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HomeMy WebLinkAbout2020 CON Disposition & Development - Kimball Highland Master PlanDISPOSITION AND DEVELOPMENT AGREEMENT (Kimball Highland Master Plan) THIS DISPOSITION AND DEVELOPMENT AGREEMENT ("Agreement") is dated as of the 20th day of October, .2020 by and among the Community Development Commission - Housing Authority of the City of National City ("CDC -HA"), Centro De Salud De La Comunidad De San Ysidro, Inc., dba San Ysidro Health (the "Health Center Developer"), and Community HousingWorks, a California nonprofit public benefit corporation (the "Affordable Housing Developer"). RECITALS A. The Affordable Housing Developer has entered into that certain Purchase and Sale Agreement for Site 1 and intends to transfer Site 1 to its affiliate ("Site 1 Owner"). The Site 1 Owner shall construct the Phase 1 Project, as defined below, on Site 1. B. The CDC -HA owns Site 2 and the CDC -HA desires to ground lease Site 2 to the Affordable Housing Developer's affiliate ("Site 2 Owner") and the Affordable Housing Developer desires for its affiliate, the Site 2 Owner, to lease Site 2 from CDC -HA pursuant to the Ground Lease, as defined below. The Site 2 Owner shall construct the Phase 2 Project on Site 2. Provided, however, it is anticipated that Site 1 Owner and Site 2 Owner will be the same entity and that the Phase 1 Project and the Phase 2 Project will be one and the same project. C. The CDC -HA owns that certain Public Right of Way located at Kimball Way as shown on the Parcel Map ("Kimball Public Right of Way"). The CDC -HA desires to sell fee simple title to the Kimball Public Right of Way to the Health Center Developer pursuant to Health and Safety Code Section 34312.3(b), as set forth herein. The Affordable Housing Developer entered into that certain Purchase and Sale Agreement with Patricia L. Peterson, Trustee of the L.O. Lindemulder Trust No. 1, and Patricia L. Peterson, and Mary M. Peterson, Co -Trustee of the Peterson Family Trust B dated July 1, 1980 (collectively, "Seller") pursuant to which the Affordable Housing Developer intends to acquire that certain real property identified as APNs 560-410-03, 560-050-06, 560-050-12 and 505-050-10 on the Parcel Map (collectively, the "Peterson Property"). Prior to or concurrently with the closing of Affordable Housing Developer's acquisition of the Peterson Property from Seller, the Affordable Housing Developer desires to sell fee simple title to that certain real property and improvements identified as all of APN 560-410- 03, and portions of APN 560-050-06 and 560-050-12 to Health Center Developer contingent upon the successful negotiation and execution of a purchase and sales agreement between the two parties. The Kimball Public Right of Way and APN 560-410-03, and the portions of APN 560- 050-06 and 560-050-12 are defined herein collectively as Site 3. The Health Center Developer shall construct the Phase 3 Project, as defined below, on Site 3. . D. The CDC -HA shall provide subordinate mortgage loans in the aggregate amount of up to the CDC -HA Loan Amount to Site 1 Owner and/or Site 2 Owner to finance the acquisition, construction and development of the Phase 1 Project, and the .Phase 2 Project, as applicable. Provided, however, it is anticipated that Site 1 Owner and Site 2 Owner will be the same entity and that the Phase 1 Project and the Phase 2 Project will be one and the same project. Page 2 of 61 E. The CDC -HA, Affordable Housing Developer and Health Center Developer are all of the parties to that certain Exclusive Negotiation Agreement (D Avenue: Mixed -Use Master Plan) by and among Housing Authority, Developer and Health Center Developer, dated as of . November 19, 2019 (as amended, the "ENA"). This Agreement supersedes the ENA in its entirety. NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, CDC -HA, Health Center Developer and Affordable Housing Developer hereby agree as follows: 100. Definitions. "Affordable Housing Developer" means Community HousingWorks. Where the term Affordable Housing Developer is used herein, such term shall include any permitted nominee, assignee or successor in interest as herein provided. "Affordable Units" means collectively, the one hundred and forty-five (145) rental dwelling units in the Phase 1 Project and Phase 2 Project, whose occupancy, for a period of fifty- five years after the Closing, shall be restricted to Extremely Low Income Households, Very Low Income Households, and Low Income Households and whose monthly rental rates are restricted to the Maximum Rents pursuant to, and as set forth in more detail in, the Declaration. In addition, there will be one (1) manager's unit in the Phase 1 Project and one (1) manager's unit in the Phase 2 Project; provided, however, it is agreed to and understood by the parties that final unit counts for each of Phase 1 Project and Phase 2 Project shall be determined based on the requirements of the. available financing sources and the Final Project Budget, each as approved by the Executive Director of the CDC -HA in its reasonable discretion. "Agreement" means this Disposition and Development Agreement among CDC -HA, Health Center Developer and Affordable Housing Developer. "Area Median Income" shall mean the area median income defined by the Department of Housing and Urban Development (HUD), and published by the California Tax Credit Allocation Committee (TCAC), as the then current area median income for the San Diego -Carlsbad Metropolitan Statistical Area, established periodically by HUD and published in the Federal Register, as adjusted for family size. In the event HUD and/or TCAC ceases to publish an established area median income as aforesaid, CDC -HA may, in its sole discretion, use any other reasonably comparable method of computing area median income. "CDC -HA" means the Community Development Commission -Housing Authority of the City of National City. "CDC -HA Loan Amount" means the amount of the loan from the CDC -HA to Site 1 Owner and/or Site 2 Owner to finance the acquisition, construction and development of the Phase 1 Project, and the Phase 2 Project. The baseline aggregate CDC -HA Loan Amount is up to $10,475,000.00; provided, however, the aggregate CDC -HA Loan Amount may be increased to $11,662,000.00 upon delivery by the Affordable Housing Developer to the CDC -HA of evidence Page 3 of 61 which is sufficient to demonstrate that the other financing sources for the Phase 1 Project and the Phase 2 Project are insufficient to construct the Phase 1 Project and the Phase 2 Project, as determined in the sole discretion of the Executive Director of the CDC -HA. Notwithstanding the foregoing, the Affordable Housing Developer intends to sell a portion of Site 1 to the Health Center Developer. All proceeds from any sale of any portion of the Peterson Property, Site 1 and any adjoining rights of way shall immediately be used to pay down the CDC -HA Loan Amount. "City" means the City of National City, a California municipal corporation. "Closing" means with respect to each of the Phase 1 Project, the Phase 2 Project and the Phase 3 Project, the close of Escrow for the financing for acquisition and construction of the Phase 1 Project, the Phase 2 Project and the Phase 3 Project respectively; provided, however, the parties hereto agree and acknowledge that the Closing for the Phase 1 Project, the Closing for the Phase 2 Project, and the Closing for the Phase 3 Project may, but do not need to occur concurrently, and may incur independent of each other. "Closing Deadline for the Phase 1 Project" means December 31, 2023; provided, however, in the event the Affordable Housing Developer is not then in default under this Agreement, the Closing Deadline for the Phase 1 Project may be extended at the election of the Affordable Housing Developer in its sole discretion to December 31, 2025. "Closing Deadline for the Phase 2 Project" means December 31, 2023; provided, however, in the event the Affordable Housing Developer is not then in default under this Agreement, the Closing Deadline for the Phase 2 Project may be extended at the election of Affordable Housing Developer in its sole discretion to December 31, 2025. "Closing Deadline for the Phase 3 Project" means December 31, 2023; provided, however, in the event the Health Center Developer is not then in default under this Agreement, the Closing Deadline for the Phase 3 Project may be extended at the election of the Health Center Developer in its sole discretion to December 31, 2025. "Construction Deed of Trust" means the deed of trust recorded against Site 1 and/or Site 2, as applicable, for purposes of obtaining senior construction financing for the Phase 1 Project and the Phase 2 Project respectively. The Construction Deed of Trust relating to Phase 2 Project shall be recorded against the Site 2 Owner's leasehold interest in Site 2 only. Recordation of any deed of trust, mortgage or other instrument against the fee interest on Site 2 shall be a default under this Agreement, the Ground Lease, the Site 2 Declaration and the Developer Deed of Trust on Site 2. "Declaration" shall mean each of the two (2) declarations of covenants, conditions and restrictions in forms agreed to by the CDC -HA and the Site 1 Owner or Site 2 Owner, as applicable, to be executed by the Site 1 Owner and recorded against Site 1 or by the Site 2 Owner and recorded against the Site 2 Owner's leasehold interest on Site 2, as applicable, at the Closings for each of the Phase 1 Project and the Phase 2 Project. Provided, however, it is anticipated that the Phase 1 Project and the Phase 2 Project will be one and the same project. In such event there shall be only one (1) Declaration. Page 4 of 61 "Default" means the failure of a party to perform any action or covenant required by this Agreement within the time periods provided herein following notice and opportunity to cure, as set forth in Section 501 hereof "Developer Deed of Trust" means each of the two (2) subordinate deeds of trust, in forms agreed to by the CDC -HA and the Site 1 Owner or Site 2 Owner, as applicable, to be executed by the Site 1 Owner and recorded against Site 1 or by the Site 2 Owner and recorded against the Site 2 Owner's leasehold interest on Site 2, as applicable, at the Closings for each of the Phase 1 Project and the Phase 2 Project. Provided, however, it is anticipated that the Phase 1 Project and the Phase 2 Project will be one and the same project. In such event there shall be only one (1) Developer Deed of Trust. Provided all conditions of this Agreement are satisfied by the Closing Deadline for the Phase 1 Project or the Closing Deadline for the Phase 2 Project, as applicable, which may or may not occur concurrently, each Affordable Housing Developer Deed of Trust shall be subordinated to the Construction Deed of Trust and Permanent Deed of Trust. Any such subordination shall be in a form acceptable to the CDC -HA in its reasonable discretion. Additionally, the Affordable Housing Developer Deed of Trust securing Site 1 and the Affordable Housing Developer Deed of Trust securing Site 2 shall not be crossed collateralized or crossed defaulted without the consent of any senior lender and any tax credit investor limited partner of Owner. Nothing contained in this definition shall be deemed or construed as applicable to Site 3, more specifically identified as the Phase 3 Project, which shall be owned, developed and operated by Health Center Developer pursuant the fee simple transfer under the Health Center Purchase Agreement). "Environmental Indemnity" shall mean each of the two (2) unsecured environmental indemnity agreements (one for the Phase 1 Project and another for the Phase 2 Project), in forms agreed to by the CDC -HA and the Site 1 Owner or Site 2 Owner, as applicable, to be executed by the CDC -HA and the Site 1 Owner or Site 2 Owner, as applicable, at the Closings for each of the Phase 1 Project and the Phase 2 Project. Provided, however, it is anticipated that the Phase 1 Project and the Phase 2 Project will be one and the same project. In such event there shall be only one (1) Environmental Indemnity. "Escrow" means the escrow depository and disbursement services to be performed by Escrow Agent pursuant to the provisions of this Agreement. "Escrow Agent" means Stewart Title Company or another title insurance company mutually selected by the parties hereto. "Escrow Instructions" shall mean each of the: (i) escrow instructions (one for Site 1 and another for Site 2) to be executed by the CDC -HA and the Site 1 Owner or Site 2 Owner, as applicable, at the Closings for each of the Phase 1 Project and the Phase 2 Project (provided, however, it is anticipated that the Phase 1 Project and the Phase 2 Project will be one and the same project. In such event there shall be only one (1) set of Escrow Instructions governing both the Phase 1 and Phase 2 Project); or (ii) escrow instructions to be executed by the CDC -HA and the Health Center Developer at the Closing for the Phase 3 Project. Page 5 of 61 "Extremely Low Income Household" means persons and families whose income does not exceed thirty percent (30%) of the then current Area Median Income, provided that such persons or families meet the additional requirements set forth in the Declaration. "Final Project Budget" has the meaning set forth in Section 305.2. "Governmental Requirements" means all laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the state, the county, the City, or any other political subdivision in which the Property is located, and of any other political subdivision, agency or instrumentality exercising jurisdiction over CDC -HA, Affordable Housing Developer or the Property. "Ground Lease" means the 65-year ground lease for Site 2, in a form agreed to by the CDC - HA and the Site 2 Owner, to be executed by Site 2 Owner and recorded against Site 2, at the Closing for the Phase 2 Project. "Hazardous Materials" means any hazardous or toxic substance, material or waste which is or becomes regulated by any local governmental authority, the State of California or the United State Government. Provided, however, the term "Hazardous Materials" shall not include substances typically used in the ordinary course of developing, operating and maintaining apartment complexes in California, or used in the ordinary course of the operation of healthcare facilities; or small amounts of chemicals, cleaning agents and the like commonly employed in routine household uses in a manner typical of occupants in other similar properties, provided that such substances are used in compliance with applicable laws. "Initial Project Budget" means the proforma budget attached hereto as Exhibit B and as further set forth in Section 305.1. "Leasehold" means the ground lease interest in Site 2 created by the Ground Lease. "Low Income Household" means persons and families whose income does not exceed eighty percent (80%) of the then current Area Median Income, provided that such persons or families meet the additional requirements set forth in the Declaration. "Master Plan" shall mean the Phase 1 Project, the Phase 2 Project, the Phase 3 Project and such other additional roads, right of way, or improvements within the planned development contemplated under this Agreement. "Maximum Rents" shall mean the maximum amount of consideration, of any kind whatsoever, that the Affordable Housing Developer may receive for any Affordable Unit, which monthly amount shall not exceed the product of one twelfth (1/12) of (i) thirtypercent (30%) times thirty percent (30%) of the then Area Median Income as adjusted for household size appropriate for the unit with respect to the Extremely Low Income Units, (ii) thirty percent (30%) of fifty percent (50%) of the then Area Median Income as adjusted for household size appropriate_ for the unit with respect to the Very Low Income Units, (iii) thirty percent (30%) of sixty percent (60%) of the then Area Median Income as adjusted for household size appropriate for the unit with respect Page 6 of 61 to the Low Income Units, or (iv) thirty percent (30%) of eighty percent (80%) of the then Area Median Income as adjusted for household size appropriate for the unit with respect to the Low Income Unit. Maximum Rents and associated Area Median Income levels may be adjusted pursuant to the requirements of project financing sources. "Owner" shall mean Site 1 Owner, Site 2 Owner or Health Center Developer, as applicable. "Permanent Deed of Trust" means the deed of trust recorded against Site 1 or Site 2, as applicable, for purposes of obtaining senior permanent financing for the Phase 1 Project or the Phase 2 Project respectively. The Permanent Deed of Trust relating to the Phase 2 Project shall be recorded against the Affordable Housing Developer's leasehold interest on Site 2 only. Recordation of any deed of trust, mortgage or other instrument securing or evidencing the fee interest in Site 2 shall be a default under this Agreement, the Ground Lease, the Site 2 Declaration and the Developer Deed of Trust on Site 2. "Permitted Transfer" is defined in Section 603.2, below. "Phase 1 Project" means an approximately.85-unit affordable housing project, parking for the affordable housing project and off -site improvements to be constructed on Site 1 by the Site 1 Owner; notwithstanding the foregoing, the parties acknowledge and agree that fmal unit count at Phase 1 Project may be adjusted by the Affordable Housing Developer, with the written consent of the Executive Director of the CDC -HA, based on the requirements of the available financing sources and financial feasibility. Provided, however, it is anticipated that the Phase 1 Project and the Phase 2 Project will be one and the same project. "Phase 1 Project Deed of Trust" means the Developer Deed of Trust to be recorded against Site 1. Provided, however, it is anticipated that the Phase 1 Project and the Phase 2 Project will be one and the same project. In such event there shall be only one (1) Developer Deed of Trust which will constitute both the Phase 1 Project Deed of Trust and the Phase 2 Project Deed of Trust. "Phase 1 Project Note" means the promissory note in a form agreed to by the Affordable Housing Developer and CDC -HA, to be executed by the Affordable Housing Developer at the Closing for the Phase 1 Project, evidencing the loan from CDC -HA to the. Affordable Housing Developer. Provided, however, it is anticipated that the Phase 1 Project and the Phase 2 Project will be one and the same project. In such event there shall be only one (1) promissory note which will constitute both the Phase 1 Project Note and the Phase 2 Project Note. "Phase 2 Project" mean an approximately 60-unit affordable housing project, Senior Center, and parking to be constructed on -the leasehold interest in Site 2 by the Site 2 Owner; notwithstanding the foregoing, the parties acknowledge and agree that final unit count at Phase 2 Project may be adjusted by the Affordable Housing Developer, with the written consent of the Executive Director of the CDC -HA, based on the requirements of the available fmancing sources and financial feasibility. Provided, however, it is anticipated that the Phase 1 Project and the Phase 2 Project will be one and the same project Page 7 of 61' "Phase 2 Project Deed of Trust" means the Developer Deed of Trust to be recorded against Site 2. Provided, however, it is anticipated that the Phase 2 Project and the Phase 2 Project will be one and the same project. In such event there shall be only one (1) Developer Deed of Trust which will constitute both the Phase 1 Project Deed of Trust and the Phase 2 Project Deed of Trust. "Phase 2 Project Note" means the promissory note in a form agreed to by the Affordable Housing Developer and CDC -HA, to be executed by the Affordable Housing Developer at the Closing for the Phase 2 Project evidencing the loan from CDC -HA to the Affordable Housing Developer. Provided, however, it is anticipated that. the Phase 1 Project and the Phase 2 Project will be one and the same project. In such event there shall be only one (1) promissory note which will constitute both the Phase 1 Project Note and the Phase 2 Project Note. "Phase 3 Project" means the Program of All -Inclusive Care for the Elderly Clinic and Federally Qualified Health Center to be developed by Health Center Developer on Health Center Site, parking for the Program of All -Inclusive Care for the Elderly Clinic and Federally Qualified Health Center, the street vacation and creation of a cul-de-sac at Kimball Way all to be constructed on Site 3. "Project Budget" means the Phase 1 Initial Project Budget or Final Project Budget or the Phase 2 Initial Project Budget or Final Project Budget, as applicable. Provided, however, it is anticipated that the Phase 1 Project and the Phase 2 Project will be one and the same project. In such event there shall be only one (1) Project Budget. "Project Design and Plan" means the design and plan for each of Phase 1 Project, Phase 2 Project or Phase 3 Project, as applicable, which shall set forth the design, plan and construction work, including without limitation, landscaping, flatwork and similar work, to be done with respect to the Phase 1 Project, Phase 2 Project or the Phase 3 Project respectively, each of which shall be subject to the approval of the Executive Director of the CDC -HA, which approval shall not be unreasonably withheld, conditioned or delayed. Provided, however, it is anticipated that the Phase 1 Project and the Phase 2 Project will be one and the same project. In such event there shall be one (1) Project Design and Plan which will constitute the design and plan for both the Phase 1 Project and the Phase 2 Project. "Security Agreement" shall mean each of the two (2) security agreements (one for the. Phase 1 Project and another for the Phase 2 Project), in forms agreed to by the CDC -HA and the Site 1 Owner or Site 2 Owner, as applicable, to be executed by the CDC -HA and the Site 1 Owner or Site 2 Owner, as applicable, at the Closings for each of the Phase 1 Project and the Phase 2 Project. Provided, however, it is anticipated that the Phase 1 Project and the Phase 2 Project will be one and the same project. In such event there shall be only one (1) Security Agreement which will constitute the security agreement for both the Phase 1 Project and the Phase 2 Project. Page 8 of 61 "Senior Center" shall mean a commercial space located at the Phase 2 Project, which shall be approximately 8,800 square feet, and constructed, furnished and equipped as reasonably necessary for turnkey operation, with complete fit and finish, including all necessities to make it usable as a senior center, including without limitation, complete flooring, restrooms, paint, HVAC, electrical, demising walls and doors, hardware, lighting, and plumbing, constructed pursuant to a design approved by the CDC -HA, which shall be used by CDC -HA as a Senior Center for the community consistent with the requirements of IRC Section 42(d)(4)(C) pertaining to community service facility. "Senior Center Lease" shall mean that certain Commercial Lease to be entered into by and between the Affordable Housing Developer and the City relating to the Senior Center, which shall be a triple net lease for a term of 65 years for a rent equal to $1.00 per year. "Site 1" means that certain real property described as 560-050-06, 560-050-12 and 560- 050-10 and shown on the Parcel Map attached hereto as Exhibit A, upon which the Site 1 Owner shall construct the Phase 1 Project. "Site 1 Owner" shall mean owner of Site 1, which Site 1 Owner shall be a California limited partnership, whose sole general partner shall be a California limited liability company that is wholly owned by the Affordable Housing Developer. "Site 2" means that certain real property described as APN 560-410-06 and shown on the Parcel Map attached hereto as Exhibit A, which the CDC -HA intends to lease to the Site 2 Owner, upon which the Site 2 Owner shall construct the Phase 2 Project. "Site 2 Owner" shall mean owner of Site 2, which Site 2 Owner shall be a California limited partnership, whose sole general partner shall be a California limited liability company that is wholly owned by the Affordable Housing Developer. "Site 3" means the real property upon which the Health Center Developer shall construct the Phase 3 Project, which shall include the Kimball Public Right of Way, that certain real property described as all of APN 560-410-03, and portions of APN 560-050-06 and 560-050-12 shown on the Parcel Map attached hereto as Exhibit A. "TCAC Lease Rider" means the then current form of lease rider prepared by the California Tax Credit Allocation Committee at the time the Site 2 Owner enters into the Ground Lease relating to Site 2. "Very Low Income Household" means persons and families whose income does not exceed fifty percent (50%) of the then current Area Median Income, provided that such persons or families meet the additional requirements set forth in the Declaration. Page 9 of 61 200. Transfer of the Property. 