further agreed that Developer does not and shall not waive any rights against City that it may have by reason of this indemnity and hold harmless agreement because of Developer’s acceptance, or 394
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City’s deposit with Developer of any of the insurance policies.

3.3 Neither party shall be liable to the other under or in connection with this Agreement for (i) loss of actual or anticipated profits; (ii) losses caused by business interruption; (iii) loss of goodwill or reputation; or (iv) any indirect, special or consequential cost, expense, loss or damage even if such cost, expense, loss or damage was reasonably foreseeable or might reasonably have been contemplated by the parties and whether arising from breach of contract, tort, negligence, breach of statutory duty or otherwise.

4. Cost Overruns
Developer and/or the Partnership shall be responsible for paying all costs required to complete the Project irrespective of whether such costs exceed the HCD Financing proceeds, and the City shall be responsible for paying all costs required to complete the STI Improvements and the TRA Improvements irrespective of whether such costs exceed the AHSC Grant proceeds allocated to the STI Improvements and the TRA Improvements.

5. Events of Default. The occurrence of any of the following events shall constitute an Event of Default under this Agreement:

5.1. A party fails to perform any of its obligations under this Agreement, and does not cure such failure within 30 days after written notice of such failure has been delivered to the defaulting party in accordance with Section 6.8 below or in the case of a default which cannot with due diligence be cured within 30 days, the party fails to commence to cure the default within 30 days of the notice and thereafter fails to prosecute the curing of such default with due diligence and in good faith to completion; or

5.2. A party purports to revoke this Agreement or this Agreement becomes ineffective for any reason.

6. General Provisions

6.1. Headings. The title and headings of the various Sections of this Agreement are intended for means of reference and are not intended to place any construction on the provisions of this Agreement.

6.2. Invalidity. If any provision of this Agreement shall be invalid or unenforceable the remaining provisions shall not be affected thereby, and every provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

6.3. Entire Agreement. The terms of this Agreement are intended by the parties hereto as a final expression of their agreement and may not be contradicted by evidence of any prior or contemporaneous agreement. No provision of this Agreement may be amended except by an agreement in writing signed by the parties hereto or their respective successors in interest.

The parties hereto were represented by attorneys with regard to the drafting of this Agreement, and neither party shall be deemed to be the drafter of this Agreement. 395
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6.4. Successors. This Agreement shall be binding upon and inure to the benefit of the heirs, executors, administrators, successors and assigns of the parties hereto.

6.5. Governing Law; Venue. This Agreement shall be governed by the law of the State of California. Venue for all litigation relative to the formation, interpretation and performance of this Agreement shall be in San Francisco.

6.6. Execution. This Agreement may be executed in multiple counterpart originals.

6.7. Relationship of Parties. Nothing contained in this Agreement shall be deemed or construed, either by the parties hereto or by any third party, to create the relationship of principal and agent or create any partnership, joint venture or other association between the City and Developer.

6.8. Notices. All notices, including deliveries of documentation (i.e., plans and contracts) for review and approval herein, shall be sent be a party hereto or its counsel by either personal delivery, a reputable overnight courier which keeps receipts of delivery (such as UPS, CalOvernight, or Federal Express), or through the facilities of the United States Post Office, postage prepaid, certified or registered mail, return receipt requested. Any such notice shall be effective upon delivery, if delivered by personal delivery or overnight courier, and 72 hours after 396
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dispatch, if mailed in accordance with the above. Notice to the respective parties shall be sent to the following addresses unless written notice of a change of address has been given pursuant hereto:

To Developer:

The Related Companies of California
44 Montgomery Street, Suite 1310
San Francisco, CA 94104
Attn: Ann Silverberg
To City City of South Lake Tahoe
City Manager
1901 Lisa Maloff Way
South Lake Tahoe, CA 96150
With a copy to: City of South Lake Tahoe
City Attorney
1901 Lisa Maloff Way, Suite 300
South Lake Tahoe, CA 96150

6.9. Third Party Beneficiary. The Partnership is intended to be and shall be a third-party beneficiary of this Agreement, and Developer and the City shall not amend, modify or terminate the Agreement without the Partnership’s express written consent.

6.10. Compliance with Laws. Developer shall keep itself fully informed of the City’s Charter, codes, ordinances and duly adopted rules and regulations of the City and of all state, and federal laws in any manner affecting the performance of this Agreement, and must at all times comply with such local codes, ordinances, and regulations and all applicable laws as they may be amended from time to time.
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IN WITNESS WHEREOF, the parties have executed this Agreement on or as of the date first above written.