201. Ground Lease and Fee Acquisition Terms. 201,1 Phase 1 Project. The Affordable Housing Developer shall transfer Site 1 to Site 1 Owner and shall cause the Site 1 Owner to construct the Phase 1 Project on Site 1. 201.2 Phase 2 Project. Subject to all of the terms and conditions of this Agreement and the Ground Lease, the CDC -HA shall ground lease Site 2 to the Site 2 Owner pursuant to the terms of the Ground Lease. The rent payable by the Affordable Housing or the Site 2 Owner, as applicable, to the CDC -HA shall be the leasehold value as determined by an appraisal satisfactory to the CDC -HA within 120 days of execution of this Agreement, which amount shall be paid as a single, capitalized rent payment at the Closing for Site 2. The Affordable Housing Developer shall cause the Site 2 Owner to construct the Phase 2 Project and the Senior Center on Site 2. 201.3 Phase 3 Project. (a) The Affordable Housing Developer shall acquire the Peterson Property and shall transfer all of APN 560-410-03, and portions of APN 560-050-06 and 560-050-12 to Health Center Developer. The CDC -HA shall transfer the Kimball Public Right of Way. (b) Subject to all of the terms and conditions of this Agreement, the CDC -HA shall sell the Kimball Public Right of Way to Health Center Developer, and Health Center Developer shall purchase the Kimball Public Right of Way from the CDC -HA at the Closing for the Phase 3 Project. The purchase price for the Kimball Public Right of Way shall be as determined by an appraisal satisfactory to the Health Center Developer and CDC -HA prior to the transfer of the Kimball Public Right of Way from the CDC -HA to the Health Center Developer. The Kimball Public Right of Way shall be conveyed to the Health Center Developer in an "as is" physical and environmental condition, with no warranty, express or implied, by the CDC -HA as to the condition of any existing improvements, the soil, its geology, the presence of known or unknown faults or Hazardous Materials or toxic substances, and it shall be the sole responsibility of the Health Center Developer at its expense to investigate and determine the physical and environmental conditions. (1) Health Center Developer and the CDC -HA shall open an escrow ("Escrow") with Escrow Agent to facilitate the Closing and conveyance of the Kimball Public Right of Way from the CDC -HA to the Health Center Developer. The parties will execute escrow instructions prior to the Closing, which shall provide for the order of recordation, distribution of original documents and other provisions customarily contained in escrow instructions. Health Center Developer shall pay all fees, charges, and costs which arise from Escrow, including without limitation the premiums for the any title policies, as well as all documentary transfer taxes, if any, due with respect to Health Center Developer's acquisition of the Kimball Public Right of Way (2) Closing Conditions for the Benefit of the CDC -HA. The CDC-HA's obligation to transfer the Kimball Public Right of Way to the Health Center Developer is conditioned upon satisfaction (or waiver) of each and all of the conditions set forth in this Section on or before the Closing. Any such waiver shall be effective only if the same is (i) expressly Page 10 of 61 waived in writing signed by the CDC -HA or by email from the CDC -HA, and (ii) delivered or emailed to the Health Center Developer and Escrow Agent. In the event that one or more of the conditions set forth in this Section are not satisfied or expressly waived on or before the. Closing, the CDC -HA (provided the CDC -HA is not in default hereunder) may unilaterally terminate this Agreement by mailing or emailing notice of conditional termination to the Health Center Developer and Escrow Agent. After receipt of such notice of conditional termination, the Health Center Developer shall have five (5) business days to cure any non -satisfaction of a condition or other default specified in the notice of conditional termination. If such matter is unsatisfied or cured prior to the expiration of such five (5) day period, then the Closing shall proceed and the CDC -HA waives any right to damages or compensation with respect to the unsatisfied condition. If such matter remains unsatisfied or the default remains uncured after the expiration of such five (5) day period, then this Agreement shall terminate at the close of business on such fifth (5th) day. Any such termination of this Agreement shall not release the Health Center Developer from liability under this Agreement. (a) No Default. Health Center Developer is not in default in any of its obligations under the terms of this Agreement. (b) Funds and Documents. The deposit by the Health Center Developer into Escrow of all funds and other documents and instruments required by this Agreement or by the Escrow Agent. (c) Street Vacation. The City has vacated the Kimball Public Right of Way. (3) Closing Conditions for the Benefit of the Health Center Developer. The Health Center Developer's obligation to close on the Kimball Public Right of Way is conditioned upon satisfaction (or waiver) of each and all of the conditions set forth in this Section on or before the Closing. Any such waiver shall be effective only if the same is (i) expressly waived in writing signed by the Health Center Developer or by email from the Health Center Developer, and (ii) delivered or emailed to the CDC -HA and Escrow Agent. In the event that one or more of the conditions set forth in this Section are not satisfied or expressly waived on or before the Closing, the Health Center Developer (provided the Health Center Developer is not in default hereunder) may unilaterally terminate this Agreement by mailing or emailing notice of conditional termination to the CDC -HA and Escrow Agent. After receipt of such notice of conditional termination, the CDC -HA shall have five (5) business days to cure any non -satisfaction of a condition or other default specified in the notice of conditional termination. If such matter is unsatisfied or cured prior to the expiration of such five (5) day period, then the Closing shall proceed and the Health Center Developer waives any right to damages or compensation with respect to the unsatisfied condition. If such matter remains unsatisfied or the default remains uncured after the expiration of such five (5) day period, then this Agreement shall terminate at the close of business on such fifth (5th) day. Any such termination of this Agreement shall not release the CDC -HA from liability under this Agreement. Page 11 of 61 (a) No Default. The CDC -HA is not in default in any of its obligations under the terms of this Agreement. (b) Grant Deed. The CDC -HA has deposited the duly executed and acknowledged Grant Deed into Escrow. (c) Additional Documents. The deposit by the CDC -HA into Escrow of all other documents and instruments reasonably required by the Escrow Agent. (d) Purchase and Sales Agreement. The Health Center Developer has agreed to the purchase price and terms and conditions for the sale and -transfer of Site 3. (e) Financing. The Health Center Developer has obtained approval of the terms and conditions of this Agreement from its Board of Trustees, has obtained financing terms that are satisfactory to the Board of Trustees and has obtained the consent of California Bank & Trust to incur new debt. 202. Financing of Phase 1 Project, Phase 2 Project and Phase 3 Project; Lease of Senior Center. 202,1 Acquisition and Construction Loan for Phase 1 Project and Phase 2 Project. The Affordable Housing Developer intends to finance the acquisition and construction of the Phase 1 Project and Phase 2 Project as a single-phase project. CDC -HA has agreed to provide the Site 1 Owner and Site 2 Owner (which may be the same person) an acquisition and construction loan for the Phase 1 Project and the Phase 2 Project which in the aggregate equal the CDC -HA Loan Amount, which loan shall be evidenced by the Phase 1 Project Note and the Phase 2 Project Note (which will be combined into a single promissory note in the event the Phase 1 Project and Phase 2 Project are owned, constructed and financed as a single project, if so combined, the "Project Promissory Note"). The Phase 1 Project Note and the Phase 2 Project Note will be secured by the Phase 1 Deed of Trust, the Phase 2 Deed of Trust which will be combined into a single deed of trust in the event the Phase 1 Project and Phase 2 Project are owned, constructed and financed as a single project) and such other documents as required by CDC=HA in its reasonable discretion to document and secure such loan. In the event the Affordable Housing Developer is unable to develop the Phase 1 Project and Phase 2 Project as a single phase project and must separately finance the acquisition and construction of the Phase 1 Project and the Phase 2 Project, then the Affordable Housing Developer may separate the Project Promissory Note into the Phase 1 Project Note and the Phase 2 Project Note (which combined shall not exceed the CDC -HA Loan Amount), to be secured by. the Phase 1 Deed of Trust and Phase 2 Deed of Trust, respectively. The original principal amounts of such Phase 1 Project Note and the Phase 2 Project Note shall be subject to the approval of the Executive Director of the CDC -HA. The Project Promissory Note shall be for a term of 55 years from the Closing, shall bear simple interest rate of 3% and shall be repayable from 50% of the aggregate annual cash flow from the Phase 1 Project and Phase 2 Project (after payment of partnership management fee of $25,000, asset management fee of $12,500 and any deferred developer fee, the amount of any deferred developer fee shall be subject to the approval of the Executive Director of the CDC -HA) and shared with any other residual receipts lenders which are approved by the Executive Director of the CDC -HA. In the event the Phase 1 Project Page 12 of 61 and Phase 2 Project are separately financed, then each of the Phase 1 Project Note and Phase 2 Project Note shall be for a term of 55 years from the Closing, shall bear interest rate of 3% and shall be repayable from 50% of the annual cash flow from each of the Phase 1 Project or Phase 2 Project, as applicable (after payment of partnership management fee of $20,000 in each of Phase 1 Project or Phase 2 Project, as applicable), asset management fee of $7,500 (in each of Phase 1 Project and Phase 2 Project, as applicable) and any deferred developer fee, the amount of any deferred developer fee shall be subject to the approval of the Executive Director of the CDC -HA (in each of Phase 1 Project or Phase 2 Project, as applicable) and shared with any other residual receipts lenders which are approved by the Executive Director of the CDC -HA. The Project Promissory Note or the Phase 1 Project Note and the Phase 2 Project Note, as applicable, and Phase 1 Deed of Trust and Phase 2 Deed of Trust shall be subordinated to the Construction Deed of Trust and Permanent Deed of Trust. The Affordable Housing Developer shall have the right to refinance the senior construction or permanent loan, provided that the refinanced senior construction or permanent loan shall not (i) increase the stated rate of interest, (ii) decrease the term; (iii) increase the principal amount of the indebtedness to which the Phase 1 Project Deed of Trust or the Phase 2 Project Deed of Trust will be subordinate; and (iv) the Affordable Housing Developer (or the Site 1 Owner or Site 2 Owner, as applicable) does not receive any cash as a result of the refinancing. In such event, the Project Promissory Note, or Phase 1 Project Note and Phase 2 Project Note, the Phase 1 Project Deed of Trust and the Phase 2 Project Deed of Trust shall be subordinated to such refinanced senior construction or permanent loan, provided that the Executive Director of the CDC -HA has reasonably approved the same. Any cost savings as determined by the accountant for the Phase 1 Project and the Phase 2 Project shall be used to first pay off project costs (including any deferred developer fee which is approved by the Executive Director of the CDC -HA) for the Phase 1 Project and the Phase 2 Project, and then to be shared fifty percent (50%) to the Affordable Housing Developer and the other fifty percent (50%) to the CDC -HA and other soft lenders, which are approved by the Executive Directorof the CDC -HA, in proportion to the original principal balance of their loans. 202.2 Senior Center Located at Site 2. Following the construction completion of the Phase 2 Project by the Affordable Housing Developer, including without limitation, completion of construction, furnishing and equipping the Senior Center, as set forth in the definition of "Senior Center, as set forth above, the Affordable Housing Developer shall lease the Senior Center located within the Phase 2 Project to the City pursuant to the Senior Center Lease. 202.3 Financing of the Acquisition and Construction, Operation and Maintenance of the Health Care Center. The parties hereto acknowledge and agree that the financing of the acquisition and construction and operation and maintenance of the Phase 3 Project shall be the sole responsibility of the Health Center Developer. Notwithstanding the foregoing, CDC -HA, the Affordable Housing Developer and Health Center Developer acknowledge and agree that the Phase 3 Project is an integral part of the Master Plan contemplated under this Agreement and that the parties hereto will work cooperatively in the design and planning of each of the Phase 1 Project, the Phase 2 Project and Phase 3 Project. Page 13 of 61 203. Escrow. 203.1 Phase 1 Project. Prior to the Closing Deadline for the Phase 1 Project, the Affordable Housing Developer shall open the Escrow with Escrow Agent to facilitate the Closing for the Phase 1 Project, the loan evidenced by the Phase 1 Project Note and recordation of the various encumbrances on the Phase 1 Project. The parties will execute the Escrow Instructions prior to the Closing for the Phase 1 Project, which shall provide for the order of recordation, distribution of original documents and other provisions customarily contained in escrow instructions. The Affordable Housing Developer shall pay all fees, charges, and costs which arise from Escrow, as well as all documentary transfer taxes due with respect to the Affordable Housing Developer's acquisition of the Site 1. 203.2 Phase 2 Project. Prior to the Closing Deadline for the Phase 2 Project, the Affordable Housing Developer and the CDC -HA shall open the Escrow with Escrow Agent to facilitate the Closing for the Phase 2 Project and the Ground Lease of Site 2 to the Affordable Housing Developer and recordation of the various encumbrances on the Leasehold. The parties will execute the Escrow Instructions prior to the Closing for the Phase 2 Project, which shall provide for the order of recordation, distribution of original documents and other provisions customarily contained in escrow instructions. The Affordable Housing Developer shall pay all fees, charges, and costs which arise from Escrow, as well as all documentary transfer taxes due with respect to the Affordable Housing Developer's acquisition of the Leasehold. 203.3 Phase 3 Project. Prior to the Closing Deadline for the Phase 3 Project, the Health Center Developer, CDC -HA and the Affordable Housing Developer shall open the Escrow with Escrow Agent to facilitate the Closing for the Phase 3 Project and recordation of the various encumbrances on the Phase 3 Project. The parties will execute the Escrow Instructions prior to the Closing for the Phase 3 Project, which shall provide for the transfer of fee title by CDC -HA to the Kimball Public Right of way to Health Center Developer, the transfer of fee title by the Affordable Housing Developer . of the Health Center Site, order of recordation, distribution of original documents and other provisions customarily contained in escrow instructions. The Health Center Developer shall pay all fees, charges, and costs which arise from Escrow, as well as all documentary transfer taxes due with respect to the Health Center Developer's acquisition of the Kimball Public Right of Way and the Health Center Site. 204. Conditions to Closing. 204.1 Closing Conditions in Favor of Both Affordable Housing Developer and CDC -HA. The Closing for the Phase 1 Project and the Closing for the Phase 2 Project are each individually conditioned upon satisfaction (or waiver) of each and all of the conditions set forth in this Section 204.1 on or before the Closing Deadline for the Phase 1 Project or the Closing Deadline for the Phase 2 Project, as applicable. In the event that one or more of the conditions set forth in this Section 204.1, are not satisfied with respect to the Phase 1 Project on or before the Closing Deadline for the Phase 1 Project, then this Agreement shall be terminated with respect to. the Phase 1 Project, unless the CDC -HA, the Affordable Housing Developer waive satisfaction of such condition or conditions in writing, in which event the Closing for the Phase 1 Project, shall Page 14 of 61 proceed and the parties waive any right to damages or compensation with respect to the unsatisfied condition. In the event the Closing for the Phase 1 Project has occurred (or would occur concurrently with the Closing for the Phase 2 Project), and then one or more of the conditions set forth in this Section 204.1, are not satisfied with respect to the Phase 2 Project on or before the Closing Deadline for the Phase 2 Project, then this Agreement shall be terminated with respect to the Phase 2 Project, unless the CDC -HA and the Affordable Housing Developer waive satisfaction of such condition or conditions in writing, in which event the Closing for the Phase 2 Project, shall proceed and both parties waive any right to damages or compensation with respect to the unsatisfied condition, subject to any extensions which may be agreed upon pursuant to Section 602 herein. To the extent (i) all closing conditions have been met with respect to the Phase 1 Project, and the parties have closed on the Phase 1 Project, the failure to meet closing conditions on the Phase 2 Project shall not be grounds for a termination of this Agreement with respect to the Phase 1 Project or any other Agreement by and among Affordable Housing Developer, National City and/or CDC -HA regarding the Phase 1 Project; and (ii) all closing conditions have beenmet with respect to the Phase 2 Project, and the parties have closed on the Phase 2 Project, the failure to meet closing conditions on the Phase 1 Project shall not be grounds for a termination of this Agreement with respect to the Phase 2 Project or any other Agreement by and among Affordable Housing Developer, National City and/or CDC -HA regarding the Phase 2 Project. It is expressly understood and agreed to that Phase 1 Project and Phase 2 Project may (i) close concurrently, (ii) close as a single phase project if financing permits, or (iii) commence independent of each other and closing for each of Phase 1 Project and Phase 2 Project may occur separately during the term of this Agreement. (a) Project Design and Plan. Developer shall have obtained approval from the CDC -HA of the Project Design and Plan for the Phase 1 Project or the Phase 2 Project, as applicable. (b) TCAC Award. (1) Phase 1 Project. The Affordable Housing Developer shall have obtained an allocation or reservation of either 4% or 9% low income housing tax credits from the California Tax Credit Allocation Committee for the Phase 1 Project and if 4% low income housing tax credits, an accompanying allocation of tax exempt bonds from the California Debt Limit Allocation Committee for the Phase 1 Project. It is expressly understood and agreed that the Affordable Housing Developer may need to apply for either 4% or 9% through multiple rounds during the term ofthis Agreement. (2) Phase 2 Project. The Affordable Housing Developer shall have obtained an allocation or reservation of either 4% or 9% low income housing tax credits from the California Tax Credit Allocation Committee for the Phase 2 Project and if 4% low income housing tax credits, an accompanying allocation of tax exempt bonds from the California Debt Limit Allocation Committee for the Phase 2 Project. It is expressly understood and agreed that the Affordable Housing Developer may need to apply for either 4% or 9% through multiple rounds during the term of this Agreement. Page 15 of 61 (c) Performance and Payment Bond. The Affordable Housing Affordable shall have caused its contractor to post security in the form of a performance and payment bond for each of the Phase 1 Project and Phase 2 Project in an amount and in a form acceptable to the CDC -HA in its reasonable discretion, to assure the completion of the Project Design and Plan. Each performance and payment bond shall insure that construction completion based on the Project Design and Plan with respect to each of Phase 1 Project or Phase 2 Project, as applicable, is timely accomplished, free and clear of mechanic's liens, stop notices and other encumbrances, concerning the provision of material, labor and supplies. Upon a failure of by the Affordable Housing Developer to timely perform its requirements under the terms of this Agreement, the CDC -HA may resort to the performance and payment bond to ensure performance of this Agreement, by either requiring the bonding company, or its designees, to comply with the terms of this Agreement, or at the election of the CDC -HA, by requiring the bonding company to pay all costs necessary for the CDC -HA, to take over and complete the construction as contemplated under the Project Design and Plan at the cost and expense of the bonding company. (d) Construction Contract. The construction contract for the Phase 1 Project or the Phase 2 Project, as applicable, acceptable to the CDC -HA, shall have been executed by the Affordable Housing Developer and the general contractor who has been selected by the Affordable Housing Developer to do the work. The general contractor and the construction contract for each of Phase 1 Project and Phase 2 Project shall be subject to the approval of CDC -HA, which approval shall not be unreasonably withheld, conditioned or delayed. (e) Entitlements. The Affordable Housing Developer shall have secured any and all land use and other entitlements, permits and approvals which may be required for completion of the Project Design and Plan for the Phase 1 Project or the Phase 2 Project, as applicable (the "Entitlements"). The Master Developer shall have paid any and all applicable fees (including, without limitation, communities facility district fees and public facilities fees imposed by the City or any other governmental agency having jurisdiction with respect to the same) (collectively, the "City and Permit Fees"), or shall pay such fees concurrently with Closing for the Phase 1 Project or the Phase 2 Project, as applicable. The CDC -HA shall not be responsible in any way for, the processing of Developer's building permits or other permit applications with the City. The execution of this Agreement does not constitute the granting of or a commitment to obtain any required land use permits, entitlements or approvals. (f) Title Policies. Escrow Agent is prepared and irrevocably obligated to cause to be issued: (i) a title policy insuring the Affordable Housing Developer's interest in the Phase 1 Project or the Affordable Housing Developer's interest in the Phase 2 Project, as applicable; and (ii) a title policy insuring the CDC-HA's interest in the Phase 1 Project Deed of Trust for the Phase 1 Project or the Phase 2 Project Deed of Trust for the Phase 2 Project, as applicable. Page 16 of 61 (g) Forms of Documents. The CDC -HA and the Affordable Housing Developer have agreed (or will agree prior to Closing of the Phase 1 Project or the Closing of the Phase 2 Project, as applicable) to the forms of the Ground. Lease, Declaration, Phase 1 Project Note, Phase 1 Project Deed of Trust, Phase 2 Project Note, Phase 2 Project Deed of Trust, Security Agreement, Environmental Indemnity and all other documents reasonably necessary to complete the Closing for the Phase 1 Project or the Phase 2 Project, as applicable. (h) Financing. Concurrently with the Closing for the Phase 1 Project or Closing for the Phase 2 Project, as applicable, the Affordable Housing Developer shall have obtained all fmancing and lender approvals necessary to acquire Phase 1 Project or the Phase 2 Project, as applicable, and complete the applicable Project Design and Plan. 204.2 Closing Conditions for the Benefit of the CDC -HA. The CDC-HA's obligation to Close on each of the Phase 1 Project and the Phase 2 Project are conditioned upon satisfaction (or waiver) of each and all of the conditions set forth in this Section 204.2 on or before the Closing Deadline for the Phase 1 Project or the Closing Deadline for the Phase 2 Project, as applicable. Any such waiver shall be effective only if the same is (i) expressly waived in writing signed by the CDC -HA or by email from the CDC -HA, and (ii) delivered or emailed to the Developer and Escrow Agent. In the event that one or more of the conditions set forth in this Section 204.2 are not satisfied or expressly waived on or before the Closing Deadline for the Phase 1 Project, the CDC -HA (provided the CDC -HA is not in default hereunder) may unilaterally terminate this Agreement by mailing or emailing notice of conditional termination to the Affordable Housing Developer and Escrow Agent with respect to the Phase 1 Project. In the event the Closing for the Phase 1 Project has occurred, and if one or more of the conditions set forth in this Section 204.2 are not satisfied or expressly waived on or before the Closing Deadline for the Phase 2 Project, the CDC -HA (provided the CDC -HA is not in default hereunder) may unilaterally terminate this Agreement with respect to the Phase 2 Project by mailing or emailing notice of conditional termination to the Affordable Housing Developer and Escrow Agent. After receipt of any such notice of conditional termination, the Phase 1 Project or the Phase 2 Project, as applicable, shall have ten (10) business days to cure any non -satisfaction of a condition or other default specified in the notice of conditional termination. If such matter is satisfied or cured prior to the expiration of such ten (10) day period, then the Closing for the Phase 1 Project or the Closing for the Phase 2 Project, as applicable, shall proceed and the CDC -HA shall be deemed to have waived any right to damages or compensation with respect to the unsatisfied condition. If such matter remains unsatisfied or the default remains uncured after the expiration of such ten (10) day period with respect to the Phase 1 Project, then this Agreement shall terminate at the close of business on such tenth (loth) day with respect to the Phase 1 Project. In the event any such matter remains unsatisfied or the default remains uncured after the expiration of such ten (10) day period with respect to the Phase 2 Project, then this Agreement shall terminate with respect to the Phase 2 Project at the close of business on such tenth (loth) day. Any such termination of this Agreement shall not release the Affordable Housing Developer from liability under this Agreement. Page 17 of 61 (a) No Default. The Affordable Housing Developer is not in default in any of its obligations under the terms of this Agreement and all representations and warranties made by the same to the CDC -HA contained herein shall be true and correct in all material respects. (b) Insurance. The Affordable Housing Developer shall have provided proof of insurance as required by the CDC -HA. (c) Attorneys' and Experts' Fees. The Affordable Housing Developer has paid prior to or will pay concurrently with the Closing for the Phase 1 Project or the Closing for the Phase 2 Project, as applicable, all consultants', experts' and attorneys' fees incurred by the CDC -HA with respect to the same. (d) Deposit of Documents. The Affordable Housing Developer has duly executed and (where necessary) caused to be notarized the Ground Lease, Declaration, Phase 1 Project Note, Phase 1 Deed of Trust, Phase 2 Project Note, Phase 2 Deed of Trust, Security Agreement, Environmental Indemnity and all other documents reasonably required by the CDC -HA or reasonably necessary to complete the Closing for the Phase 1 Project or the Phase 2 Project, as applicable, and has deposited the same into Escrow. (e) Additional Documents. The deposit by the Affordable Housing Developer into Escrow of all other documents and instruments reasonably required by Escrow. 204,3 Closing Conditions for the Benefit of the Affordable Housing Developer. The Affordable Housing Developer's obligation to Close on each of the Phase 1 Project and the Phase 2 Project are conditioned upon satisfaction (or waiver) of each and all of the conditions set forth in this Section 204.3 on or before the Closing Deadline for the. Phase 1 Project or the Closing Deadline for the Phase 2 Project, as applicable. Any such waiver shall be effective only if the same is (i) expressly waived in writing signed by, or by email from, the Affordable Housing Developer, and (ii) delivered or emailed to the CDC -HA and Escrow Agent. In the event that one or more of the conditions set forth in this Section 204.3 are not satisfied or expressly waived on or before the Closing Deadline for the Phase 1 Project, the Affordable Housing Developer (provided the Phase 1 Project is not in default hereunder) may unilaterally terminate this Agreement by mailing or emailing notice of conditional termination to the CDC -HA and Escrow Agent with respect to the Phase 1 Project. In the event one or more of the conditions set forth in this Section 204.3 are not satisfied or expressly waived on or before the Closing Deadline for the Phase 2 Project, the Affordable Housing Developer (provided the Affordable Housing Developer is not in default hereunder) may unilaterally terminate this Agreement with respect to the Phase 2 Project by mailing or emailing notice of conditional termination to the CDC -HA and Escrow Agent. After receipt of such notice of conditional termination, the CDC -HA shall have ten (10) business days to cure any non -satisfaction of a condition or other default specified in the notice of conditional termination. If such matter is satisfied or cured prior to the expiration of such ten (10) day period, then the Closing for the Phase 1 Project or the Closing for the Phase 2 Project, as applicable, shall proceed and the Affordable Housing Developer waives any right to damages or compensation with Page 18 of 61 respect to the unsatisfied condition. If such matter remains unsatisfied or the default remains uncured after the expiration of such ten (10) day period with respect to the Phase 1 Project, then this Agreement shall terminate at the close of business on such ten (loth) day with respect to Phase 1 Project. In the event any such matter remains unsatisfied or the default remains uncured after the expiration of such ten (10) day period with respect to the Phase 2 Project, then this Agreement shall terminate with respect to the Phase 2 Project at the close of business on such tenth (loth) day. Any such termination of this Agreement shall not release the CDC -HA from liability under this Agreement. (a) No Default. The CDC -HA is not in default in any of its obligations under the terms of this Agreement and all representations and warranties of the CDC -HA contained herein shall be true and correct in all material respects. (b) Deposit of Documents. The CDC -HA has duly executed and (where necessary) caused to be notarized the Ground Lease, Declaration, Phase 1 Project Deed of Trust, Phase 2 Project Deed of Trust, Security Agreement, Environmental Indemnity and all other documents reasonably required by the CDC -HA or reasonably necessary to complete the Closing for the Phase 1 Project or the Phase 2 Project, as applicable, and has deposited the same into Escrow. (c) Additional Documents. The deposit by the CDC -HA into Escrow of all other documents and instruments reasonably required by Escrow. 205. Financing Plan. It is anticipated that the Phase 1 Project and the Phase 2 Project will be financed by 4% or 9% low income housing tax credits (either as a single project or separate project), senior construction and permanent loan by a private lender and the Project 1 Note and Project 2 Note. Notwithstanding the foregoing, the Affordable Housing Developer shall have the right to propose an alternative financing plan subject to the approval of the Executive Director of the CDC -HA, provided, no secured loan, deed of trust, or encumbrance, except for the Construction Deed of Trust and Permanent Deed of Trust shall be placed upon any portion of the Phase 1 Project or Phase 2 Project, whether by refinancing or otherwise, without first obtaining the express written consent of the Executive Director of the CDC -HA, which consent shall not be unreasonably delayed, conditioned or withheld. Further, any refinancing or subsequent encumbrance shall be subject to the Executive Director of the CDC-HA's reasonable approval, and CDC -HA shall be provided American Land Title Association ("ALTA") title insurance policy or endorsements acceptable to the CDC -HA, at the cost and expense of Affordable Housing Developer. Failure to obtain such written consent shall be a Default hereunder and such unconsented to financing or refinancing shall be void. Except for Permitted Transfers and refinancing allowed by this Section 205, if Affordable Housing Developer refinances the Phase 1 Project or Phase 2 Project without previously obtaining the CDC-HA's prior written consent, the CDC -HA shall receive one hundred percent (100%) of the net amount of the refinancing. With regard to any alternative financing plan, so long as the alternative financing plan will not result in an increase in the size of the Project 1 Note or Project 2 Note, any approval relating to the alternative financing may be approved by the Executive Director of CDC -HA administratively. Page 19 of 61 206. Default. Notwithstanding Section 501,below, or anything contained herein to the contrary, after the Closings for each of the Phase 1 Project and the Phase 2 Project, in the event of any Default, beyond any applicable cure period, in the performance of any of the terms, covenants and conditions contained in: (i) this Agreement (subject to a 30 days cure period); (ii) any document or instrument executed by the Affordable Housing Developer in conjunction with this Agreement; (iii) any prior or junior note secured by an encumbrance on the Phase 1 Project or the Phase 2 Project, as applicable, or any portions of such leaseholds; (iv) any note or deed of trust given in conjunction herewith; (v) in the event of the filing of a bankruptcy proceeding by the Affordable Housing Developer; or (vi) in the event of the filing of a bankruptcy against the Affordable Housing Developer which is not dismissed within ninety (90) days of filing, then (a) all sums owing by the Affordable Housing Developer, to the CDC -HA with respect to the Phase 1 Project or Phase 2 Project, respectively, shall at the option of CDC -HA immediately become due and payable; (b) the CDC -HA shall have the right to foreclosure under the applicable Phase 1 Project Deed of Trust or Phase 2 Project Deed of Trust; and (c) CDC -HA shall be released from any and all obligations to Affordable Housing Developer under the terms of this Agreement to the Affordable Housing Project with respect to Phase 1 Project or Phase 2 Project that is then in Default. These remedies shall be in addition to any and all other rights and remedies available to CDC -HA, either at law or in equity. Further, default interest shall accrue on the principal balance of the Phase 1 Project Note or Phase 2 Project Note, as applicable, from the date of the Phase 1 Project Note or Phase 2 Project, as applicable, at the rate of ten percent (10%) simple interest per annum or the maximum rate than allowed by law, whichever is less. Notwithstanding anything to the contrary set forth in this Agreement, in all instances hereunder, but only if the Phase 1 Project and the Phase 2 Project are constructed, owned and financed as separate developments, then, all rights, duties and obligations of the owner of the Phase 1 Project shall be the rights, duties and obligations solely of the owner of the Phase 1 Project (and not of the owner of the Phase 2 Project), and all rights, duties and obligations of the Phase 2 Project hereunder with respect to the Phase 2 Project, shall be the rights, duties and obligations solely of the owner of the Phase 2 Project (and not of the owner of the Phase 1 Project), it being the intent of the parties hereto that the rights, duties and obligations of the owner of the Phase 1 Project and the rights, duties and obligations of the Phase 2 Project shall not be cross -defaulted if built as separate, stand-alone projects. 207. Representations and Warranties. 207.1 CDC -HA Representations and Warranties. CDC -HA represents and warrants to Affordable Housing Developer and Health Center Developer that the CDC -HA is a public body, corporate and politic, existing pursuant to the California Community Redevelopment Law (California Health and Safety Code Section 33000), which has been authorized to transact business pursuant to action of the City. CDC -HA has full right, power and lawful authority to take all actions and undertake all obligations required of the CDC -HA under this Agreement. 207.2 Affordable Housing Developer's Representations and Warranties. The Affordable Housing Developer represents and warrants to CDC -HA and Health Center Developer as follows: (a) Authority. The Affordable Housing Developer is a California nonprofit public benefit corporation. The persons executing this Agreement on behalf of Page 20 of 61 the Affordable Housing Developer have all necessary authority to execute this Agreement on behalf of Affordable Housing Developer, and this Agreement is a binding obligation of Affordable Housing Developer. Copies of the Articles of Incorporation and Bylaws of the Affordable Housing Developer will be delivered to CDC -HA five (5) business days prior to final approval of the Agreement and within five (5) business days of each Closing. These copies will be true, complete and fully -executed copies of the originals, as amended to the date of this Agreement. The Affordable Housing Developer has and will have full right, power and lawful authority to enter into the Ground Lease and undertake all obligations as provided in this Agreement. (b) No Conflict. Affordable Housing 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 Affordable Housing Developer is a party or by which it is bound. (c) No Bankruptcy. Affordable Housing Developer is not the subject of a bankruptcy proceeding. • (d) Rent and Occupancy Restrictions. Affordable Housing Developer shall at all times after the Closing during the 55-year term comply with the requirements of the Declaration. 207.3 Health Center Developer's Representations and Warranties. The Health Center Developer represents and warrants to CDC -HA and the Affordable Housing Developer as follows: (a) Authority. The Health Center Developer is a California nonprofit public benefit corporation. The persons executing this Agreement on behalf of the Health Center Developer have all necessary authority to execute this Agreement on behalf of Health Center Developer, and this Agreement is a binding obligation of Health Center Developer. Copies of the Articles of Incorporation and Bylaws of the Health Center Developer will be delivered to CDC -HA and Affordable Housing Developer five (5) business days prior to final approval of the Agreement and within five (5) business days of each Closing of which Health Center Developer is a party. These copies will be true, complete and fully -executed copies of the originals, as amended to the date of this Agreement. The Health Center Developer has and will have full right, power and lawful authority to enter into the Public Right of Way Purchase Agreement, the Health Center Purchase Agreement and undertake all obligations as provided in this Agreement. (b) No Conflict. Health Center 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 Health Center Developer is a party or by which it is bound. (e) No Bankruptcy. Health Center Developer is not the subject of a bankruptcy proceeding. Page 21 of 61 208. Studies and Reports. Prior to the Closing, representatives of Affordable Housing Developer shall have the right of access to all portions of the Property for the purpose of obtaining data and making surveys and tests necessary to carry out this Agreement. Any preliminary work undertaken on the Property by Affordable Housing Developer prior to the Closing shall be done at the sole risk and expense of Affordable Housing Developer. Any preliminary work shall be undertaken only after securing all necessary permits from the appropriate governmental agencies. 209. Condition of the Property. 209,1 "As -Is," "Where -Is". The CDC -HA has not investigated and makes no representations or warranties whatsoever regarding the condition of any of Site 1, Site 2 or Site 3. Affordable Housing Developer hereby agrees to take Leasehold title to the Site 2 and Health Center Developer agrees to take fee title to Public Right of Way "as -is." Leasehold title to Site 2 and fee title to the Public Right of Way shall be conveyed to the Affordable Housing Developer and Health Center Developer, respectively, in an "as -is" physical and environmental condition, with no warranty, express or implied, by the CDC -HA as to the condition of any existing improvements, the soil, its geology, the presence of known or unknown faults or Hazardous Materials or toxic substances, and it shall be the sole responsibility of the Affordable Housing Developer or Health Center Developer, as applicable, at eachof their own expense to investigate and determine the physical and environmental conditions of Site 2 and the Public Right of Way, as applicable. Each of the Affordable Housing Developer and Health Center Developer shall have the right to engage its own environmental consultant (the `Environmental Consultant") and other consultants to make such investigations of the Property as the Affordable Housing Developer or Health Center Developer, as applicable, deems necessary, including any soils, geotechnicai and other testing of the Property, and the CDC -HA shall promptly be provided a copy of all reports and test results provided to the Affordable Housing Developer or the Health . Center Developer by the Environmental Consultant (collectively, the "Environmental Reports"). Each of Affordable Housing Developer and Health Center Developer shall reasonably approve or disapprove of the physical and environmental condition of Site 2 or the Public Right of Way, as applicable, no later than forty-five (45) days from the date from the date this Agreement is executed by the CDC -HA, provided that each of the Affordable Housing Developer and Health Center Developer shall have the right to terminate this Agreement during such forty-five (45) days period based upon the environmental condition of Site 2 or the Public Right of Way. The Affordable Housing Developer's or Health Center Developer's failure, as applicable, to deliver written notice of its termination within such time limit shall be deemed approval of the physical and environmental condition of the Site 2 or the Public Right of Way, as applicable, and as a waiver of Affordable Housing Developer's or Health Center Developer's right to object to the physical and environmental condition of the Site 2 or Public Right of Way, as applicable. If the Affordable Housing Developer or Health Center Developer approves or is deemed to approve the physical and environmental condition of the Site 2 or the Public Right of Way, as applicable, then, as among Affordable Housing Developer, Health Center Developer, City and CDC -HA, it shall be the sole responsibility and obligation of the Affordable Housing Developer or Health Center Developer, as applicable, to take such action as may be necessary to place the physical and environmental conditions of the Site 2 or Public Right of Way, in a condition entirely suitable for the purposes set forth in this Agreement. Page 22 of 61 209.2 Affordable Housing Developer Precautions After Closing. From and after the Closing for the Phase 1 Project and the Closing for the Phase 2 Project, respectively, Affordable Housing Developer shall take all necessary precautions to prevent the release in, on or under the Phase 1 Project and the Phase 2 Project of any Hazardous Materials. Such precautions shall include compliance with all Governmental Requirements with respect to Hazardous Materials. In addition, Affordable Housing Developer shall install and utilize such equipment and implement and adhere to such procedures as are consistent with commercially reasonable standards as respects the disclosure, storage, use, removal and disposal of Hazardous Materials. 