DEVELOPER:

The Related Companies of California, LLC,
a California limited liability company
By:

Ann Silverberg, Vice President
CITY:

City of South Lake Tahoe
By:

Cristi Creegan, Mayor
Approve as to Form:
______________________________
Heather Stroud, City Attorney
ATTEST:
______________________________
Susan Blankenship, City Clerk
398
City of South Lake Tahoe
Agenda Item Executive Summary
Joe Irvin, City Manager
Meeting Date: June 20, 2023
Agenda Item #: 12
Agenda Item: Purchase of Four Police Patrol Vehicles from Michael Hohl Chevrolet with Related Equipment for an Amount Not to Exceed $422,310.18.

Executive Summary: This action item would authorize the purchase and equipping of two marked 2023 Chevrolet Tahoe 4WD PPV Police Vehicles and two Chevrolet Silverado 4WD PPV Police pickup for a total cost of $422,310.18. Two Tahoes and one Silverado would be assigned to general patrol, one Silverado would be built out and assigned as a K-9 vehicle.

Requested Action / Suggested Motions: Pass a Resolution authorizing purchase of four police patrol vehicles from Michael Hohl Subaru with related equipment for an amount not to exceed $422,310.18.

Responsible Staff Member: Jeff Roberson, Police Lieutenant Responsible Staff Member: Jeff Roberson, Police Lieutenant Reviewed and Approved By:

Susan Blankenship, City Clerk
Olga Tikhomirova, Director of Finance
Heather Stroud, City Attorney
Attachments:
01-Staff Report - PD Vehicles.docx
02-Resolution - Police Vehicle Replacement.docx
3-BidSummary Chevy Tahoe PPV.pdf
4-BidSummary Chevy Silverado PPV.pdf
5-Lehr equipment quote 2023 police vehicle equipment and build out.pdf 6-Wattco 2023 patrol truck build out.pdf
7-Wattco Silverado K9 build out.pdf
8-Axon - Fleet 2 Add-On Quote 5-2023.pdf
9-Walker Telecomm radios.pdf
10-Placer County contract Lehr.pdf
11-Napa County contract Wattco.pdf
12-GM GenerateOrderDetailPDF ppv 1500 slt police build 5-2023.pdf 13-GM- GenerateOrderDetailPDF ppv tahoe slt police build 5-2023.pdf 399
Council Agenda Report- June 20, 2023 Page 1 of 4
City of South Lake Tahoe
Report to City Council
Meeting Date: June 20, 2023
Title: Police Patrol Vehicle Replacement
Location: Police Department
Responsible Staff Member: Jeff Roberson, Police Lieutenant (530) 542-6521 Background: Historically, funding for the purchase of police vehicles has come almost entirely from Proposition 172 – Safety Sales Tax, a restricted revenue source required to be used specifically for Public safety services which includes sheriffs, police, fire protection, county district attorneys, county corrections and ocean lifeguards. This request to purchase four replacement patrol police vehicles uses funds from that source.

Issue and Discussion: The Police Department seeks to replace aging portions of our fleet as vehicles reach the end of their service life.

The Police Operations Division (marked patrol vehicles) currently has several high mileage vehicles to be replaced. These replaceable patrol cars are near 10 years old, have high mileage, high engine hours, or decommissioned as the result of collisions.

The Police Department seeks to purchase two 2023 Chevrolet Tahoe PPVs, both outfitted as patrol cars. Additionally, the police department requests to purchase two 2023 Chevrolet Silverado PPVs, one outfitted specifically as a K-9 vehicle.

Chevrolet offers the Tahoe in a 4-wheel drive SUV, police pursuit vehicle (PPV) package.

The Police Department has found this specific vehicle to be effective, reliable, and comfortable for all seasons and variable driving conditions in South Lake Tahoe. This vehicle has also been selected and currently driven by the California Highway Patrol. The City’s Motor Pool Department endorses the purchase of this vehicle type and brand for the police patrol division to maintain equipment uniformity in the fleet.

Because of supply chain issues and limited availability of the Chevy Tahoe, the police department has selected the Chevrolet Silverado 4WD PPV to fill other immediate emergency response vehicle needs, with one being outfitted as a K-9 truck and the second for patrol.

The department recommends purchasing these four fully equipped marked police vehicles in an amount up to $422,310.18. This vehicle purchase was done through a formal bid process, as the usual partnerships with cooperative purchasers has not resulted in available patrol cars. The winning bid for these vehicle styles was provided by Michael Hohl Motors in 400
Council Agenda Report- June 20, 2023 Page 2 of 4
Carson City, NV. Equipment purchases are a combination of informal bid and sole source purchase from Lehr, Wattco, Axon, and Walker Telecomm.

Financial Implications: The expense of the vehicle purchases recommended in this staff report will have no impact on the City General fund.

The 2022-2023 Police Department Vehicle Replacement fund has approximately $489,965 available (21102110).