209.3 Health Center Developer Precautions After Closing. From and after the Closing for the Phase 3 Project, Health Center Developer shall take all necessary precautions to prevent the release in, on or under the Phase 3 Project of any Hazardous Materials. Such precautions shall include compliance with all Governmental Requirements . with respect to Hazardous Materials. In addition, Affordable Housing Developer shall install and utilize such equipment and implement and adhere to such procedures as are consistent with commercially reasonable standards as respects the disclosure, storage, use, removal and disposal of Hazardous Materials. 209.4 Required Disclosures After Closing of Phase 1 Project or Phase 2 Project. From and after the Closing for the Phase 1 Project and. the Closing for the Phase 2 Project, respectively, Affordable Housing Developer shall notify CDC -HA, and provide the CDC -HA with a copy or copies, of all environmental permits, disclosures, applications, entitlements or inquiries relating to the Phase 1 Project and the Phase 2 Project, including notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, cease and desist orders, reports filed pursuant to self -reporting requirements and reports filed or applications made pursuant to any Governmental Requirements relating to Hazardous Materials and underground tanks. Affordable Housing Developer shall report to the CDC -HA, as soon as possible after each incident, any unusual or potentially important incidents with respect to the environmental condition of the Phase 1 Project or the Phase 2 Project. In the event of a release of any Hazardous Materials into the environment, Affordable Housing Developer shall, as soon as possible after the release, deliver to the CDC -HA a copy of any and all reports relating thereto and copies of all correspondence with governmental agencies relating to the release. Upon request, Affordable Housing Developer shall deliver to the CDC -HA a copy or copies of any and all other environmental entitlements or inquiries relating to or affecting the Phase 1 Project or the Phase 2 Project including, but not limited to, all permit applications; permits and reports including, without limitation, those reports and other matters which may be characterized as confidential. 209.5 Required Disclosures After Closing of Phase 3 Project. From and after the Closing for the Phase 3 Project, Health Center Developer shall notify CDC -HA, and provide the CDC -HA with a copy or copies, of all environmental permits, disclosures, applications, entitlements or inquiries relating to the Phase 3 Project, including notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, cease and desist orders, reports filed pursuant to self -reporting requirements and reports filed or applications .made pursuant to any Governmental Requirements relating to Hazardous Materials and underground tanks. Health Center Developer shall report to the CDC -HA, as soon as possible after each incident, any unusual Page 23 of 61 or potentially important incidents with respect to the environmental condition of the Phase 3 Project. In the event of a release of any, Hazardous Materials into the environment,,Health Center Developer shall, as soon as possible after the release, deliver to the CDC -HA a copy of any and all reports relating thereto and copies of all correspondence with governmental agencies relating to the release. Upon request, Health Center Developer shall deliver to the CDC -HA a copy or copies of any and all other environmental entitlements or inquiries relating to or affecting the Phase 3 Project including, but not limited to, all permit applications, permits and reports including, without limitation, those reports and other matters which may be characterized as confidential. 210. Affordable Housing Developer Indemnity. From and after the Closing for the Phase 1 Project and the Closing for the Phase 2 Project, respectively, the owner of the Phase 1 Project and the owner of the Phase 2 Project, respectively, agrees to indemnify, defend and hold CDC -HA harmless from and against any claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense (including, without limitation, attorneys' fees), resulting from, arising out of, or based upon any of the following: (i) the presence, release, use, generation, 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 Phase 1 Project or the Phase 2 Project, or (ii) the violation, or alleged violation, of any statute, ordinance, order, rule, regulation, permit, judgment or license relating to the use, generation, release, discharge,, storage, disposal or transportation of Hazardous Materials on, under, in or about, to or from, the Phase 1 Project or the Phase 2 Project. This indemnity shall include, without limitation, any damage, liability, fine, penalty, parallel indemnity after closing cost or expense arising from or out of any claim, action, suit or proceeding for personal injury (including sickness, disease or death), tangible or intangible property damage, compensation for lost wages, business income, profits or other economic loss, damage to the natural resource or the environment, nuisance, contamination, leak, spill, release or other adverse effect on the environment. Provided, however, that this indemnity shall be limited to claims, actions, suits, proceedings, losses, costs, damages, liabilities, deficiencies, fines, penalties, punitive damages, or expenses due to conditions first occurring from and after the Closing for the Phase 1 Project and the Closing for the Phase 2 Project, respectively. This indemnity does not include any condition arising solely as a result of the negligence or willful misconduct of the CDC -HA or its employees, agents, representatives, successors or assigns. This Section 210 shall apply with respect to the owner of the Phase 1 Project only with respect to the Phase 1 Project and shall apply with respect to the owner of the Phase 2 Project only with respect to the Phase 2 Project, i.e., the owner of the Phase 1 Project shall not have any obligations or liability with respect to the Phase 2 Project and the owner of the Phase 2 Project shall not have any obligations or liability with respect to the Phase 1 Project. 211. Health Center Developer Indemnity. From and after the Closing for the Phase 3 Project, Health Center Developer agrees to indemnify, defend and hold CDC -HA haintless from and against any claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense (including,without limitation, attorneys' fees), resulting from, arising out of, or based upon any of the following: (i) the presence, release, use, generation, 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 Phase 3 Project, or (ii) the violation, or alleged violation, of any statute, ordinance, order, rule, regulation, permit, judgment or license relating to the use, generation, release, discharge, storage, disposal or transportation of Hazardous Page 24 of 61 Materials on, under, in or about, to or from, the Phase 3 Project. This indemnity shall include, without limitation, any damage, liability, fine, penalty, parallel indemnity after closing cost or expense arising from or out of any claim, action, suit or proceeding for personal injury (including sickness, disease or death), tangible or intangible property damage, compensation for lost wages, business income, profits or other economic loss, damage to the natural resource or the environment, nuisance, contamination, leak, spill, release or other adverse effect on the environment. Provided, however, that this indemnity shall be limited to claims, actions, suits, proceedings, losses, costs, damages, liabilities, deficiencies, fines, penalties, punitive damages, or expenses due to conditions first occurring from and after the Closing for the Phase 3 Project. 300. Scope of Construction. 301, CDC -HA Review and Approval of the Project Design and Plan. Affordable Housing Developer shall prepare and submit a Project Design and Plan for each of the Phase 1 Project and the Phase 2 Project to the CDC -HA for review and approval. The CDC -HA shall have the right to review and approve or disapprove all aspects of the Project Design and Plan for each of the Phase 1 Project and the Phase 2 Project. Affordable Housing Developer acknowledges and agrees that the CDC -HA is entitled to approve or disapprove the Project's Design and Plan for each of the Phase 1 Project and the Phase 2 Project in order to satisfy the CDC-HA's obligation to promote a high level of design which will impact the surrounding development, and to provide an environment for the social, economic and psychological growth and well-being of the citizens of the City, including but not limited to the residents of the Phase 1 Project and the Phase 2 Project. Notwithstanding the foregoing, CDC -HA understands and agrees that the fmal unit count in each of Phase 1 Project and Phase 2 Project shall be subject to change based on Affordable Housing Developer's based on the requirements of the available financing sources and financial feasibility. 302. Standards for Disapproval. The CDC -HA shall have the right to disapprove in its reasonable discretion any of the Project Design and Plan for each of the Phase.1 Project and the Phase 2 Project, as set forth in Section 300, above, including without limitation if the same do not conform to this Agreement or are otherwise incomplete. In the event the Project Design and Plan for either the Phase 1 Project and the Phase 2 Project is not approved, the CDC -HA shall state in writing provided to the Affordable Housing Developer the reasons for disapproval. Affordable Housing Developer, upon receipt of notice of disapproval from the CDC -HA, shall meet and confer regarding such portions and resubmit the revised Project Design and Plan to the CDC -HA for approval. The CDC -HA and Affordable Housing Developer agree to work together in good faith to resolve any disagreements and disputes regarding the Project Design and Plan. Neither Affordable Housing Developer, shall be entitled to any monetary damages or compensation as a result of the CDC-HA's disapproval or failure to approve or disapprove any Project Design and Plan. 303. Revisions. If Affordable Developer desires to propose any revisions to the CDC - HA -approved Project Design and Plan after approval, the Affordable Housing Developer shall submit such proposed changes to the CDC -HA. If the Project Design and Plan, as modified by the proposed changes, generally and substantially conforms to the requirements of the Project Design and Plan and this Agreement, the CDC -HA shall review the proposed changes and notify Affordable Housing Developer in writing within thirty (30) days after submission to the CDC -HA Page 25 of 61 whether the proposed change is approved or disapproved. The CDC -HA' s Executive Director is authorized to approve changes to the Project Design and Plan. Provided, however, the CDC -HA shall have no obligation to approve any change from the basic use of the Property for anything other than a multifamily, affordable housing project. 304. Defects in Plans. The CDC -HA shall not be responsible or liable in any way, either to Affordable Housing Developer or to any third parties, for any defects in the Project Design and Plan, or for any structural or other defects in any work done according to the approved Project Design and Plan, or for any delays caused by the review and approval processes established by this Section 300. Affordable Housing Developer shall hold harmless and indemnify CDC -HA, the City and their officers, employees, agents and representatives from and against any and all claims, demands and suits for damages to property or injuries to persons arising out of or in any way relating to the Property, including without limitation any defects in the Project Design and Plan, violation of any laws, and for defects in any work done according to the approved Project Design and Plan or for defects in work performed by Affordable Housing Developer or any contractor or subcontractor of Affordable Housing Developer. 305. Land Use Approvals. Before commencement of the work' or any works of improvement at the Property as contemplated under the Project Design and Plan, Affordable Housing Developer shall, at Affordable Housing Developer's sole expense, secure or cause to be secured any and all land use and other entitlements, permits and approvals which may be required for the Project Design Work and Plan by the City or any other governmental agency affected by such construction or work. Neither CDC -HA, nor the City shall be responsible in any way for, the processing of Developer's building permits or other permit applications with the City and the. execution of this Agreement does not constitute the granting of or a commitment to obtain any required land use permits, entitlements or approvals. 306. Deadline for Completion of Construction. The construction of the Phase 1 Project and the Phase 2 Project shall be completed substantially in accordance with the Project's Design and Plan not later than twenty-six (26) months from the Closing for the Phase 1 Project or the Closing for the Phase 2 Project, as applicable. Failure to complete all of work contemplated under the Project Design and Plan for the Phase 1 Project or the Project Design and Plan for the Phase 2 Project, as applicable, shall, inter alia, be a default by the then owner of the Phase 1 Project or the Phase 2 Project respectively, entitling the CDC -HA to exercise all of its rights and remedies, including without limitation foreclosure of the Phase 1 Project Deed of Trust or Phase 2 Project Deed of Trust, as applicable. 306. Cost of Project. All costs of the Phase 1 Project and Phase 2 Project whatsoever shall be borne by Affordable Housing Developer, including without limitation the cost of planning, the payment of any required prevailing wages, if any, designing, developing and constructing the Phase 1 Project and the Phase 2 Project in accordance with the applicable Project's Design and Plan. 306.1 Project Budget. The Affordable Housing Developer has submitted the Initial Project Budget to CDC -HA. The Project Budget summarizes the current estimates of the sources and uses of funds for the complete development of each of the Phase 1 Project and the Page 26 of 61 Phase 2 Project. By its execution of this Agreement, CDC -HA has given its approval to the Initial Project Budget. While the Initial Project Budget has been prepared based on the best, good faith estimate of the Affordable Housing Developer of the costs which are likely to be incurred for the development of the Phase 1 Project and the Phase 2 Project, the parties recognize that events and circumstances not currently contemplated, some of which are outside of the control of the parties, could result in changes in the costs of developing one or both Projects, necessitating changes in the Project Budget. Changes in the Project Design and Plan could also be made during any public hearing or approval process which results in increased costs for the Project not contemplated in the Project Budget. Changes in costs could be occasioned by conditions found in the field which were not anticipated as of the date of execution of this Agreement, including changes (and delays which result from changes) as a result of onsite inspections. Due to the impact of other, competing demands for staff time, inspections themselves might be delayed: 306.2 Because of the specialized nature of the funding for the Project Design and Plan, unanticipated material changes could constitute a challenge to the Project completion and may cause additional costs to the Project unanticipated in the Initial Project Budget. Should the Affordable Housing Developer become aware of any such material fact or circumstance which will result in a material increase in the Project Design and Plan (a cost or costs will constitute a "material increase" if (i) alone or cumulatively, such costs result in increased expenses in excess of $100,000, but which expenses might be absorbed out of contingency funds; or (ii) alone or cumulatively, such costs result in an increase for a Phase in excess of $250,000 which cannot be paid from sources of funds identified in the Project Budget), the Affordable Housing Developer shall give written notice to CDC -HA, which notice shall identify the material change or changes, shall itemize the costs which the Affordable Housing Developer anticipates will result therefrom and shall request that CDC -HA take one or more of the following actions: i. Agree to the transfer of amounts between line items within each Project Budget. At the request of Affordable Housing Developer, and subject to the approval of CDC -HA, which will not be unreasonably withheld, conditioned or delayed, funds reflected in one line item of a Project Budget which are unexpended at the substantial completion of the work delineated therein may be transferred to the account and line item for contingencies, or, with the consent of CDC -HA, not to be unreasonably withheld, transferred directly to another account of another line item in the Project Budget. Page 27 of 61 ii. Approve modifications to the Project Design and Plan reasonably necessary or required to deal with such changed circumstances and material increases. Such modifications might include phasing or deferral of Project amenities until additional funding is available or secured, downsizing or eliminating Project design items or amenities, etc. All financing for the Project Design and Plan shall be subject to the review and approval of the CDC -HA, which review and approval shall, not be unreasonably withheld, conditioned or delayed. The CDC -HA shall respond within fifteen (15) days of Affordable Housing Developer's submission of any proposed financing. Affordable Housing Developer will be responsible for maximizing use of leveraged financing sources from other community development funding sources as available. The CDC-HA's approvals of any such modifications shall not be unreasonably withheld, conditioned or delayed. iii. Agree to allow the Affordable Housing Developer to obtain additional funding sufficient to pay such material increases. Such funding sources might, upon approval by CDC -HA, include CDC -HA support for applications for additional and/or new funding from additional or new governmental or private funding programs established for low and moderate income housing. Once the CDC -HA and the Affordable Housing Developer have agreed upon a final sources and uses for the Project Design and Plan, then the parties shall replace the Initial Project Budget with a final approved project budget (the "Final Project Budget"), which shall include development sources and uses and an operating budget. 307. Insurance Requirements. Affordable Housing Developer and each Owner, except for Health Center Developer, shall take out and maintain during the terms of each of the Declarations and shall cause its contractor and subcontractors to take out and maintain until completion, a comprehensive general liability policy in the amount of not less than $4,000,000 and not less than $2,000,000 in a single occurrence; provided that the use of umbrella/excess liability policies to achieve such limits will be acceptable, and a comprehensive automobile liability policy in the amount of $1,000,000 combined single limit, or such other policy limits as the CDC -HA may approve at its discretion, including contractual liability, as shall protect Affordable Housing Developer, City and CDC -HA from claims for such damages. Such policy or policies shall be written on an occurrence form. Affordable Housing Developer and each Owner shall also furnish or cause to be furnished to the CDC -HA evidence satisfactory to the CDC -HA that Affordable Housing Developer and each Owner, and any contractor with whom it has contracted for the performance of work on the Property or otherwise pursuant to this Agreement, carries workers' compensation insurance as required by law. Affordable Housing Developer and each Owner shall furnish a certificate of insurance countersigned by an authorized agent of the insurance carrier on a form approved by the CDC -HA setting forth the general provisions of the insurance coverage. This countersigned certificate shall name the City and CDC -HA and their respective officers, agents, and employees as additionally insured parties under the policy, and the certificate shall be accompanied by a duly executed endorsement evidencing such additional insured status. The certificate and endorsement by the insurance carrier shall contain a statement of obligation on the part of the carrier to notify the City and CDC -HA of any material change, cancellation or Page 28 of 61 termination of the coverage at least thirty (30) days in advance of the effective date of any such material change, cancellation or termination. Coverage provided hereunder by Affordable Housing Developer or each Owner shall be primary insurance and not be contributing with any insurance maintained by the City of CDC -HA, and the policyshall contain such an endorsement. The insurance policy or the endorsement shall contain a waiver of subrogation for the benefit of the City and CDC -HA. The required certificates shall be furnished by Affordable Housing Developer and each Owner prior to the Closing for the Phase 1 Project and the Closing for the Phase 2 Project, as applicable. 