Purchasing Process: Staff recommends purchasing the vehicles through the formal bidding process using PlanetBid as identified in South Lake Tahoe City Code section 3.45.020. In shopping these vehicles, the partner regularly used for cooperative purchase was not able to supply vehicles. The winning bidder for all four discussed vehicles was Michael Hohl Motors in Carson City, NV. The purchase price for two 2023 Chevrolet Tahoe 4WD PPV is $114,959.72. The purchase price for two 2023 Chevrolet Silverado 4WD PPV is $123,848.26.

Staff also recommends the purchase and installation of police equipment to outfit the two Chevrolet Tahoe 4WD PPV from Lehr. This purchase and installation of this equipment is part of a cooperative purchase agreement. The cost of a single build-out from Lehr to supply and install additional police equipment for these two patrol Chevy Tahoe 4WD PPVs is $64,477.56. Lehr has outfitted other cars in our fleet with similar equipment. A uniform patrol car layout is important in a shared fleet.

Staff recommends the purchase and installation of police equipment to outfit the two Chevrolet Silverado 4WD PPV from Wattco. One of these Silverados will be built out as a K9 vehicle. The cost for the K-9 vehicle built out will be $35,101.29. The other Silverado will be built out as a patrol vehicle with a cost of $27,577.73. This purchase is through a cooperative purchase agreement.

Addition equipment not included in the above costs are Axon Fleet in-car cameras and Kenwood radio systems. Each of these purchases is a sole source purchase. The police department will purchase the in-car camera systems (and storage capacity license) for four vehicles at a cost of $43,465.06. The police department will purchase four radio systems from Walker Communications for installation in each of these vehicles. The cost for these four radios is $12,880.56. Axon has previously provided our body worn camera system, our in-car video system, and our digital evidence storage system (for which we are in current contract). This Axon purchase provides uniform equipment installation and deployment across our fleet. Walker Communication has built out the new city-wide radio system and provides handheld and vehicles radio systems for all the city’s emergency response vehicles.

This radio purchase provides uniform and compatible equipment installation across our deployed emergency response fleet.

The total price to purchase these four Chevy 4WD PPVs fully equipped is $422,310.18. This purchase will be facilitated by funds already allocated in account 21102110 46130 and have no impact on the general fund.
401
Council Agenda Report- June 20, 2023 Page 3 of 4
Environmental Considerations: This is not a ‘project’ subject to review under the California Environmental Quality Act (CEQA) under CEQA guidelines section 15378(b)(2) (continuing administrative or maintenance activities, such as purchases for supplies).

Policy Implications: This report considers Climate Action Plan Action Item EV-2 which directs that city fleet vehicles move toward electric vehicles. In conversations with the Sustainability Coordinator we agree that emergency response EVs are not a viable option for emergency response police operations at this time. We have agreed that administrative travel vehicles may be the first practical EV option for the police department. There are several components to address by city action or developing technology before bringing EVs into the emergency response fleet.

Infrastructure: The infrastructure at the Police Department requires major upgrades to support EV emergency response vehicles. These upgrades include building wiring, transformers, meters, and the modifications to install each. Indications from Public Works are that components such as transformers may have a lead time of nearly two years from time of order. Additional infrastructure upgrades include a significantly larger emergency generator to carry that capacity in the event of power loss from the grid. However, consideration for such upgrades were discussed as part of future planning to implement Climate Action Plan Action Item EV-2. These discussions include adoption of EV cars for administrative travel cars, and a onetime build out of the electrical infrastructure upgrades for the police fleet. Surface upgrades may come in phases to include tree removal and carport installation to protect charging infrastructure from the weather. The City’s Sustainability Coordinator plans to release an RFP for Design of EV Charging Stations this summer. This will include the Police Department as the largest, most expensive, and complex site. The Sustainability Coordinator will be working with Liberty Utilities to get this project site on radar for front-of-meter upgrades.

Other considerations are remunerated below and indirectly deal with infrastructure by addressing emergency operations outside normal patrol operations. These other considerations may evaporate in the future as adoption of EV becomes more universal. These infrastructure issues also impact contemporary addition of administrative vehicles.

Fleet Resilience: Emergency operations, such as Caldor, require continuous use with little to no down time for emergency response vehicles. Energy transfer rates (ie, the fill up) for EV require much more down time that energy transfer in ICE emergency response vehicles; however, that difference may diminish in the future as infrastructure for EVs become more universal.

Collisions; damage that may be survivable and/or easily reparable for an ICE emergency response vehicle may be catastrophic for an EV. Sudden loss of a vehicle patrol vehicle may impact normal and emergency police operations with an inordinately delayed replacement.

Interoperability: In response to emergencies within and outside the county, our patrol officers often find themselves assisting other police and fire agencies. The nature of an emergency response requires officer and equipment self-sufficiency and 402
Council Agenda Report- June 20, 2023 Page 4 of 4
compatibility with the infrastructure in the affected or assisted area. The limited range of 100kWh batteries undermines the police department’s ability to respond to assist without consideration for destination infrastructure; a definite impact to our availability for and effectiveness in providing outside assistance.
403
Resolution 2023-XXX June 20, 2023 Page 1 of 2
Resolution 2023-XXX
Adopted by the City of South Lake Tahoe
City Council
June 20, 2023
Police Department Vehicle Replacement

BACKGROUND
A. The City of South Lake Tahoe Police Department needs to continue replacing aging police vehicles.

B. The City of South Lake Tahoe Police Department received funds from California Proposition 172---Safety Sales Tax, a restricted annual funding source used to purchase police vehicles.

C. The Police Department recommends purchasing two (2) 2023 Chevrolet Tahoe 4WD PPV and two (2) Chevrolet Silverado 4WD PPV vehicles to replace aging and high mileage patrol vehicles. Total cost of four vehicles and outfitting is D. In discussion of meeting sustainability goals, the police department has consulted with the Sustainability Coordinator. Two infrastructure needs exist; the infrastructure to be built out at the police department to support charging of an EV emergency response fleet and universal EV infrastructure to support interoperability in emergency response to and from South Lake Tahoe. Until PD electrical infrastructure is built out, emergency response vehicles will need to be replaced with gas powered emergency response vehicles.

BASED ON THE FACTS SET FORTH IN THE BACKGROUND, BE IT RESOLVED, that the City Council of the City of South Lake Tahoe:

1. Authorizes the purchase of two (2) 2023 Chevy Tahoe 4WD PPV police vehicles using existing budget appropriations up to $114,959.72 from Account 21102110 46130 (police vehicle replacement), as follows:
a. Purchase of two (2) 2023 Chevy Tahoe 4WD PPV police vehicles from Michael Hohl Chevrolet. Cost per unit is $57,479.86 for a total cost of $114,959.72. This purchase is through a formal bidding process.
b. Purchase two police equipment/installation packages from Lehr. Cost per unit is $32,238.78 for a total cost of $64,477.56. This purchase is through a cooperative purchasing agreement.

2. Authorizes the purchase of two (2) Chevy Silverado 4WD PPV police vehicles using existing budget appropriations up to $123,848.26 from Account 21102110 46130 (police vehicle replacement).
404
Resolution 2023-XXX June 20, 2023 Page 2 of 2
a. Purchase of two (2) 2023 Chevy Silverado 4WD PPV police vehicles from Michael Hohl Chevrolet. Cost per unit is $61,924.13 for a total cost of $123,848.26. This purchase is through a formal bidding process.
b. Purchase one patrol equipment/installation package from Wattco for a total cost of $27,577.73. This purchase is through a cooperative purchase agreement. c. Purchase of one police K-9 equipment package from Wattco for a total cost of $35,101.29 This purchase is through a cooperative purchase agreement.

3. Authorizes the purchase of additional equipment necessary for emergency response deployment:
a. Purchase four Axon Fleet in-car video systems from Axon. Cost per unit is $10,866.27. The total for four vehicles is $43,465.06. This purchase includes a fiveyear contract. This is a sole source purchase as we have an existing contract for the remainder of the police fleet.
b. Purchase four Kenwood VHF mobile radios from Walker Telecomm, Inc. Cost per unit is $3220.14. The total for four vehicles is $12,880.56. This purchase is a sole source, as Walker Telelcomm is the provider of our emergency radio system-wide upgrade.

4. Total purchases using existing budget appropriations from 21102110 46130 (police vehicle replacement) will be:
a. Vehicles $238,807.98
b. Equipment $127,156.58
c. Cameras/radios $ 56,345.62
d. TOTAL $422,310.18
Adopted by the City of South Lake Tahoe City Council on June 20, 2023 by the following vote:

Yes:

No:

Absent:

Abstain:
________________________ Date:_________
Cristi Creegan, Mayor
Attest:
________________________
Susan Blankenship, City Clerk
The presence of electronic signature certifies that the foregoing is a true and correct copy as approved by the South Lake Tahoe City Council.
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Item No. Description
Manufacturer
Name Quantity Unit Price Total Price
2023 Tahoe Patrol
_____________________________________
Front End Equipment
BK2019TAH21 PB450L4 ALUM BUMPER ION Setina 1 839.25 839.25 CEM16 WeCanX 16 OUTPUT EXPANSION MODULE Whelen 1 166.20 166.20 SA315P SIREN SPEAKER 100W Whelen 1 199.99 199.99
PROMO
SAK70 SA-315 MT KIT 2021-23 CHEVY TAHOE Whelen 1 29.40 29.40 OEM WIG-WAG and Back Flash
I INSTALLATION CHARGES Labor Items 8 115.00 920.00
_____________________________________
Side Equipment
LINSV2B LINZ V-SERIES LED BLUE UNDER SURFACE MT Whelen 1 175.80 175.80 LINSV2R LINZ V-SERIES LED RED UNDER SURFACE MT Whelen 1 175.80 175.80 LSVBKT54 LINSV MIRROR MT KIT 2021 TAHOE Whelen 1 19.80 19.80 ARG54P PASS FENDER MT 2021 TAHOE Whelen 1 65.40 65.40
ARG54D DRVR FENDER MT 2021 TAHOE Whelen 1 65.40 65.40
ARGES2 ARGES PROFOCUS REMOTE SPOTLIGHT Whelen 2 520.20 1,040.40 I INSTALLATION CHARGES Labor Items 6 115.00 690.00
_____________________________________
Roof Equipment
BB2DEDE-LEHR 54" LIBERTY II DUO WCX Whelen 1 2,199.00 2,199.00 PROMO
STPKT101 STRAP KIT SILVERADO 1500 2019-2020 Whelen 1 69.00 69.00 NMO-K-DS COAX CABLE Misc Radio Parts 2 34.87 69.74
PROMO
PWAT328TWSHKGCPLEHR PANORAMA IBR900 ANTENNA SHARKEE GCP Panorama 1 299.25 299.25 Page:

Document Date:

Quote Number:

Sales Quote
To:

Ship
SalesPerson
Ship Via Customer ID
To:

Sell
39877
Steve Adair
62850
Phone: 800-982-8468
South Lake Tahoe, CA 96150
1700 D Street
Matt Morisson
South Lake Tahoe-Motor Pool
Phone:

So Lake Tahoe, CA 96150-6325
1901 Airport Road Suite 210
Matt Morisson
City of South Lake Tahoe
Phone: 775-507-2460 Fax:
9240 Prototype Dr Reno, NV 89521
2/24/2023
1 Tax Ident. Type Legal Entity
Vehicle Information:

Terms: Net 30
Payment Method:

PRICES ARE VALID FOR 30 DAYS FROM DATE OF QUOTE UNLESS OTHERWISE SPECIFIED Campaign No.
437
Item No. Description
Manufacturer
Name Quantity Unit Price Total Price
Confirm Radio's and number of antennas
I INSTALLATION CHARGES Labor Items 3.25 115.00 373.75
_____________________________________
Drivers Compartment
C-VS-1012-TAH-1 22" CHEVY TAHOE 2021+ CONSOLE VEHICLE SPECIFIC Havis 1 546.00 546.00 C-EB40-CCS-1P FACE PLATE 1 PC 4" Havis 1
C-EB30-APR-1P FACE PLATE 3" 1 PC MOT APX-4500 Havis 1
C-FP-3 FACE PLATE 3" Havis 1
10" of slanted Console used
C-AP-0325 ACCY BOX 3" Havis 1 35.70 35.70
C-EB40-WSB-1P FACE PLATE 4" WHELEN ARGES REMOTE SPOTLIGHT Havis 1 C-FP-1 FACE PLATE 1" Havis 1
CUP2-1001 SELF-ADJUSTING DOUBLE CUP HOLDER 4" Havis 1 46.90 46.90 C-USB-3 USB-C & USB TYPE A DUAL PORT CHARGER Havis 2 69.30 138.60 12" of flate console space used
C-ARM-103 TOP MOUNT ARMREST LG FLIP UP PAD Havis 1 110.80 110.80 C-DMM-3119 HEAVY-DUTY DASH MOUNT FOR 2021-2023 CHEVY TAHOE Havis 1 361.90 361.90 C-KBM-202 RUGGED KEYBOARD MNT ADAPTER COMBO Havis 1 118.30 118.30 IK-TR-911-RED IKEY FULL TRAVEL KEYBOARD iKey 1 346.50 346.50 PKG-MD-ARM-0306 SWIVEL ARM & SIDE POLE MOUNTS WITH 3" BASE, 6"

EXTENSION
Havis 1 237.30 237.30
CF-33SZ-0GKM PANASONIC : PUBLIC SECTOR SPECIFIC Panasonic 1 4,985.00 4,985.00 DS-PAN-1201-2 HAVIS DOCK FOR PANASONIC CF-33 TABLET ONLY Havis 1 822.50 822.50 LPS-103 POWER SUPPLY FOR PANASONIC DS-PAN-1110 & DS-PAN1200 SERIES DOCKS Havis 1 182.70 182.70 G-BOM621-A BLACKOUT MODULE 2021 CHEVY TAHOE (PPV, SSV, U.S.