308. Indemnities. (a) Affordable Housing. The Affordable Housing Developer and each Owner, except for Health Center Developer, shall be responsible for all injuries to persons and/or all damages to real or personal property of the City, CDC -HA or others, caused by or resulting from the negligence and/or breach of this Agreement, by each Owner, the Affordable Housing Developer and their employees, subcontractors and/or their agents during the term of , this Agreement. The Affordable Housing Developer and each Owner, except for Health Center Developer, shall defend and hold harmless and indemnify the City, CDC -HA and all of their officers and employees from all costs, damages, judgments, expenses and claims to any third party resulting from the negligence and/or breach of this Agreement, by the Owner, Affordable Housing Developer and their directors, officers, partners, members, employees, subcontractors and/or their agents and assigns or any employee, director, officer, partners or member of Affordable Housing Developer or either Owner, arising out of the development of Site 1, and Site 2 and/or the breach of this Agreement, except those arising from the sole negligence or willful misconduct of the City or CDC -HA. Provided, the Phase 1 Project and the Phase 2 Project are constructed, owned and financed as separate developments, then this Section 308 shall apply with respect to the Phase 1 Owner only with respect to the Phase 1 Project and shall apply with respect to the Phase 2 Owner only with respect to the Phase 2 Project, i.e., The Phase 1 Owner shall not have any obligations or liability with respect to the Phase 2 Project and the Phase 2 Owner shall not have any obligations or liability with respect to Phase 1 Project. (b) Phase 3. The Health Center Developer shall be responsible for all injuries to persons and/or all damages to real or personal property of the City, CDC -HA or others, caused by or resulting from the negligence and/or breach of this Agreement, by the Health Center Developer and its employees, subcontractors and/or agents during the term of this Agreement. The Health Center Developer shall defend and hold harmless and indemnify the City, CDC -HA and all of their officers and employees from all costs, damages, judgments, expenses and claims to any third party resulting from the negligence and/or breach of this Agreement, by the Health Center Developer and its directors, officers, partners, members, employees, subcontractors and/or their agents and assigns or any employee, director, officer, partners or member of Health Center Developer, arising out of the development of Site 3 and/or the breach of this Agreement, except those arising from the sole negligence or willful misconduct of the City or CDC -HA. Page 29 of 61 309. Rights of Access. The Affordable Housing Developer and each Owner, except for Health Center Developer, agrees to allow the CDC -HA and its representatives to access the Property to review and inspect its activities under this Agreement as the CDC -HA shall require upon reasonable advance notice of no less than 48 hours. The CDC -HA shall monitor the Affordable Housing Developer's and each Owner's, except for Health Center Developer, activities without liability for said inspection and review. 310. Compliance With Laws. (a) Prevailing Wage and Other Labor Standards. The Affordable Housing Developer, Site 1 Owner, and Site 2 Owner each represents and warrants that during the term of this Agreement that it will pay not less than the minimum compensation set forth in the Federal Davis Bacon wage requirements, and shall comply with all. State prevailing wage requirements to the extent State prevailing wage requirements are applicable to the work. The Affordable Housing Developer and each Owner shall carry out the design and completion of the Scope of Development in conformity with all applicable laws, including all applicable state labor standards, the City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the Title 24 of the California Code of Regulations, 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. The Affordable Housing Developer and each- Owner hereby agrees to carry out development, construction and operation of the Property, including, without limitation, any and all public works (as defined by applicable law), in conformity with all applicable local, state and federal laws, including, without limitation, all applicable federal and state labor laws, including, without limitation, any requirement to pay State prevailing wages. The Affordable Housing Developer, Site 1 Owner, and Site 2 Owner shall pay not less than the minimum compensation set forth in the Federal Davis Bacon wages, regardless of whether the same would be legally required, but for this sentence. The Affordable Housing Developer and each Owner hereby expressly acknowledges and agrees that neither the City nor the CDC -HA has ever previously affirmatively represented to such Owner, Affordable Housing Developer or any of their contractor(s) in writing or otherwise, in a call for bids or otherwise, that the work to be covered by the bid or contract is or is not a "public work," as defined in Section 1720 of the Labor Code. The Affordable Housing Developer and each Owner hereby agrees that such party shall have the obligation to provide any and all disclosures, representations, statements, rebidding, and/or identifications which may .be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. The Affordable Housing Developer and each Owner hereby agrees that such Owner shall have the obligation to provide and maintain any and all bonds to secure the payment of contractors (including the 'payment of wages to workers performing any public work) which may be required by the Civil Code, Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. The Affordable Housing Developer and each Owner hereby agrees that such party shall have the obligation, at such party's sole cost, risk and expense, to obligate any party as may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. The Affordable Housing Developer and each Owner shall Page 30 of 61 indemnify, protect, defend and hold harmless the City, the CDC -HA and their respective officers, employees, contractors and agents, with counsel reasonably acceptable to the City and the CDC - HA, from and against any and all loss, liability, damage, claim, cost, expense, and/or "increased costs" (including labor costs, penalties, reasonable attorneys' fees, court and litigation costs, and fees of expert witnesses) which, in connection with the completion of the Scope of Development, including, without limitation, any and all public works (as defined by applicable law), results or arises in any way from any of the following: (i) the noncompliance by the Affordable Housing Developer or such Owner of any applicable local, state and/or federal law, including, without limitation, any applicable federal and/or state labor laws (including, without limitation, if applicable, the requirement to pay state prevailing wages); (ii) the implementation of Sections 1726 and 1781 of the Labor Code, as the same maybe enacted, adopted or amended from time to time, or any other similar law; (iii) failure by the Affordable Housing Developer or such Owner to provide any required disclosure, representation, statement, rebidding and/or identification which may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law; (iv) failure by the Affordable Housing Developer or such Owner to provide and maintain any and all bonds to secure the payment of contractors (including the payment of wages to workers performing any public work) which may be required by the Civil Code, Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law; and/or (v) failure by the Affordable Housing Developer or such Owner to obligate any party as may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. It is agreed by the parties that, in connection with the development, construction and operation of the Property, including, without limitation, any public work (as defined by applicable law), the Affordable Housing Developer and each Owner shall bear all risks of payment or non-payment of state prevailing wages and/or the implementation of Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, and/or any other provision of law. "Increased costs" as used in this Section shall have the meaning ascribed to it in Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time. The foregoing indemnity shall survive terminationof this Agreement. Provided, the Phase 1 Project and the Phase 2 Project are constructed, owned and financed as separate developments, then this Section 309 shall apply with respect to the Owner of Phase 1 Project only with respect to the Phase 1 Project and shall apply with respect to the Owner Phase 2 Project only with respect to the Phase 2 Project. Notwithstanding anything to the contrary herein, in no event shall this Section 310(a) be construed to require Health Care Developer and Phase 3 Project to pay comply with Federal David Bacon wage requirements or State prevailing wage requirements, provided such prevailing wage requirements do not otherwise apply to the Phase 3 Project. (b) Workforce Enhancement Initiative. The purpose of this Section 310(b) relating to Workforce Enhancement Initiatives is to set forth guidance so that all construction work relating to Phase 1 Project and Phase 2 Project pursuant to this Agreement may proceed continuously and without interruption, thereby assuring the timely and cost-effective completion of the Phase 1 Project and Phase 2 Project, and to support the efforts of CDC -HA to strive to implement a form of construction career training through mentorship and opportunities for targeted workers andlocal apprenticeship and pre -apprentice programs to the extent there is workforce interest and is financially feasible for the Affordable Housing Developer with respect to the Phase 1 Project and Page 31 of 61 Phase 2 Project intended under this Agreement. For avoidance of doubt, this Section shall not apply to the Health Center Developer and the Phase 3 Project. (i) Management Rights. The Affordable Housing Developer and its General Contractor retain the full and exclusive authority for the management of its operations, as set forth in this Section, unless expressly limited or required by a specific Section of this Section. The Contractor shall direct the workforce at its sole prerogative, including but not limited to the hiring, promotion, transfer, layoff, discipline or discharge for just cause of its employees; the selection of foremen and general foremen; the assignment and schedule of work; the promulgation of reasonable work rules; and, the requirement of overtime work, the determination of when it will ' be worked, and the number and identity of employees engaged in such work. No rules, customs, or practices which limit or restrict productivity, efficiency or the individual and/or joint working efforts of employees shall be permitted or observed. (ii) Wages. Affordable Housing Developer acknowledges and agrees Phase 1 Project and Phase 2 Project shall pay Davis -Bacon Wages in accordance with Section 309(a) of this Agreement. . (iii) Apprentices. The parties recognize the need to maintain continuing support of the programs designed to develop adequate numbers of competent workers in the construction industry, the obligation to capitalize on the availability of the local work force, and the opportunities to provide continuing work under the construction program. To these ends, the parties will use good faith efforts to facilitate, encourage, and assist an established apprenticeship program to commence and progress in labor/management apprenticeship and/or training programs during the course of construction on the Phase 1 Project and Phase 2 Project. (iv) Local Hires. The Affordable Housing Developer will use good faith efforts in causing its General Contractor to ensure that individuals and firms located in or owned in substantial part by persons residing in the area of the City of National City are used whenever possible, so long as the individual or firm is qualified to perform such work, and competitive in price. Such efforts (to the extent feasible and permitted by law) shall include, but shall not be limited to: (i) including such firms, when qualified, on solicitation mailing lists; (ii) encouraging their participation through direct solicitation of proposals whenever they are a potential source; (iii) dividing total subcontract requirements, when economically feasible, into smaller tasks or quantities to permit maximum participation by such firms; and (iv) establishing delivery schedules, where the requirement permits, which encourages participation by such firms. (v) Limits. This Section shall apply and be limited to the construction work relating to the Phase 1 Project and Phase 2 Project to be performed by the General Contractor selected and engaged by the Affordable Housing Developer. A copy of this Section shall be provided to the General Contractor to set forth guidance in hiring and other related labor practices. following: (vi) Items specifically excluded from the scope of this Section include the Page 32 of 61 a. This Section 309(b) does not apply to the work of non -manual employees, including, but not limited to, superintendents, supervisors, staff engineers, timekeepers, mail carriers, clerks, office workers, messengers, guards, safety personnel, emergency medical and first aid technicians, and other professional, engineering, consultants, administrative, supervisory, executive and management employees;. b. The Section 309(b) shall not apply to state inspectors or other public employees, post -construction tenant improvements, emergency work, non -construction support services, creation and installation of art work, future maintenance, and architectural, engineering, surveying or inspection services; c. This Section 309(b) shall serve as guidance for work intended to be covered on or after the Effective Date of this Agreement, and is not intended to, and shall not govern, the construction of any project other than the Phase 1 Project and Phase 2 Project under this Agreement; such work; d. Off -site maintenance of leased equipment and on -site supervision of e. Off -site laboratory work for testing; f. Work performed by employees of an Original Equipment Manufacturer ("OEM") or vendor on the OEM's or vendor's equipment, if required by the warranty agreement between the OEM or vendor and the Primary Employer or Owner in order to maintain the warranty or guarantee on such equipment, and provided that the warranty agreement is the OEM's or vendor's standard warranty agreement for such equipment and is consistent with industry practice; g. All work related to the delivery, unloading, moving and installation of the Affordable Housing Developer's individual, unattached pieces of furniture, furnishings, equipment or supplies; h. All hauling from and delivery to the Phase 1 Project and Phase 2 Project and deliveries of all materials required to complete the Phase 1 Project and Phase 2 Project, except that the hauling/delivery of soil, sand, gravel, aggregate, rocks, concrete, asphalt, excavation materials, fill material and construction debris; i. The delivery, placement, servicing and removal of all temporary toilets, site fencing, storage units, temporary offices and trash/recycling dumpsters, or any other equipment or materials needed for the operation of the construction oversight. 311. Nondiscrimination in Employment. Affordable Housing Developer and each Owner certifies and agrees that all persons employed or applying for employment by it, its affiliates, subsidiaries, or holding companies, and all subcontractors, bidders and vendors, are and will be treated equally by it without regard to, or because of race, color, religion, ancestry, national origin, sex, age, pregnancy, childbirth or related medical condition, medical condition (cancer related) or physical or mental disability, and in compliance with Title VII of the Civil Rights Act Page 33 of 61 of 1964, 42 U.S.C. Section 2000, et seq., the Federal Equal Pay Act of 1963, 29 U.S.C. Section 206(d), the Age Discrimination in Employment Act of 1967, 29 U.S.C. Section 621, et seq., the Immigration Reform and Control Act of 1986, 8 U.S.C. Section 1324b, et seq., 42 U.S.C. Section 1981, the California Fair Employment and Housing Act, Cal. Government Code Section 12900, et seq., the California Equal Pay Law, Cal. Labor Code Section 1197.5, Cal. Government Code Section 11135, the Americans with Disabilities Act, 42 U.S.C: Section 12101, et seq., and all other anti -discrimination laws and regulations of. the United States and the State of California as they now exist or may hereafter be amended. Affordable Housing Developer and each Owner shall allow representatives of the CDC -HA access to its employment records related to this Agreement during regular business hour's to verify compliance with these provisions when so requested by the CDC -HA. 312. Taxes and Assessments. After each Closing, the respective Owner shall pay prior to delinquency all ad valorem real estate taxes and assessments on Site 1, Site 2, and Site 3, respectively. Each Owner shall remove or have removed any levy or attachment made after the Closing on the Phase 1 Project, Phase 2 Project or the Phase 3 Project, respectively, or any part thereof, or assure the satisfaction thereof within a reasonable time. 313. Liens and Stop Notices. Each Owner shall not allow to be placed on Site 1 or Site 2, as applicable, any part thereof any lien or stop notice. If a claim of a lien or stop notice is given or recorded affecting Site 1 or Site 2, as applicable, the Owner of such property shall, within thirty (30) days of such recording or service or within five (5) days of the CDC-HA's demand, whichever last occurs: (a) pay and discharge the same; (b) effect the release thereof by recording and delivering to the CDC -HA a surety bond in sufficient form and amount as approved by the CDC -HA in its sole discretion; or (c) provide the CDC -HA with other assurance which the CDC -HA deems, in its sole discretion, to be satisfactory for the payment of such lien or bonded stop notice and for the full and continuous protection of the CDC -HA from the effect of such lien or bonded stop notice. 314, Financing of the Project. 314.1 No Encumbrances Except Mortgages or Deeds of Trust. Except for Site 3, Mortgages and deeds of trust may be permitted only with the CDC-HA's prior written approval, and only for the purpose of securing loans of funds to be used for financing the Project Design and Plan work, and any other purposes deemed necessary and appropriate by the CDC -HA in connection with development under this Agreement. The Affordable Housing Developer and each Owner, except for Health Center Developer, shall notify the CDC -HA in advance of the execution or recordation of any mortgage or deed of trust. The Affordable Housing Developer and each Owner, except for Health Center Developer, shall not enter into any mortgage or deed of trust for financing without the prior written approval of the CDC -HA, which approval the CDC -HA agrees Page 34 of 61 to give if any such mortgage or deed of trust for financing is given to a responsible financing lending institution or person or entity, as determined by the CDC -HA in its reasonable discretion. 314.2 Right of CDC -HA to Cure Mortgage or Deed of Trust Default. In the event of a mortgage or deed of trust default or breach by the Affordable Housing Developer or an Owner other than Health Center Developer, the Affordable Housing Developer or such other Owner, as applicable, shall immediately deliver to the CDC -HA a copy of any mortgage holder's notice of default. The CDC -HA shall have the right but not the obligation to cure the default. In such event, the CDC -HA shall be entitled to reimbursement from the Affordable Housing Developer or the applicable Owner of all costs and expenses incurred by the CDC -HA in curing such default, including without limitation attorneys' fees. 315, Developer Fee. It is acknowledged and agreed that the Affordable Housing Developer may receive a developer fee as approved by the Executive Director of the CDC -HA up to the maximum allowed by the California Tax Credit Allocation Committee, and shall not be required to defer any such developer fee so long as there are sufficient financing sources to fund the construction of each of the Phase 1 Project or Phase 2 Project as contemplated by the Project Design and Plan. 316. Occupancy Monitoring and Inspection Fees; Records and Reports. Each year during the terms of each of the Declarations, the applicable Owner of Site 1 and Site 2 shall pay to the CDC -HA a flat annual fee of $30,000. Each such Owner, except for Health Center Developer, shall supply CDC -HA, annually, on May 31 st, of each year during the term of this Agreement, for the immediately prior calendar year, with such records and reports as are required and are requested by the CDC -HA to aid it in complying with its reporting and record keeping requirements. The records and reports include, but are not limited to the following: (a) Amount of funds expended pursuant to this Agreement; (b) Eligible tenant information, including yearly income verifications; (c) On -site inspection results; (d) Housing payments charged to tenants; (e) Affirmative marketing records; (f) Insurance policies and notices; (g) Equal Employment Opportunity and Fair Housing records; (h) Laborcosts and records; (i) Audited income and expense statement, balance sheet and statement of cash flows for the Developer; Page 35 of 61 (j) Federal and State income tax returns for the calendar year, ending on the preceding December 31st; (k) Annual budget of reserves for repair and replacement; (1) Annual certification and representation regarding status of all loans, encumbrances and taxes; (m) Such other and further information and records as the CDC -HA shall reasonably request in writing from the Developer. 317. Flood Insurance. The Affordable Housing Developer and each Owner represents, warrants, and certifies, pursuant to 24 CFR §92.358, that none of the Property is located within a Flood Plain or Flood Hazard Zone or Area, as indicated on a FEMA Map; or that the Property is located within a community participating in the National Flood Insurance Program and the Affordable Housing Developer or each Owner, as applicable, agrees to purchase and maintain flood insurance for the duration of the term of this Agreement. 318. Accessibility Standards. The Affordable Housing Developer and each Owner each represents and warrants that it will comply with all federal, state and local requirements and regulations concerning access to the units by the disabled and handicapped persons. 