VEHICLES ONLY)
Intermotive 1 407.82 407.82
Page:

Document Date:

Quote Number:

Sales Quote
To:

Ship
SalesPerson
Ship Via Customer ID
To:

Sell
39877
Steve Adair
62850
Phone: 800-982-8468
South Lake Tahoe, CA 96150
1700 D Street
Matt Morisson
South Lake Tahoe-Motor Pool
Phone:

So Lake Tahoe, CA 96150-6325
1901 Airport Road Suite 210
Matt Morisson
City of South Lake Tahoe
Phone: 775-507-2460 Fax:
9240 Prototype Dr Reno, NV 89521
2/24/2023
2 Tax Ident. Type Legal Entity
Vehicle Information:

Terms: Net 30
Payment Method:

PRICES ARE VALID FOR 30 DAYS FROM DATE OF QUOTE UNLESS OTHERWISE SPECIFIED Campaign No.
438
Item No. Description
Manufacturer
Name Quantity Unit Price Total Price
G-PIO601-A PROTECTED IDLE OUTPUT, SECURES GUNLOCK AND HATCH, 2021 TAHOE
Intermotive 1 264.14 264.14
GK11191B1S DUAL T-RAIL GUN MT 1 BLAC-RAC LOCK/1 SHOTGUN LOCK Setina 1 689.25 689.25 60CREGCS 12V WHT/RED 6" COMPARTMENT LT Whelen 1 146.40 146.40 MMSU-1 MAGNETIC MIC KIT Magnetic Mic 2 39.95 79.90
I INSTALLATION CHARGES Labor Items 22.5 115.00 2,587.50 _____________________________________
Prisoner Compartment
PK0419TAH21 #10VS C RP COATED POLY PARTITION Setina 1 786.75 786.75 PK0123TAH212ND #12VS 2ND EXPANDED METAL PARTITION Setina 1 434.25 434.25 WK0514TAH21 WINDOW BARS STEEL VERTICAL Setina 1 239.25 239.25 DK0100TAH21 TPO DOOR PANELS BLK, Tahoe 2021+ Setina 1 231.75 231.75 QK1374TAH21 FULL TRANSPORT REPLACEMENT SEAT 21 TAHOE Setina 1 809.25 809.25 I INSTALLATION CHARGES Labor Items 7.5 115.00 862.50
_____________________________________
Back End Equipment
TLIB ION T-SERIES LINEAR SUPER-LED, BLUE Whelen 1 97.80 97.80 TLIR ION T-SERIES LINEAR SUPER-LED, RED Whelen 1 97.80 97.80 TIONWEDG MOUNTING WEDGES ION T-SERIES Whelen 2 13.20 26.40 Mounted exterior by license plate visable when hatch is open IONBKT1 ION LICENSE PLATE BKT HORIZ Whelen 1 25.20 25.20 IONR ION SERIES LED LIGHTHEAD- RED Whelen 1 100.80 100.80 IONB ION SERIES LED LIGHTHEAD- BLUE Whelen 1 100.80 100.80 License plate lights with bracket
60CREGCS 12V WHT/RED 6" COMPARTMENT LT Whelen 1 146.40 146.40 Rear Hatch Dome Light
DC-5E8Q-25BLMB 25' CAT 5 CABLE Misc Parts 1 18.99 18.99 Page:

Document Date:

Quote Number:

Sales Quote
To:

Ship
SalesPerson
Ship Via Customer ID
To:

Sell
39877
Steve Adair
62850
Phone: 800-982-8468
South Lake Tahoe, CA 96150
1700 D Street
Matt Morisson
South Lake Tahoe-Motor Pool
Phone:

So Lake Tahoe, CA 96150-6325
1901 Airport Road Suite 210
Matt Morisson
City of South Lake Tahoe
Phone: 775-507-2460 Fax:
9240 Prototype Dr Reno, NV 89521
2/24/2023
3 Tax Ident. Type Legal Entity
Vehicle Information:

Terms: Net 30
Payment Method:

PRICES ARE VALID FOR 30 DAYS FROM DATE OF QUOTE UNLESS OTHERWISE SPECIFIED Campaign No.
439
Item No. Description
Manufacturer
Name Quantity Unit Price Total Price
HKN6169B 17' CONTROL HEAD CABLE REMOTE XTL RADIO Misc Radio Parts 1 85.67 85.67 WH3 AFS CORE TAHOE Harness Service Items 1 1,399.00 1,399.00 I INSTALLATION CHARGES Labor Items 16.5 115.00 1,897.50 F Shipping Charges Service Items 1 375.00 375.00
INSTALL INSTALL MATERIALS Service Items 1 375.00 375.00 _____________________________________
NPN 329-470350200-7033-000-01 Service Items 1 1,860.93 1,860.93 NPN 235-01 Service Items 1 198.60 198.60
128,955.12
2563.75
29,675.03
Total for Four Vehicles
Total Sales Tax Per Veh
Subtotal Per Veh
375.00
29300.03
Amount Exempt from Sales Tax
Amount Subject to Sales Tax
Name: __________________________________________________ Auth. Signature: ________________________________________ Agency Approval
PLEASE READ: No returns without approval and an RMA# will be accepted. All shortages, damage, or return claims must be made within 10 days of invoice date. NO EXCEPTIONS. A copy of the invoice and RMA paperwork must be shipped with returns. All return orders or cancellations are subject to a 25% restocking fee plus freight. Any change orders made 60 days prior to the installation date may be subject to a production delay and pricing changes. PRICES ARE SUBJECT TO CHANGE WITHOUT NOTICE.