319. Study of Potential Sites for Future Market Rate Housing. Affordable Housing Developer agrees to study the feasibility of a future market -rate housing development (the "Market Rate Feasibility Analysis") at one of the following sites: (i) 1136 D Avenue, or (ii) 1415 D Avenue, or (iii) 1317 D Avenue. Affordable Housing Developer will complete the study and submit a report detailing the feasibility analysis within one year of execution of this Agreement. The parties to this Agreement acknowledge and agree that the outcome of the Market Rate Feasibility Analysis shall in no event affect CDC-HA's funding commitment with respect to Phase 1 Project or Phase 2 Project under this Agreement. The Affordable Housing Developer is not required to provide a market -rate housing development as a condition for CDC-HA's (a) commitment or funding of the Phase 1 Project or Phase 2 Project, (b) Ground Lease of Site 2, or (c) sale of the Kimball Public Right of Way. 400. Covenants and Restrictions. 401. Affordable Units. Developer covenants and agrees for itself, its successors, assigns, and every successor in interest to Site 1 and Site 2, or any part thereof, that upon the Closing and thereafter, Developer shall comply with the applicable Declaration for the period of time specified herein. The obligation of the CDC -HA to close on Escrow is conditioned upon the execution, and recordation of the Declaration against Site 1 and Site 2. The Declarations shall, in the aggregate, contain housing payment and income level restrictions for not less than 15 Extremely Low Income Households, 15 Very Low Income Households, 88 Low Income Households and 25 80% AMI households. In addition, the Declarations shall, in the aggregate, require not less than 12 studio Affordable Units, 30 one -bedroom Affordable Units, 64 two -bedroom Affordable Units, and 39 Page 36 of 61 three -bedroom Affordable Units. The requirements set forth herein may be changed only with the written consent of the Executive Director of the CDC -HA. 402. Maintenance Covenants. Each Owner represents and warrants with respect to itself and its own Project that after completion of Scope of Development, Phase 1 Project, Phase 2 Project, Phase 3 Project and all of the Affordable Units, as applicable, shall continually be maintained in a decent, safe and sanitary condition, and in good repair as described in 24 C.F.R. §5.703, and in a manner which satisfies the Uniform Physical Conditions Standards promulgated by the Department of Housing and Urban Development (24 C.F.R. § 5.705), as such standards are interpreted and enforced by the CDC -HA under its normal policies and procedures. The Affordable Housing Developer and each Owner warrants that all construction work shall meet or exceed the applicable local codes and construction standards, including zoning and building codes of the City of National City as well as the provisions of the Model Energy Code published by the Council of American Building Officials. The Affordable Housing Developer and each Owner hereby consents to periodic inspection by the CDC -HA' s designated inspectors and/or designees during regular business hours and upon reasonable advance notice of no less than 48 hours, including the Code Enforcement Agents of the City, to assure compliance with all applicable zoning, building codes, regulations and property standards. 403. Obligation to Refrain from Discrimination. 403.1 State and Federal Requirements. The Affordable Housing Developer and each Owner Developer shall, at all times during the term of this Agreement, comply with all of the affirmative marketing procedures adopted by the CDC -HA. The Affordable Housing Developer and each Owner Developer shall maintain records to verify compliance with the applicable affirmative marketing procedures and compliance. Such records are subject to inspection by the CDC -HA during regular business hours upon five (5) days written notice. 403.2 Additional Requirements. The Affordable Housing Developer and each Owner hereby agrees to comply with the Title VII of the Civil Rights Act of 1964, as amended, the California Fair Employment Practices Act, and any other applicable Federal and State laws and regulations. 403,3 Fair Housing Laws. All activities carried out by the Affordable Housing Developer, any Owner and/or their agents shall be in accordance with the requirements of the Federal Fair Housing Act. The Fair Housing Amendments Act of 1988 became effective on March 12, 1989. The Fair Housing Amendments Act of 1988 and Title VIII of the Civil Rights Act of 1968, taken together, constitute the Fair Housing Act. The Fair Housing Act provides protection against the following discriminatory housing practices if they are based on race, sex, religion, color, handicap, familial status, or national origin: denying or refusing to rent housing, denying or refusing to sell housing, treating differently applicants for housing, treating residents differently in connection with terms and conditions, advertising a discriminatory housing preference or limitation, providing false information about the availability of housing, harassing, coercing or intimidating people from enjoying or exercising their rights under the Fair Housing Act, blockbusting for profit, persuading owner to sell or rent housing by telling them that people of a particular race, religion, etc. are moving into the neighborhood, imposing different terms for loans Page 37 of 61 for purchasing, constructing, improving, repairing, or maintaining a home, or loans secured by housing; denying use or participation in real estate services, e.g., brokers' organizations, multiple listing services, etc. The Fair Housing Act gives HUD the authority to hold administrative hearings unless one of the parties elects to have the case heard in U.S. District Court and to issue subpoenas. Both civil and criminal penalties are provided. The Fair Housing Act also provides protection for people with disabilities and proscribes those conditions under which senior citizen housing is - exempt from the prohibitions based on familial status. The following State of California Laws also govern housing discrimination and shall be complied with by Developer: Fair Employment and Housing Act, Unruh Civil Rights Act of 1959, Ralph Civil Rights Act of 1976, and Civil Code Section 54.1. 405. Nondiscrimination Covenants. The Affordable Housing Developer and each Owner covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of, any person or group of persons on the basis of race, color, creed, religion, sex, sexual orientation, marital status, national origin, ancestry, familial status, source of income or disability of any person in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall any of them or any person claiming under or through it establish or permit any such practice or practices of discrimination 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, with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property. The foregoing covenants shall run with the land. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) Deeds. In deeds: "The grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, sexual orientation, disability, medical condition, familial status, source of income, marital status, national origin or ancestry in the sale; lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) Leases. In leases: "The lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, religion, sex, sexual orientation, disability, medical condition, familial status, source of income, marital status, national origin or ancestry in the leasing, subleasing, renting, transferring, use, occupancy, tenure or enjoyment of the land herein leased, nor shall lessee itself, or any person claiming under or through it, establish or permit such practice or practices of discrimination or segregation with reference to the selection, Page 38 of 61 location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the land herein leased." (c) Contracts. In contracts for the rental, lease or sale of the Phase 1 Project, Phase 2 Project or the Phase 3 Project: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, sexual orientation, disability, medical condition, familial status, source of income, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation' with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land." 406. Effect of Violation of the Terms and Provisions of this Agreement: The CDC -HA is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land, for and in its own right and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit this Agreement and the covenants running with the land have been provided, without regard to whether the CDC -HA has been, remains or is an owner of any land or interest therein in the Property. The CDC -HA shall have the right, if this Agreement or its covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and covenants may be entitled. 500. Defaults and Remedies. Provided, the Phase 1 Project and the Phase 2 Project are constructed, owned and financed as separate developments, then this Section 500, including without limitation the subsections set forth below, shall apply to the Owner of Phase 1 Project only with respect to the Phase 1 Project and shall apply to the Owner of Phase 2 Project only with respect to the Phase 2 Project, i.e., the Owner of Phase 1 Project shall not have any obligations or liability with respect to the Phase 2 Project and the Owner of Phase 2 Project shall not have any obligations or liability with respect to Phase 1 Project. 501, Default Generally. Subject to Section 603.2 of this Agreement, failure by the CDC - HA, Affordable Housing Developer or any Owner to perform any action or covenant required by this Agreement within the time periods provided herein following notice and failure to cure as described hereafter, constitutes a "Default" under this Agreement. A party claiming a Default shall give written notice of Default to the other party specifying the alleged Default. Except as otherwise expressly provided in this Agreement, the claimant shall not institute any proceeding against any other party, and the other party shall not be in Default if: (i) such alleged Default is cured thirty (30) days from receipt of such written notice: or (ii) if the alleged Default is such that it is not capable of being cured within thirty (30) days, but corrective action is initiated within thirty (30) days and the allegedly defaulting party diligently and in good faith works to effect a cure as soon as possible. 501.1 Notwithstanding anything to the contrary contained in this Agreement, after any Closing, then prior to any action to enforce this Agreement by the CDC -HA, with respect to the phase which was the subject of such Closing, then provided the applicable Owner's limited Page 39 of 61 partner has delivered written notice of such limited partner's address for notice, the CDC -HA shall give such Owner's limited partner (the "Tax Credit Partner") notice and opportunity to cure for a period of not less than (a) fifteen (15) days if a monetary default, and (b) thirty (30) days if a nonmonetary default; provided, however, if in order to cure such a default, Tax Credit Partner reasonably determines thatit must remove the general partner of such Owner, Tax Credit Partner shall so notify CDC -HA and so long as Tax Credit Partner is diligently and continuously attempting to so remove such general partner, Tax Credit Partner shall have until the date thirty (30) days after the effective date of the removal of the general partner or general partners to cure such default but in no event more than one (1) year. 502, Institution of Legal Actions. In addition to any other rights or remedies and subject to the restrictions otherwise set forth in this Agreement, any party may institute an action at law or equity to seek specific performance of the terms of this Agreement, or to cure, correct or remedy any Default, to recover damages for any Default, or to obtain any other remedy consistent with the purpose of this Agreement. Such legal actions must be instituted in the County of San Diego, State of California, downtown branch, or in the District of the United States District Court in the County of San Diego. 503. Entry and Vesting of Title in CDC -HA Prior to Completion of Construction. 503.1 Right of Reentry. In addition to all other rights and remedies the CDC -HA may have at law or in equity, the CDC -HA has the right, at its election, to enter and take possession of Site 1 or Site 2, as applicable, and all improvements thereon, and terminate and revest the fee interest in the Property or the Leasehold in the CDC -HA, as applicable, if after the applicable Closing, the applicable Owner: (a) fails to start the Scope of Development work as required by this Agreement for a period of thirty (30) days after written notice thereof from CDC -HA; or (b) abandons or substantially suspends the Scope of Development work required by this Agreement for a period of thirty (30) days after written notice thereof from CDC -HA, subject to any extensions which may be agreed upon pursuant to Section 602 herein; or (c) transfers or suffers any involuntary transfer of Site 1 or Site 2, as applicable, or any part thereof in violation of contrary to the provisions of this Agreement. 503.2 Limitations on Right of Entry. Such right to enter and vest shall be subject to and be limited by and shall not defeat, render invalid or limit any mortgage or deed of trust permitted by this Agreement that is senior to the Phase 1 Project Deed of Trust or Phase 2 Project Deed of Trust, as applicable. 503.3 Termination of Right of Entry. The CDC-HA's right to enter and take possession of the Site 1 or Site 2, as applicable, and all improvements thereon, and terminate and revestsame in the CDC -HA, shall terminate upon the timely completion of the Scope of Development work for the Phase 1 Project or Phase 2 Project, as applicable. Page 40 of 61 504. Rights and Remedies are Cumulative. 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 times, of any other rights or remedies for the same default or any other default by the other party. 505. Inaction Not a Waiver of Default. Any failures or delays by any party in asserting any of its rights and remedies as to any Default shall not operate as a waiver of any Default or of any such rights or remedies, or deprive either such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies shall govern the interpretation and enforcement of this Agreement. 506. Default Relating to Phase 3 Project. For avoidance of doubt, the Scope of Development for the Health Center and financing for such Scope of Development shall be the sole responsibility of Health Center Developer. In all events, the Affordable Housing Developer and each Owner shall not be liable or responsible for any default on the part of the Health Center Developer under this Agreement or any other agreement relating to the development of the Health Center between Health Center Developer and CDC-HC. 600. General Provisions. 601. Notices, Demands and Communications Between the Parties. All notices under this Agreement shall be in writing and sent (a) by certified or registered U.S. mail, return receipt requested, (b) overnight by a nationally recognized overnight courier such as UPS Overnight or FedEx, or (c) by personal delivery. All notices shall be effective upon receipt (or refusal to accept delivery). All notices shall be delivered to the following addresses or such other addresses as changed by any party from time to time by written notice to the other parties hereto. To CDC -HA: Community Development Commission - Housing Authority of the City of National City 1243 National City Boulevard National City, CA 91950 Attention: Executive Director To Affordable c/o Community HousingWorks Housing 3111 Camino del Rio North, Suite 800 Developer San Diego, CA 92108 and Owner: Attention: President and CEO And with a copy to: Downs Pham & Kuei LLP 235 Montgomery Street, 30th Floor San Francisco; CA 94010 Attention: Irene C. Kuei Page 41 of 61 To Health, San Ysidro Health Center 1601 Precision Park Lane Developer: San Diego, CA 92173 Attention: President & CEO And with a copy to: Wingert, Grebing, Brubaker & Juskie, LLP 600 W. Broadway, 12th Floor San Diego, CA 92101 Attention: Stephen C. Grebing, Esq. 602. Enforced Delay; Extension of Times of Performance. In addition to specific provisions of this Agreement, performance by any party hereunder shall not be deemed to be in Default, and all performance and other dates specified in this Agreement shall be extended, where delays or Defaults are due to: war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; pandemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; acts or omissions of the other party; or any other causes beyond the control and without the fault of the party claiming an extension of time to perform. Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the 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 party within five (5) days of the commencement of the cause. Times of performance under this Agreement may also be extended in writing by the mutual agreement of Executive Director of the CDC -HA and Affordable Housing Developer. 603. Transfers of Interest in Property or Agreement. 603.1 Prohibition. The qualifications and identity of Affordable Housing Developer and each Owner are of particular concern to the CDC -HA. It is because of those qualifications and identity that the CDC -HA has entered into this Agreement with Affordable Housing Developer and Health Center Developer. During the term of this Agreement, the terms of the Declaration, and during the terms of the Ground Lease, no voluntary or involuntary successor in interest of Affordable Housing Developer or any Owner shall acquire any rights or powers under this Agreement, nor shall Affordable Housing Developer or any Owner, except for Health Center Developer, make any total or partial sale, transfer, conveyance, assignment, subdivision, refinancing or lease of the whole or any part of the Property, except for Site 3, or the improvements thereon without prior written approval of the CDC -HA, except as expressly set forth herein. Any proposed total or partial sale, transfer, conveyance, assignment, subdivision, refinancing or lease of the whole or any part of the Property, except for Site 3, or the improvements thereon, other than those permitted in Section 603.2, will entitle CDC -HA to its right of reentry and revesting as set forth in Section 505 hereof. For the reasons cited above, Affordable Housing Developer and each Owner, except for Health Center Developer, represents and agrees for itself, each partner and any successor in interest to itself that without the prior written approval of the CDC -HA, there shall be Page 42 of 61 no significant change in the ownership of Affordable Housing Developer or any Owner, except for Health Center Developer, or in the relative proportions thereof, or with respect to the identity of the parties in control of Affordable Housing Developer or any Owner, except for Health Center Developer, or the degree thereof, by any method or means; provided, however, that a change in one or more constituent partners of Site 1 Owner or Site 2 Owner is permitted so long as Affordable Housing Developer remains in control of the day to day matters of one of the general partners of Owner. Affordable Housing Developer and each Owner, except for Health Center Developer, shall promptly notify the CDC -HA of any and all changes whatsoever in the identity of the parties in control of the same or the degree thereof, of which it or any of its officers have been notified or otherwise have knowledge or information. Any change (voluntary or involuntary) in the composition, management or control of Affordable Housing Developer or any Owner, except for Health Center Developer, shall be a Default, except as otherwise permitted hereunder. 603.2 Permitted Transfers. Notwithstanding any other provision of this Agreement to the contrary, the CDC -HA approval of an assignment of this Agreement or conveyance of Site 1 or Site 2 or the improvements thereon, or any part thereof, will be granted in connection with any of the following, subject to the CDC -HA and the applicable party executing appropriate documents of transfer which contain any exceptions or reservation of rights permitted under this Agreement (each a "Permitted Transfer"): (a) the leasing of one or more Affordable Units to an occupant in compliance with the Declaration; (b) transfer of up to a Ninety -Nine and Ninety -Nine Hundredths Percent (99.99%) limited interest in the Site 1 Owner or Site 2 Owner to a tax credit investor partner in connection with a tax credit syndication; (c) transfer by the tax credit investor partner of the Site 1 Owner or Site 2 Owner of such tax credit investor partner's interest to an entity in which the tax credit investor partner or its affiliate manages and controls, directly or indirectly, the management decisions of such entity in connection with the tax credit syndication; (d) The conveyance or dedication of any portion of the Property to the City or other appropriate governmental agency, or the granting of easements or permits to facilitate completion of the Scope of Development. (e) Any conveyance for financing purposes (subject to such fmancing being specifically allowed under this Agreement), including the grant of a deed of trust to secure the funds necessary for completion of the Scope of Development. (f) any transfer directly resulting from the foreclosure of a deed of trust permitted under subsection (e), above; or (g) in the event all of general partners of any Owner are removed by the investor limited partner of such Owner for cause following default under such Owner's partnership agreement, the CDC -HA hereby approves the transfer of the general partners' Page 43 of 61 interests to a 501(c)(3) tax exempt nonprofit corporation and/or an affiliate of the investor limited partner of such Owner selected by the investor limited partner of such Owner and approved by the CDC -HA, which approval shall not be unreasonably withheld, conditioned or delayed; or (h) Either (i) the exercise by a 501(c)(3) tax exempt nonprofit corporation affiliate of Affordable Housing Developer of its option and right of first refusal to be granted by Site 1 Owner upon the closing of the tax credit syndication for Phase 1, or (ii) the exercise by a 501(c)(3) tax exempt nonprofit corporation affiliate of Affordable Housing Developer of its option and right of first refusal to be granted by Site 2 Owner upon the closing of the tax credit syndication for Phase 2. 603.3 Successors and Assigns. All of the terms, covenants and conditions of this Agreement shall be binding upon Affordable Housing Developer, each Owner, except for Health Center Developer, and each of their permitted successors and assigns. Whenever the term "Affordable Housing Developer," "Affordable Housing Developer" or "Owner" is used in this Agreement, such term shall include any other permitted successors and assigns as herein provided, except for Health Center Developer. 603.4 Assignment by the CDC -HA. The CDC -HA may assign or transfer this Agreement in its entirety, or any of its rights or obligations hereunder. 604. Non -Liability of Officials and Employees. 604.1 CDC -HA. No member, official or employee of the City or CDC -HA shall be personally liable to Affordable Housing Developer, any Owner, or any successor in interest, in the event of any Default or breach of this Agreement or for any amount which may become due to Affordable Housing Developer, any Owner or any of their successors, or on any obligations under the terms of this Agreement. 604.2 Affordable Housing Developer and Owners. No member, directors, official or employee of the Affordable Housing Development or any Owner shall be personally liable to the City or CDC -HA, or any successor in interest, in the event of any Default or breach of this Agreement or for any amount which may become due to the City or CDC -HA or its successors, or on any obligations under the terms of this Agreement. 605. Relationship Among the CDC -HA, Affordable Housing Developer and Each Owner. It is hereby acknowledged that the relationship among the CDC -HA, Affordable Housing Developer and each Owner is that of independent contractors and not that of a partnership or joint venture and that the CDC -HA, Affordable Housing Developer and each Owner shall not be deemed or construed for any purpose to be the agent of the other. The Affordable Housing Developer, Site 1 Owner and Site 2 Owner each agrees to indemnify, hold harmless and defend the CDC -HA and Health Center Developer from any claim made against the CDC -HA or Health Center Developer arising from a claimed relationship of partnership or joint venture among the CDC -HA, Health Center Developer, Affordable Housing Developer or Owner. The Health Center Developer agrees to indemnify, hold harmless and defend the CDC -HA and Affordable Housing Page 44 of 61 Developer from any claim made against the CDC -HA or Affordable Housing Developer arising from a claimed relationship of partnership or joint venture among the CDC -HA, Health Center Developer, Affordable Housing Developer or Owner. 606. CDC -HA Approvals and Actions. Whenever a reference is made herein to an action or approvalto be undertaken by the CDC -HA, the Executive Director of the CDC -HA or his or her designee is authorized to act on behalf of the CDC -HA unless specifically provided otherwise or the context should require otherwise. 607. Counterparts. This Agreement may be signed in multiple counterparts which, when. signed by all parties, shall constitute a binding agreement. 608. Integration. This Agreement contains the entire understanding between the parties relating to the subject matter of this Agreement. All prior or contemporaneous agreements, understandings, representations and statements, oral and written, are merged in this Agreement and shall be of no further force or effect. Each party is entering this Agreement based solely upon the representations set forth herein and upon each party's own independent investigation of any and all facts such party deems material. All exhibits referred to in this Agreement are hereby incorporated in this Agreement by this reference, regardless of whether or not the exhibits are actually attached to this Agreement. The Recitals to this Agreement are hereby incorporated in this Agreement by this reference. 609. No Real Estate Brokerage Commissions. The CDC -HA, Health Center Developer and Affordable Housing Developer each represent and warrant to the others that no broker or finder is entitled to any commission or finder's fee in connection with Site 2 or the Kimball Public Right of Way. The parties agree to defend and hold harmless the other party from any claim to any such commission or fee from any broker, agent or finder with respect to this Agreement which is payable by such party. 610. Attorneys' Fees. The parties agree that the prevailing party in litigation for the breach and/or interpretation and/or enforcement of the terms of this Agreement shall be entitled to their expert witness fees, if any, as part of their costs of suit, and reasonable attorneys' fees as may be awarded by the court, pursuant to California Code of Civil Procedure ("CCP") Section 1033.5 and any other applicable provisions of California law, including, without limitation, the provisions of CCP Section 998. 611. Titles and Captions. Titles and captions are for convenience of reference only and do not define, describe or limit the scope or the intent of this Agreement or of any of its terms. References to section numbers are to sections in this Agreement, unlessexpressly stated otherwise. 612. Interpretation. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall be deemed to include the others where and when the context so dictates. The word "including" shall be construed as if followed by the words "without limitation." This Agreement shall be interpreted as though prepared jointly by both parties. Page 45 of 61 613. No Waiver. A waiver by any party of a breach of any of the covenants, conditions or agreements under this Agreement to be performed by the other party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions of this Agreement. 614. Modifications. Any amendment, alteration, change or modification of or to this Agreement, in order to become effective, shall be made in writing and in each instance signed on behalf of each party (any amendment, alteration, change or modification of this Agreement on behalf of the CDC -HA, including without limitation changes. to the economic terms of this Agreement and its exhibits, shall be made on behalf of the CDC -HA by the Executive Director of the CDC -HA in such Executive Director's sole discretion), 615, Severability. If any term, provision, condition or covenant of this Agreement or its application to any party or circumstances shall be held, to any extent, invalid or unenforceable, the remainder of this Agreement, or the application of the term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law. 616. Computation of Time. The time in which any act is to be done under this Agreement is computed by excluding the first day (such as the day escrow opens), and including the last day, unless the last day is a holiday or Saturday or Sunday, and then that day is also excluded. The term "holiday" shall mean all holidays as specified in Section 6700 and 6701 of the California Government Code. If any act is to be done by a particular time during a day, that time shall be Pacific Time Zone time. - 617. Legal Advice. Each party represents and warrants to the other the following: they have carefully read this Agreement, and in signing this Agreement, they do so with full knowledge of any right which they may have; they have received independent legal advice from their respective legal counsel as to the matters set forth in this Agreement, or have knowingly chosen not to consult legal counsel as to the matters set forth in this Agreement; and, they have freely signed this Agreement without any reliance upon any agreement, promise, statement or representation by or on behalf of the other parties, or their respective agents, employees, or attorneys, except as specifically set forth in this Agreement, and without duress or coercion, whether economic or otherwise. 618, Time of Essence. Time is expressly made of the essence with respect to the performance by the CDC -HA, Health Center Developer and Affordable Housing Developer of each and every obligation and condition of this Agreement. • 619. Cooperation. Each party agrees to cooperate with the other in this transaction and, in that regard, to sign any and all documents which may be reasonably necessary, helpful, or appropriate to carry out the purposes and intent of this Agreement including, but not limited to, releases or additional agreements. 620. Conflicts of Interest. No member, official or employee of the City or the CDC -HA shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, Page 46 of 61 official or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. 621. Exhibits and Recitals Incorporated. All exhibits referred to in this Agreement are hereby incorporated in this Agreement by this reference, regardless of whether or not the exhibits are actually attached to this Agreement. The recitals to this Agreement are hereby incorporated in this Agreement by this reference. 622. Applicable Law. The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 623. Authority to Sign. All individuals signing this Agreement for a party which is a corporation, limited liability company, partnership or other legal entity, or signing under a power of attorney, or as a trustee, guardian, conservator, or in any other legal capacity, covenant to the CDC -HA that they have the necessary capacity and authority to act for, sign and bind the respective entity or principal on whose behalf they are signing. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above. CDC -HA: Community Development Commission -Housing Authority of the City of National City By: Brad , Executive Director APPROVED AS TO FORM: Angil P Morris -Jones, City Attorney CDC -HA General Counsel By: S CONTINUED ON FOLLOWING PAGE] Page 47 of 61 AFFORDABLE HOUSING DEVELOPER: Community HousingWorks, a California; onprofi 4 blic b-nefit c+rporation By: Mary Ja i : Jagod Senior ice Pres [SIGNATURES CONTINUED ON FOLLOWING PAGE[ HEALTH CENTER DEVELOPER: Centro De Salud De La Comunidad De San Ysidro, Inc., a California nonprofit public benefit corporation, dba San Ysidro Health By: Kev n Mattson President & CEO 49 of 61 EXHIBIT A PARCEL MAP Page 50 of 61 • SITE 2 RESIDENTIAL ;Dr! 4 SITE 1 RESIDENTIAL WAY 14TH ST M 15157 • • • 1 NM fkgr�,y y,. i, '1 $'‘ \\\Na \`'�ny� CAN 1' TzE 41.X(S1NU0DIN+N[LOT .OAIIONS Oi seov.D05 5.50.14 S W PA 11 ANO NANO.I Of Ort WOG OPMVIVACATION ALL a.410% ALL Of 56 .wcl, ronaNS 0.1.3005 56O46611 ANO 1 .1wNa INIAWrt OiwArvAGNON SHEET 1 OF 1 LOT EXHIBIT KIMBALL HIGHLAND KIMBALL WAY/14TH ST, NATIONAL CITY, CA EXHIBIT B INITIAL PROJECT BUDGET Page 52 of 61 TABLE 1 PROJECT DESCRIPTION KIMBALL HIGHLANDS MASTER PLAN CITY OF NATIONAL CITY I. Site Area II. Gross Building Area Net Residential Area Common Area (1) Circulation (1) Residential Gross Building Area Add: Senior Center Total Gross Building Area 111. Construction Type/ Number of Stories IV. Unit Mix Studio One Bedroom Two Bedroom Three Bedroom Number of Units V. Density VI. Affordability Mix Units @ 30% of AMI Units @ 50% of AMI Units @ 60% of AMI Units @ 70% of AMI Manager Unit Total/Average Average Affordability VII. Parking (1) Residential Senior Center Total SITE ONE 1320 Highland Parking Lot 1.6 Acres Zoned: MXD-2 71,850 SF 6,981 SF 18.871 SF 97,702 SF 0 SF 97,702 SF 74% 7% 19% 100% Type V - 4 stories over Type I - 4 stories Number of Units 12 Units 20 Units 29 Units 24 Units 85 Units 14% 24% 34% 28% 100% 53 Units/Acre 10 Units 9 Units 50 Units 15 Units 1 Unit 85 Units Average Unit Size (1) 470 SF 650 SF 850 SF 1.190 SF 845 SF 57% AMI (Excl. Manager Unit) Structured - 4 Levels 90 Spaces 1.1 Spaces/Unit 0 Spaces -- 90 Spaces 330 SF/Space (1) Per Developer correspondence dated 9/3/20. (2) Includes 17 tuck -under spaces for residential use. SITE TWO 1221 D Avenue 1.8 Acres 54,100 SF 5,902 SF 12.640 SF 72,642 SF 8,834 SF 81,476 SF Zoned: RM-3 74% 8% 17% 100% Type V - 3 stories over Type I - 1 story Number Average of Units Unit Size (1) 0 Units 10 Units 35 Units 15 Units 60 Units 33 Units/Acre 0% 470 SF 17% 650 SF 58% 850 SF 25% 1.,33 SF 100% 902 SF 5 Units 8% 6 Units 10% 38 Units 63% 10 Units 17% 1 Unit 2% 60 Units 100% 58% AMI (Excl. Manager Unit) Surface and Tuck -Under 66 Spaces (2) 1.1 Spaces/Unit 20 Spaces 2.3 Spaces/1,000 SF 86 Spaces Prepared by: Keyser Marston Associates, Inc. Page 53 of 61 Filename is\National City_Kimball Highland_v7_Final;10/9/2020;rsp TOTAL 3.4 Acres 125,950 SF 12,883 SF 31.511 SF 170,344 SF 8.834 SF 179,178 SF Number of Units 12 30 64 39 145 74% 8% 18% 100% Units 8% Units 21% Units 44% Units 27% Units 100% 43 Units/Acre Ave rage Unit Size (1) 470 SF 650 SF 850 SF 1.190 SF 869 SF 15 Units 10% 15 Units 10% 88 Units 61% 25 Units 17% 2 Units 1% 145 Units 100% 58% AMI (Excl. Manager Unit) 156 Spaces 20 Spaces 176 Spaces 1.1 Spaces/Unit 2.3 Spaces/1,000 SF TABLE 2 ESTIMATED DEVELOPMENT COSTS KIMBALL HIGHLANDS MASTER PLAN CITY'OF NATIONAL CITY I. Direct Costs (1)(2) Off -Site Improvements (3)(4) Relocation (Cell Tower) (3) On -Site Improvements (5) GeotechnicaI Mitigation Parking Shell Construction - Residential Shell Construction - Senior Center FF&E Escalation Contingency Subtotal Direct Costs Add: Prevailing Wage Impact Total Direct Costs II. Indirect Costs Architecture & Engineering Permits & Fees (3) Legal & Accountin'g Taxes & Insurance Developer Fee Construction Management Marketing/Lease-Up Contingency Total Indirect Costs III. Financing Costs Loan Fees Predevelopment Loan Interest Interest During Construction/Lease- Accrued Interest on Soft Debt Title/Recording/Escrow TCAC/Syndication Pees Operating Lease-Up/Reserves Total Financing Costs Totals $1,198,860 $890,000, $3,888,117 $2,698,072 $4,424,918 $32,365,000 $2,050,592 $220,000- $2,347,000 $3,255,000 $53,337,559 $8,112,000 $61,449,559 $3,746,720 $2,159,838 $377,900 $799,939 $9,671,000 $212,000 $199,700 $375 067 $17,542,164 $1,258,000 $247,140 up $3,156,000 $457,060 $65,000 $312,490 $709,939 $6,205,629 Per Unit $8,268 $6,138 $26,815 $18,607 • $30,517 $223,207 $14,142 $1,517 $16,186 $22,448 $367,845 $55,945 $423,790 Comments $8 Per SF Site Allowance $26 Per SF Site $18 Per SF Site $25,142 Per Space $190 Per SF - Residential $232 Per SF - Senior Center Allowance 4.9% of Directs = Excl. FF&E 6.5% of Directs $298 Per SF GBA 15.3% of Directs - Excl. FF&E $343 Per SF GBA $25,839 7.0% of Directs (8) $14,895 $12 Per SF GBA $2,606 0.7% of Directs (8) $5,517 1.5% of Directs (8) $66,697 18.1% of Directs (8) $1,462 0.4% of Directs (8) $1,377 Allowance $2,587 2.2% of Indirects $120,980 28.5% of Directs $8,676 2.0% of Directs $1,704 0.4% of Directs $21,766 5.1%:of Directs $3,152 0.7% of Directs $448 0.1% of Directs $2,155 0.5% of Directs $4,896 1.2% of Directs $42,797 10.1% of Directs. IV. Total Costs - Excl. •Acquisition, $85,197,000 $587,566 $475 Per SF GBA V. Land Acquisition Costs,- Site One (7) VI. Capitalized Ground Lease - Site Two (6) $2,860,000 $3,215,000 $19,724 $22,172 $41 . Per SF - Site One $41 Per SF - Site Two VII. Grand Total Costs $91,272,000_ $629,462 $509 Per SF GBA (1) Assumes payment of prevailing wages. (2) Includes pro rata share of general conditions, contractor overhead 'and profit, and contractor insurance. (3) Estimate; not verified by KMA or City. (4) includes costs for sewer realignment. (5) Includes costs for additional grading and soils export. (6) Acquisition costs for Site One per Purchase and Sale Agreement dated 11/18/19 and subsequent Amendments. (7) Actual acquisition costs for Site Two pending appraisal. (8) Direct costs excluding prevailing wages. Prepared by: Keyser Marston Associates, Inc. Filename: National City_Kimball Highland_v7_Final;10/9/2020;rsp Page 54 of 61 TABLE 3 NET OPERATING INCOME KIMBALL HIGHLANDS MASTER PLAN CITY OF NATIONAL CITY # of Total I. Gross Scheduled Income Units $/Month (1) Annual Studio @ 30% AMI 3 $581 $20,916 Studio @ 50% AMI 1 $986 $11,832 Studio @ 60% AMI 5 $1,188 $71,280 Studio @ 70% AMI 3 $1,390 $50,040 One Bedroom @ 30% AMI 3 $615 $22,140 One Bedroom @ 50% AMI 3 $1,049 $37,764 One Bedroom @ 60% AMI 18 $1,265 $273,240 One Bedroom @ 70% AMI 6 $1,482 $106,704 Two Bedroom @ 30% AMI 6 $736 $52,992 Two Bedroom @ 50% AMI 7 $1,256 $105,504 Two Bedroom @ 60% AMI 39 $1,516 $709,488 Two Bedroom @ 70% AMI 10 $1,776 $213,120 Two Bedroom @ Manager 2 $0 $0 Three Bedroom @ 30% AMI 3 $846 $30,456 Three Bedroom @ 50% AMI 4 $1,446 $69,408 Three Bedroom @ 60% AMI 26 $1,747 $545,064 Three Bedroom @ 70% AMI 6 $2,047 $147,384 Total/Average 145 $1,418 $2,467,332 Add: Other Income $8 /Unit/Month Total Gross Scheduled Income (GSI) II. Effective Gross Income (EGI) (Less) Vacancy Total Effective Gross Income (EGI) 5.0% of GSI III. Operating Expenses (Less) Operating Expenses $5,400 /Unit/Year (Less) Tenant Services (2) $0 /Unit/Year (Less) Property Taxes/Assessments (3) $69 /Unit/Year (Less) Replacement Reserves $300 /Unit/Year (Less) CaIHFA Monitoring Fees $52 /Unit/Year (Less) City Housing Authority Monitoring Fees $201 /Unit/Year Total Expenses $6,021 /Unit/Year 37.0% of EGI $13,920 $2,481,252 ($124,063) $2,357,189 ($783,000) so ($10,000) ($43,500) ($7,500) ($29,000) ($873,000) IV. Net Operating Income $1,484,189 V. (Less) Payment for City's Land Loan VI. (Less) Payment for Housing Authority's Cash Loan 0.29% of City Cash Loan 0.93% of City Land Loan ($30,000) ($30,000) VII. NOI after Debt Service for Local Public Loans $1,424,189 (1) Reflects 2020 Tax Credit Allocation Committee (TCAC) rents net of monthly utility allowance of $25 for studio, $34 for one -bedroom, $44 for two -bedroom units, and $55 for three -bedroom units. Utility profile consists of electric heat, (2) See Table 5. (3) Assumes that the project will qualify for tax-exempt status. Prepared by: Keyser Marston Associates, Inc. Filename: National City_Kimball Highland_v7_Final;10/9/2020;rsp Page 55 of 61 TABLE 4 FINANCING DEFICIT KIMBALL HIGHLANDS MASTER PLAN CITY OF NATIONAL CITY I. Sources of Funds Supportable Permanent Loan (1) Tax Credit Equity Investment.- Federal (2) Tax Credit Equity Investment - State (2) Deferred Developer Fee (3) General Partner Equity Contribution (3) CaIHFA Mixed -Income Program (MIP) Loan (4) Accrued Interest on Soft Debt CDLAC/TCAC Refunds on Deposits Total Sources of Funds II. (Less) Development Costs - Excl. Acquisition Total Per Unit $22,599,000 $156,000 $30,176,000 $208,000 $10,279,000 $71,000 • $0 $0 $7,471,000 $52,000 $6,400,000 $44,000 $457,000 $3,000 $200,000 $1,000 $77,582,000 $535,000 ($85,197,000) ($588,000) III. Residual Land Value ($7,615,000) ($53,000) IV. (Less) Land Acquisition Costs - Site One V. (Less) Capitalized Ground Lease Payment -.Site Two ($2,860,000) ($20,000) ($3,215,000) ($22,000) VI. Financing Deficit ($13,690,000) ($94,000) r VII. Proposed City Sources of Funds Ground Lease Note Residual Receipts Cash Loan Total City Sources of Funds 1 $3,215,000 $10,475,000 $13,690,000 $22;000 $72,000 $94,000 Prepared by: Keyser Marston Associates, Inc. Page 56 of 61 Filename: National City_Kimball Highland_v7_Final;10/9/2020;rsp TABLE 4 (CONT'D.) FINANCING DEFICIT KIMBALL HIGHLANDS MASTER PLAN CITY OF NATIONAL CITY (1) Supportable Permanent Loan NOI Interest Rate Term (years) Debt Coverage Ratio Annual Debt Service Supportable Permanent Loan $1,424,189 4.61% 40 1.15 $1,238,425 $22,599,430 (2) Low Income Housing Tax Credits (Federal) Estimate of Eligible Basis: Total Development Costs (Less) Subtotal Ineligible Costs Eligible Basis Estimate of Maximum Threshold Basis Limit: * • 11% $91,272,000 ($9,962,230) $81,309,770 $85,704,132 * Reflects basis adjustments for prevailing wages, elevator, and units below 50% AMI. Includes development impact fees of $1,734,838. Tax Credit Proceeds: Maximum Eligible Basis (Less)'Voluntary Adjustment in Basis Total Requested Unadjusted Basis Impacted Bonus Factor Tax Credit Qualified Units/Applicable Factor Tax Credit Rate Total Tax Credits @ Limited Partner Share Present Market Value @ Federal $81,309,770 0% $81,309,770 130% $105,702,701 100% $105,702,701 3.07% $3,245,073 10 $32,450,729 100% $32,447,484 93% $30,176,160 State $81,309,770 49% ($40,028,223) $41,281,547 100% $41,281,547 100% $41,281,547 30.00% $12,384,464 1 $12,384,464 100% $12,383,226 83% $10,279,105 (3) Estimate of Deferred Developer Fee Eligible Basis (Less) Developer Fee Unadjusted Eligible Basis Total Developer Fee General Partner Equity Contribtuion Deferred Developer Fee Total Deferred/Contributed Developer Fee Upfront Developer Fee $81,309,770 ($9,671,206) $71,638,564 13.5% $9,671,206 $7,471,206 77.3% $7,471,206 $2,200,000 (4) CaIHFA Mixed Income Program (MIP) Units at 50% AMI - 80% AMI Per Unit Allocation Total MIP Loan 128 Units $50,000 /Unit $6,400,000 Prepared by: Keyser Marston Associates, Inc. Page 57 of 61 Filename: National City_Kimball Highland_v7_Final;10/9/2020;rsp TABLE 5 CASH FLOW PROJECTION KIMBALL HIGHLANDS MASTER PLAN CITY OF NATIONAL CITY 1 2 3 4 5 6 7 8 9 I. Gross Scheduled Income (GSI) 2.5% $2,481,252 $2,543,283 $2,606,865 $2,672,037 $2,738,838 $2,807,309 $2,877,492 $2,949,429 $3,023,165 (Less) Vacancy 5.0% ($124,063) ($127,163) ($130,342) ($133,601) ($136,941) ($140,364) ($143,873) ($147,470) ($151,157) II. Effective Gross Income (EGI) $2,357,189 $2,416,120 - $2,476,523 $2,538,436 $2,601,897 $2,666,945 $2,733,618 $2,801,959 $2,872,008 (Less) Operating Expenses (1) ($873,000) ($901,620) ($931,239) ($961,891) ($993,613) ($1,026,442) ($1,060,417) ($1,095,578) ($1,131,966) (Less) Annual Payment to City ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) (Less) Annual Payment to Housing Authority ($30,000) ($30,000) ($30,000) ($30,000) .($30,000) ($30,000) ($30,000) ($30,000) ($30,000) III. Net Operating Income (NOI) (Less) Debt Service IV. Project Cash Flow $1,424,189 $1,454,500 $1,485,285 $1,516,545 $1,548,284 $1,580,503 $1,613,201 $1,646,381 $1,680,042 ($1,238,425) ($1,238,425) ($1,238,425) ($1,238,425) ($1,238,425) ($1,238,425) ($1,238,425) ($1,238,425) ($1,238,425) $185,764 $216,075 $246,859 $278,120 $309,859 $342,077 $374,776 . $407,956 .