Page:

Document Date:

Quote Number:

Sales Quote
To:

Ship
SalesPerson
Ship Via Customer ID
To:

Sell
39877
Steve Adair
62850
Phone: 800-982-8468
South Lake Tahoe, CA 96150
1700 D Street
Matt Morisson
South Lake Tahoe-Motor Pool
Phone:

So Lake Tahoe, CA 96150-6325
1901 Airport Road Suite 210
Matt Morisson
City of South Lake Tahoe
Phone: 775-507-2460 Fax:
9240 Prototype Dr Reno, NV 89521
2/24/2023
4 Tax Ident. Type Legal Entity
Vehicle Information:

Terms: Net 30
Payment Method:

PRICES ARE VALID FOR 30 DAYS FROM DATE OF QUOTE UNLESS OTHERWISE SPECIFIED Campaign No.
440

E S T I M A T E
2230 Cordelia Rd. Fairfield, CA 94534 Date Reference #
Phone: 707-435-9233 Fax: 707-435-1941
Email: [email protected] 05/31/23 AAAQ17929
Fed ID # 01-0627221 DUNS # 068678015
CUSTOMER: SHIP TO:

South Lake Tahoe Police Department South Lake Tahoe Police Department Jeff Roberson Jeff Roberson
1352 Johnson Blvd. South Lake Tahoe, CA 96150-8217
United States
1352 Johnson Blvd. South Lake Tahoe, CA 96150-8217
United States
Phone: (530) 542-6131 Phone: (530) 542-6131
Fax: (530) 542-6146 Fax: (530) 542-6146
Cell: (530) 318-8241
E-Mail: [email protected]
Account Rep P.O. Number Ship Via Terms
Vic Geis Best Way Net 30
Qty Part # Description Unit Price Ext. Price
2023 Chevy Silverado PPV #1 - Patrol
Lightbar, Siren & Speaker Pkg
1 BB2DEDE Liberty II Duo Fully Loaded $3,371.30 $3,371.30 1 MKAJ101 ADJ LIGHTBAR MOUNT KIT #101
1 C399 CENCOM CORE WCX CONTROL CENTER
1 CCTL6 WeCanX KNOB/SLIDE CONTROL HEAD
1 C399K9 OBD II CANPORT KIT 2022 GM (Note, not yet tested for 2023 model) 1 CEM16 WeCanX 16 OUTPUT EXPANSION MOD $207.75 $207.75
1 SA315P SA315P SPEAKER, BLACK PLASTIC $211.14 $211.14
1 SAK65 SA-315 MT KIT 2019 SILVERADO
Front Warning Lights
See Setina Bumper for (4) Trio ION Lights (R/B/W)
Side Warning Lights
1 IONV3R ION V-SERIES LIGHT RED/BLK HSG $242.25 $242.25 1 IONV3B ION V-SERIES LIGHT BLU/BLK HSG $242.25 $242.25 2 IONBKT5 ION REVERSED UNIVERSAL MT $13.50 $27.00
Rear Warning Lights - One pair upper tailgate for mid-level warning, one pair near license plate for lower level warning 2 TLI2K ION T-SERIES LINEAR DUO R/A $85.00 $170.00
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Qty Part # Description Unit Price Ext. Price
2 TLI2M ION T-SERIES LINEAR DUO B/A $85.00 $170.00
Interior Lighting
2 60CREGCS 12V WHT/RED 6" COMPARTMENT LT $183.00 $366.00 Spot Light Replacement Bulbs
2 P46SC PAR-46 SUPER-LED SPOT LT 12V $223.50 $447.00
Console & Computer Mount
1 C-VSW-2600-SILV Wide Flat 26" Vehicle-Specific Console For 2019-2023 Chevrolet Silverado $684.87 $684.87 and GMC Sierra
1 C-EB40-CCS-1P 1-Piece Equipment Mounting Bracket, 4" Mounting Space, Fits Whelen Cencom CCSRN, CCSRNTA, MPC03
1 C-EB30-APR-1P 1-Piece Equipment Mounting Bracket, 3" Mounting Space, Fits Motorola APX-4500, Remote Radio
1 C-AP-0325 3" Accessory Pocket, 2.5" Deep $51.75 $51.75 1 CUP2-1001 Internal Cup Holders $50.25 $50.25
1 C-USB-3 USB-C & USB Type A Dual Port Charger $74.25 $74.25 1 C-ARM-103 Armrest For Top Mount, Console, Large Pad $136.50 $136.50 1 C-APW-1390 13" Accessory Pocket, 9." Deep For 3.3"W Section Of Wide Consoles $63.00 $63.00 1 C-DMM-3107 Heavy-Duty Dash Mount For 2019-2023 Chevrolet Silverado / GMC Sierra $438.75 $438.75 1500
1 PKG-MD-ARM-0603 Package - Swivel Arm & Side Pole Mounts With 6" Base, 3" Extension $254.25 $254.25 1 C-MD-204 Low Profile Tilt Swivel Motion Device $69.75 $69.75 1 PKG-KB-205 Havis Chiclet Keyboard and Keyboard Mount System $657.75 $657.75 1 DS-PAN-1201-2 Docking Station For Panasonic TOUGHBOOK 33 Tablet Only $881.25 $881.25 1 LPS-103 Power Supply for use with Panasonic DS-PAN-1110 and DS-PAN-1200 Series $195.75 $195.75 Docking Stations
2 MMSU-1 Magnetic Mic Single Unit - 1 Conversion Kit $39.95 $79.90 Push Bumper & Fender Wraps
1 BK2019CHT191500 $895.20 $895.20
PB8
PB450L4 Aluminum Bumper ION
1 HK0809CHT191500 PB8 Headlight Guard Double Loop $343.20 $343.20 Front Partition
1 PK0355CHT191500 #10VS RP Coated Poly Partition $799.20 $799.20 Weapons Rack
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Qty Part # Description Unit Price Ext. Price
1 GK11191B1SHKSS $671.20 $671.20
CA
Dual T-Rail Mount
1 Small with Handcuff Key Override
1 1082E Blac-Rac, Trigger Guard and Receiver
***NEW COLD WIRE TECHNOLOGY INCLUDED*** SOLD SEPARATELY Momentary Switch, Required if NOT wiring into Smart Siren Controller Rear Partition & Prisoner Seat
None available for this vehicle
Door Panels (Window Barriers Not Available For This Vehicle) 1 DK0598CHT191500 Door Panel $175.20 $175.20
Aluminum
Replaces OEM Door Panels
Rear Storage (Truck Bed)
1 DG6 DECKED Drawer System Chevy Silverado 1500 2019 New Body Style-Current $1,304.10 $1,304.10 / 5' 9"
1 DB270 DIAMONDBACK 270 ALL-NEW 2019–2023 | CHEVY | SILVERADO 1500 | $2,399.00 $2,399.00 5'10" BED
Install Supplies
1 7721-BSS Blue Sea 7721 MEGA AMG Safety Fuse Block $32.99 $32.99 2 5032-BSS Blue Sea 5032 12 Circuit Split Bus Fuse Block with Ground and Cover $57.19 $114.38 1 090-0120-0 Waterproof Circuit Breakers - 120A, WBS-120 $47.52 $47.52 1 83-0115 Single Entry Cable Seal with Heatshrink Gasket Assembly L: 1.25" ID" 0.75", $38.07 $38.07 Hole: 1"
1 Install Kit Misc shop supplies $135.00 $135.00
1 LABOR Install the above equipment and any agreed upon customer supplied parts. $8,437.50 $8,437.50 SubTotal $24,485.27
Sales Tax $2,142.46
Shipping $950.00
Total $27,577.73
Prices are valid for 30 days from date of quote unless otherwise specified PLEASE READ: THIS INVOICE MAY BE FOR SHIPMENT OF A PARTIAL ORDER-NO RETURNS ON PLASTIC PARTS OR CUSTOM ORDERED NON-STOCK PARTS-NO RETURNS WITHOUT APPROVAL AND AN RMA# WILL BE ACCEPTED! ALL SHORTAGES, DAMAGE OR RETURN CLAIMS MUST BE MADE WITHIN 10 DAYS OF INVOICE DATE. NO EXCEPTIONS. A COPY OF THE INVOICE AND RMA PAPERWORK MUST BE SHIPPED WITH RETURNS AND ALL RETURNS MUST HAVE AUTHORIZATION. ALL RETURNS ARE SUBJECT TO A 30% RESTOCKING FEE. INTEREST WILL BE CHARGED AT A RATE OF 1.5% EACH MONTH ON ACCOUNTS OVER 30 DAYS. PRICES ARE SUBJECT TO CHANGE WITHOUT NOTICE. PLEASE REMIT PLEASE REMIT PAYMENT TO: PO BOX 2460 - SUISUN CITY, CA 94585 Interest will be charged at the rate of 1 1/2% each month on accounts over 30 days. 06/05/23 Representing the Highest Quality Emergency Equipment Companies in the World Page 3 of 3 3 of 3
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South Lake Tahoe City CouncilJune 20, 2023

South Lake Tahoe City Council
June 20, 2023