$441,617 V. (Less) Asset Management Fees Limited Partner Asset Mgmt. Fees 3.0% ($12,500) ($12,875) ($13,261) ($13,659) - ($14,069) ($14,491) ($14,926) ($15,373) ($15,835) General Partner Asset Mgmt. Fees 3.0% ($25,000) ($25,750) ($26,523) ($27,318) ($28,138) ($28,982) ($29,851) ($30,747)' ($31,669) • (Less) Total Asset Management Fees ($37,500) ($38,625) ($39,784) ($40,977) ($42,207) ($43,473) ($44,777) ($46,120) . ($47,504) VI. (Less) Resident Services Fee 3.5% ($60,000) ($62,100) ($64,274) ($66,523) ($68,851) ($71,261) ($73,755) ($76,337) f$79,009) VII. Net Cash Flow $88,264 $115,350 $142,802 $170,620 $198,801 $227,343 $256,244 $285,499 $315,105 VIII. Developer Fee Repayment $0 IX. Cash Flow Available for Distribution (2) $88,264 $115,350 $142,802 $170,620 $198,801 $227,343 $256,244 $285,499 $315,105 (1) Reflects annual escalation at 3.5% for operating expenses and monitoring fee; 0% for replacement reserves; and 2.0% for taxes/assessments. (2) See Table 6 for cash flow distribution. Prepared by: Keyser Marston Associates, Inc. Filename is\National City_Kimball Highland_v7_Final;10/9/2020;rsp Page 58 of 61 TABLE 5 CASH FLOW PROJECTION KIMBALL HIGHLANDS MASTER PLAN CITY OF NATIONAL CITY I. Gross Scheduled Income (GS() (Less) Vacancy II. 2.5% 5.0% Effective Gross Income (EGI) (Less) Operating Expenses (1) (Less) Annual Payment to City (Less) Annual Payment to Housing Authority III. Net Operating Income (NOI) (Less) Debt Service IV. V. Project Cash Flow (Less) Asset Management Fees Limited Partner Asset Mgmt. Fees General Partner Asset Mgmt. Fees (Less) Total Asset Management Fees VI. (Less) Resident Services Fee VII. Net Cash Flow 3.0% 3.0% 3.5% 10 $3,098,744 ($154,936) $2,943,808 ($1,169,624) ($30,000) ($30,000) $1,714,184 ($1,238,425) $475,759 ($16,310) ($32,619) ($48,929) ($81,774) 11 12 13 14 15 36 55 $3,176,212 $3,255,618 $3,337,008 $3,420,433 $3,505,944 $5,888,520 $9,413,684 ($158,809) ($162,779) ($166,849) ($171,020) ($175,296) ($294,423) ($470,680) $3,017,403 $3,092,838 $3,170,159 $3,249,413 $3,330,648 $5,594,097 $8,943,004 ($1,208,596) ($1,248,929) ($1,290,670) ($1,333,868) ($1,378,575) ($2,777,874) ($5,284,106) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,0001 ($30,000) ($30,000) ($30,000) $1,748,807 $1,783,909 $1,819,489 $1,855,545 $1,892,074 $2,756,222 $3,598,898 ($1,238,425) ($1,238,425) ($1,238,425) ($1,238,425) ($1,238,425) ($1,238,425) $0 $510,382 $545,484 $581,064 $617,120 $653,649 $1,517,797 $3,598,898 ($16,799) ($17,303) ($17,822) ($18,357) ($18,907) $0 $0 ($33,598) ($34,606) ($35,644) ($36,7131 ($37,8151 ($70,347) ($123,353) ($50,397) ($51,909) ($53,466) ($55,070) ($56,722) ($70,347) ($123,353) ($84,636) ($87,598) ($90,664) ($93,837) ($97,122) ($200,015) ($384,530) $345,056 $375,349 $405,977 $436,934 $468,212 $499,805 $1,247,435 $3,091,015 VIII. Developer Fee Repayment IX. Cash Flow Available for Distribution (2) (1) Reflects annual escalation at 3.5% for operating expenses and monitoring fee; 0% for replacement reserves; and 2.0% for taxes/assessments. (2) See Table 6 for cash flow distribution. Prepared by: Keyser Marston Associates, Inc. Filename is\National City_Kimball Highland_v7_Final;10/9/2020;rsp $345,056 $375,349 $405,977 $436,934 Page 59 of 61 $468,212 $499,805 $1,247,435 $3,091,015 TABLE 6 PUBLIC LOAN REPAYMENT SCHEDULE KIMBALL HIGHLANDS MASTER PLAN CITY OF NATIONAL CITY I. Cash Flow Available for Distribution 1 2 3 4 5 6 7 8 9 $88,264 $115,350 $142,802 $170,620 $198,801 $227,343 $256,244 $285,499 $315,105 II. Allocated to Pay Down. Public Loans 50.0% $44,132 $57,675 $71,401 $85,310 $99,401 $113,672 $128,122 $142,749 $157,552 III. City of National City - Land Value Loan Beginning Balance Interest (Less) Debt Service Payment (Less) Cash Flow Credit (1) Ending Balance Projected Total Cash to the City (Rounded) ;. $3,215,000I $3,251,377 3.0% $96,450 $96,450 ($30,000) ($30,000) ($30,073) ($39,302) $3,251,377 $3,278,525 $60,000 $69,000 $3,278,525 $3,296,320 $3,304,637 $3,303,352 $3,292,343 . $3,271,486 $3,240,662 $96,450 $96,450 $96,450 $96,450 $96,450. $96,450 $96,450 ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($48,6551 ($58,133) ($67,735) ($77,460) ($87,307) ($97,274) ($107,361) $3,296,320 $3,304,637 $3,303,352 $3,292,343 $3,271,486 $3,240,662 $3,199,750 $79,000 $88,000 $98,000 $107,000 $117,000-• $127,000 $137,000 IV. Housing Authority National City Cash Loan Beginning Balance Interest (Less) Debt Service Payment (Less) Cash Flow Credit (1) Ending Balance $10,475,000] $10,759,250 $11,043,500 $11,327,750 $11,612,000 $11,896,250 $12,180,500 $12,464,750 $12,749,000 3.0% $314,250 $314,250 $314,250 $314,250 $314,250 $314,250 $314,250 $314,250 $314,250 ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) $10,759,250 $11,043,500 $11,327,750 $11,612,000 $11,896,250 $12,180,500 $12,464,750 $12,749,000 $13,033,250 V. CaIHFA Mixed -Income Program Loan Beginning Balance Interest (Less) Cash Flow Credit Ending Balance (1) $6,400,000$6,561,941 $6,719,568 $6,872,822 $7,021,645 $7,165,979 $7,305,767 $7,440,952 $7,571,477 2.75% $176,000 $176,000 $176,000 $176,000. $176,000 $176,000 $176,000 $176,000 $176,000 31.9% ($14,059) ($18,373) ($22,746) ($27,177) ($31,666) ($36,212) ($40,815) (S45,475) ($50,191) $6,561,941 $6,719,568 $6,872,822 $7,021,645 $7,165,979 $7,305,767 $7,440,952 $7,571,477 $7,697,286 The City and Housing Authority (combined) will receive 68.1% of the public agencies' share of residual receipts. The City's Land Loan will be repaid in its entirety before the Housing Authority receives any residual receipt payments. The City Land Loan is projected to be repaid in Year 27. Prepared by: Keyser Marston Associates, Inc. Filename: is National City_Kimball Highland_v7_Final;10/9/2020;rsp Page 60 of 61 TABLE 6 PUBLIC LOAN REPAYMENT SCHEDULE KIMBALL HIGHLANDS MASTER PLAN CITY OF NATIONAL CITY I. Cash Flow Available for Distribution 10 11 12 13 14 15 36 55 $345,056 $375,349 $405,977 $436,934 $468,212 $499,805 $1,247,435 $3,091,015 II. Allocated to Pay Down Public Loans 50.0% $172,528 $187,674 $202,988 $218,467 $234,106 $249,902 $623,718 $1,545,507 III. City of National City - Land Value Loan Beginning Balance Interest (Less) Debt Service Payment (Less) Cash Flow Credit (1► Ending Balance Projected Total Cash to the City (Rounded) 3.0% $3,199,750 $3,148,176 $95,993 $94,445 ($30,000) ($30,000) ($117,566) ($127,888) $3,148,176 $3,084,734 $3,084,734 $3,008,953 $2,920,351 $2,818,434 $92,542 $90,269 $87,611 $84,553 ($30,000) ($30,000) ($30,000) ($30,000) ($138,323) ($148,871) ($159,528) ($170,292) $3,008,953 $2,920,351 $2,818,434 $2,702,695 $148,000 $158,000 $168,000 $179,000 $190,000 $200,000 IV. Housing Authority National City - Cash Loan Beginning Balance Interest (Less) Debt Service Payment (Less) Cash Flow Credit (1) Ending Balance $13,033,250 $13,317,500 $13,601,750 $13,886,000 $14,170,250 $14,454,500 3.0% $314,250 $314,250 $314,250 $314,250 $314,250 $314,250 ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) $13,317,500 $13,601,750 $13,886,000 $14,170,250 $14,454,500 $14,738,750 $17,386,082 $314,250 ($30,000) ($425,022) $17,245,310 $6,619,019 $198,571 ($30,000) ($1,053,160) $5,734,000 V. CaIHFA Mixed -Income Program Loan Beginning Balance $7,697,286 $7,818,324 $7,934,537 $8,045,872 $8,152,276 $8,253,697 $9,077,648 $4,889,943 Interest 2.75% $176,000 $176,000 $176,000 $176,000 $176,000 $176,000 $176,000 $134,473 (Less) Cash Flow Credit 31.9% ($54,962) ($59,787) ($64,665) ($69,596) ($74,578) ($79,611) ($198,695) ($492,347) Ending Balance $7,818,324 $7,934,537 $8,045,872 $8,152,276 . $8,253,697 $8,350,087 $9,054,952 $4,532,000 (1) The City and Housing Authority (combined) will receive 68.1% of the public agencies' share of residual receipts. The City's Land Loan will be repaid in its entirety before the Housing Authority receives any residual receipt payments. The City Land Loan is projected to be repaid in Year 27. Prepared by: Keyser Marston Associates, Inc. Filename: is National City_Kimball Highland_v7_Final;10/9/2020;rsp Page 61 of 61 RESOLUTION NO. 2020 - 77 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION -HOUSING AUTHORITY OF THE CITY OF NATIONAL CITY ("HOUSING AUTHORITY") (1) AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE A DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE HOUSING AUTHORITY, COMMUNITY HOUSINGWORKS, AND CENTRO DE LA SALUD DE LA COMUNIDAD DE SAN YSIDRO, INC., DBA SAN YSIDRO HEALTH, FOR THE DEVELOPMENT OF THE KIMBALL HIGHLAND MASTER PLAN THAT INCLUDES (A) 60 AFFORDABLE HOUSING UNITS AND A NEW SENIOR CENTER ON A PARCEL OF LAND OWNED BY THE HOUSING AUTHORITY LOCATED AT 1221 "D" AVENUE, AND (B) 85 AFFORDABLE HOUSING UNITS, A PROGRAM OF ALL-INCLUSIVE CARE FOR THE ELDERLY CENTER, AND A FEDERALLY QUALIFIED HEALTH CENTER ON A PARCEL OF LAND LOCATED ON THE WESTERLY SIDE OF 1320 HIGHLAND AVENUE; AND (2) AUTHORIZING THE ESTABLISHMENT OF A HOUSING AUTHORITY FUND BASELINE APPROPRIATION OF $10,475,000 BUT NOT -TO - EXCEED $11,662,000 FROM FUND BALANCE OF THE HOUSING AUTHORITY FUND FOR A HOUSING AUTHORITY LOAN TO COMMUNITY HOUSINGWORKS TO FINANCE THE DEVELOPMENT OF THE AFFORDABLE HOUSING AND NEW SENIOR CENTER WHEREAS, the Community Development Commission -Housing Authority of the City of National City ("Housing Authority" or "CDC -HA"), Community Housing Works ("Affordable Housing Developer") and Centro De Salud De La Comunidad De San Ysidro, Inc., dba San Ysidro Health ("Health Center Developer") are all of the parties to that certain Exclusive Negotiation Agreement (D Avenue: Mixed -Use Master Plan) by and among Housing Authority, Affordable Housing Developer, and Health Center Developer, dated as of November 19, 2019 (as amended, the "ENA"); and WHEREAS, the Disposition and Development Agreement ("Agreement" or "DDA") among the Housing Authority, Affordable Housing Developer, and Health Center Developer will supersede the ENA in its entirety; and WHEREAS, the Affordable Housing Developer entered into a Purchase and Sale Agreement with Patricia L. Peterson, Trustee of the L.O. Lindemulder Trust No. 1, and Patricia L. Peterson, and Mary M. Peterson, Co -Trustee of the Peterson Family Trust B dated July 1, 1980 (collectively, "Seller") pursuant to which the Affordable Housing Developer intends to acquire that certain real property identified as APN 560-410-03, 560- 050-06, 560-050-12 and 505-050-10 (collectively, the "Peterson Property") as Site 1 and a portion of Site 3 as shown on the Exhibit "A" of the Agreement; and WHEREAS, the Affordable Housing Developer shall construct the approximately 85-unit affordable housing project, parking for the affordable housing project and off -site improvements ("Phase 1 Project") on Site 1; and Resolution No. 2020 — 77 Page Two WHEREAS, the Housing Authority owns certain real property described as APN 560-410-06 and shown on the Parcel Map attached to the Agreement as Exhibit A, which the Housing intends to lease to an affiliate of the Affordable Housing Developer ("Site 2 Owner"), upon which the Site 2 Owner shall construct approximately 60-units of affordable housing, Senior Center operated by the City of National City, and parking ("Phase 2 Project") on Site 2 and the Housing Authority desires to ground lease Site 2 to the Site 2 Owner and the Affordable Housing Developer desires for the Site 2 Owner to lease Site 2 from CDC -HA pursuant to a Ground Lease as defined in the Agreement; and WHEREAS, the Housing Authority owns that certain Public Right of Way located at Kimball Way as shown on the Exhibit "A" of the Agreement ("Kimball Public Right of Way") and the Housing Authority desires to sell fee simple title to the Kimball Public Right of Way to the Health Center Developer pursuant to Health and Safety Code Section 34312.3(b); and WHEREAS, prior to or concurrently with the closing of Affordable Housing Developer's acquisition of the Peterson Property from Seller, the Affordable Housing Developer desires to sell fee simple title to that certain real property and improvements identified as all of APN 560-410-03, and portions of APN 560-050-06 and 560-050-12 to Health Center Developer; and WHEREAS, the Kimball Public Right of Way and APN 560-410-03, and the portions of APN 560-050-06 and 560-050-12 are defined herein collectively as Site 3 and the Health Center Developer shall construct the Program of All -Inclusive Care for the Elderly Clinic and Federally Qualified Health Center to be developed by Health Center Developer on Health Center Site, parking for the Program of All -Inclusive Care for the Elderly Clinic and Federally Qualified Health Center ("Phase 3 Project"); and WHEREAS, the Housing Authority shall provide subordinate mortgage loans in the aggregate amount of up to the Housing Authority Loan Amount to the Site 1 Owner and/or Site 2 Owner to finance the acquisition, . construction and development of the Phase 1 Project, and the Phase 2 Project, as applicable. Provided, however, it is anticipated that Site 1 Owner and Site 2 Owner will be the same entity and that the Phase 1 Project and the Phase 2 Project will be one and the same project; and WHEREAS, the baseline aggregate Housing Authority Loan Amount is up to $10,475,000.00; provided, however, the aggregate Housing Authority Loan Amount may be increased to $11,662,000.00 upon delivery by the Affordable Housing Developer to the CDC -HA of evidence which is sufficient to demonstrate that the other financing sources for the Phase 1 Project and the Phase 2 Project are insufficient to construct the Phase 1 Project and the Phase 2 Project, as determined in the sole discretion of the Executive Director of the Housing Authority. Resolution No. 2020 — Page Three NOW, THEREFORE, BE IT RESOLVED that the Community Development Commission -Housing Authority of the City of National City hereby finds and declares that the above recitals are true and correct. BE IT FURTHER RESOLVED that the Community Development Commission - Housing Authority of the City of National City authorizes the Executive Director to execute a Disposition and Development Agreement by and between the Housing Authority, Community HousingWorks, and Centro De La Salud De La Comunidad de San Ysidro, Inc., dba San Ysidro Health for the development of the Kimball Highland Master Plan that includes (a) 60 affordable housing units and a new senior center on a parcel of land owned by the Housing Authority located at 1221 "D" Avenue, and (b) 85 affordable housing units, a Program of All -Inclusive Care for the Elderly Center, and a Federally Qualified Health Center on a parcel of land located on the westerly side of 1320 Highland Avenue. BE IT FURTHER RESOLVED that the Community Development Commission - Housing Authority of the City of National City authorizes the establishment of a Housing Authority Fund baseline appropriation of $10,475,000 but not -to -exceed $11,662,000 from fund balance of the Housing Authority Fund for a Housing Authority Loan to Community HousingWorks to finance the development of the affordable housing and new senior center. PASSED and ADOPTED this 20TH day of October, 2020 t/ / I. A1A 4V Alejand S telo olis r hairwoman ATTEST: APPROVED AS TO FORM: Passed and adopted by the Community Development Commission -Housing Authority of the City of National City, California, on October 20, 2020, by the following vote, to -wit: Ayes: Commissioners Cano, Morrison, Quintero, Rios, Sotelo-Solis. Nays: None. Absent: None. Abstain: None. AUTHENTICATED BY: ALEJANDRA SOTELO-SOLIS Chairman, Community Development Commission BRAD RAULSTON Secretary, Community Development Commission By: Deputy I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 2020-77 of the Community Development Commission -Housing Authority of the City of National City, California, passed and adopted on October 20, 2020. Secretar mmunity Development Commission By: Deputy bl01/4_ �}7 CITY OF NATIONAL CITY, CALIFORNIA COMMUNITY DEVELOPMENT COMMISSION -HOUSING AUTHORITY COUNCIL AGENDA STATEMENT MEETING DATE:October 20, 2020 AGENDA ITEM NO.: 25 ITEM TITLE: Resolution of the Community Development Commission -Housing Authority of the City of National City ("Housing Authority") (1) authorizing the Executive Director to execute a Disposition and Development Agreement by and between the Housing Authority, Community HousingWorks, and Centro De La Salud De La Comunidad de San Ysidro, Inc., dba San Ysidro Health, for the development of the Kimball Highland Master Plan that includes (a) 60 affordable housing units and a new senior center on a parcel of land owned by the Housing Authority located at 1221 "D" Avenue, and (b) 85 affordable housing units, a Program of All -Inclusive Care for the Elderly Center, and a Federally Qualified Health Center on a parcel of land located on the westerly side of 1320 Highland Avenue; and (2) authorizing the establishment of a Housing Authority Fund baseline appropriation of $10,475,000 but not -to - exceed $11,662,000 from fund balance of the Housing Authority Fund for a Housing Authority Loan to Community HousingWorks to finance the development of the affordable housing and new senior center. PREPARED BY: Carlos Aguirre, Director DEPARTMENT: Housing Authority PHONE: 619-336-4391l- - EXPLANATION. APPROVED BY: r — The Housing Authority approved an Exclusive Negotiation Agreement on November 19, 2019 with Community Housing Works and San Ysidro Health to refine the design and structure the financing for a senior village mixed - use master plan project identified in National City's 2011 Comprehensive Land Use Plan. In June 2020, the development team submitted a comprehensive development concept and financing plan that has been reviewed by City staff and consultants for feasibility and leverages $110 million in non -City resources. The proposed Kimball Highland Master Plan Development and Disposition Agreement implements and supports the urban village concept of creating a resilient, age -friendly National City that includes the social and physical infrastructure for healthy aging, including affordable housing, a senior center, and health facilities that are close to amenities including parks, libraries, and with access to transit and commerce. See Attachment No.1 for additional explanation. FINANCIAL STATEMENT: APPROVED: L-07a FINANCE ACCOUNT NO. 501-419-462-650-9165 APPROVED: MIS The Housing Authority will provide a baseline loan for $10,475,000 which may be increased up to $11,662,000 upon delivery of evidence that funding is insufficient to construct 145 affordable housing units and a new City senior center. See Attachment No. 1 and Exhibit B of Attachment No. 2 for additional information. ENVIRONMENTAL REVIEW: The Kimball Highland Master Plan project is considered an in -fill development which meets the conditions for CEQA exemption under Section 15332 (In -Fill Development Project). ORDINANCE INTRODUCTION FINAL ADOPTION n STAFF RECOMMENDAT;ON: Adopt the Resolution. BOARD / COMMISSION RECOMMENDATION Not applicable. �ATTACHMENTS: 1. Staff Report Explanation 2. Power Point Presentation 3. Disposition and Development Agreement 4. Resolution Attachment No. 1 COMMUNITY DEVELOPMENT COMMISSION -HOUSING AUTHORITY OF THE CITY OF NATIONAL CITY STAFF REPORT EXPLANATION October 20, 2020 Agenda Item Resolution of the Community Development Commission -Housing Authority of the City of National City ("Housing Authority") (1) authorizing the Executive Director to execute a Disposition and Development Agreement by and between the Housing Authority, Community HousingWorks, and Centro De La Salud De La Comunidad de San Ysidro, Inc., dba San Ysidro Health for the development of the Kimball Highland Master Plan that includes (a) 60 affordable housing units and a new senior center on a parcel of land owned by. the Housing Authority located at 1221 "D" Avenue, and (b) 85 affordable housing units, a Program of All -Inclusive Care for the Elderly Center, and a Federally Qualified Health Center on a parcel of land located on the westerly side of 1320 Highland Avenue; and (2) authorizing the establishment of a Housing Authority Fund baseline appropriation of $10,475,000 but not -to -exceed $11,662,000 from fund balance of the Housing Authority Fund for a Housing Authority Loan to Community HousingWorks to finance the development of the affordable housing and new senior center. Background The Kimball Highland Master Plan ("Master Plan") was first envisioned as the Senior Village Project by Community Development Commission. Workshops were held as early as 2005 to discuss a new affordable and for sale senior housing, the renovation of existing affordable housing units, specialized retail uses, and the replacement of the existing Nutrition and Senior Centers. The Senior Village Expansion and Enhancement Project was introduced to the City Council of the City of National. City on February 2, 2010. The 2011 Comprehensive Land Use Update included the development of a Senior Village, which called for the rehabilitation of Morgan and Kimball Towers and the development of additional housing, a medical services building, and a new senior center. However, the Community Development Commission of the City of National City was unable to pursue at that time due to the dissolution of the Redevelopment Agency in 2011. The substantial rehabilitation and recapitalization of Morgan and Kimball Towers began in April 2019 and was recently completed in August 2020 by the Community HousingWorks and Mercy Housing. Community HousingWorks worked to secure a Purchase and Sale Agreement for a westerly portion of 1320 Highland Avenue (Site 1 and portion of Site 3 as indicated in Exhibit "A" of Attachment No. 3 to this staff report) as an opportunity to further the goals of the Housing Authority and the City with regards to revitalizing the area as identified in the City's plans for a Senior Village expansion project. Community HousingWorks and San Ysidro Health entered into an Exclusive Negotiation Agreement on November 19, 2019 that included the Kimball Senior Center site located at 1221 "D" Avenue (Site 2 as indicated in Exhibit "A" of Attachment No. 3 to this staff report) in the development. In June 2020, Community HousingWorks and San Ysidro Health delivered to the Housing Authority a refined scope and financing plan for the development 5 1 Attachment No. 1 of the Kimball Highland Master Plan, and negotiations of the proposed Disposition and Development Agreement (Attachment No. 3) ensued. Development and Disposition Agreement The proposed Disposition and Development Agreement ("DDA"), included as Attachment No. 3 of this staff report, comprehensively addresses all the Kimball Highland Master Plan development process components. Under the DDA, Community Housing Works and San Ysidro Health will each have a separate land parcel on (Site 1 and Site 3, respectively) and will undertake their own financing and construction responsibilities. Community HousingWorks will own and operate affordable housing units on Site 1. On Site 3, San Ysidro Health will oversee and operate all health care services at the Program of All -Inclusive Care for the Elderly (PACE) Center and Federally Qualified Health Clinic. Both of these facilities will serve the broader National City community. San Ysidro Health, will require that the Housing Authority sell a portion of Right of Way located at Kimball Way to complete the proposed health care facilities. The Housing Authority will receive the appraised value for the Kimball Right of Way upon the close of. escrow for Site 3. Community HousingWorks will be the sole developer of the Site 2 parcel and will enter into a 65- year ground lease with the Housing Authority. Community HousingWorks will pay the Housing Authority the appraised value for the 65-year ground lease. The capitalized ground lease will be paid back as a loan (City's land loan) to the Housing Authority. The Housing Authority intends to transfer ownership of the Site 2 parcel to the City before the ground "lease is executed with Community HousingWorks so that payments from the City's land loan can be used by the City to offset the operational costs of the new Senior Center. Community HousingWorks will provide a new turnkey Kimball Senior Center for the City that will be leased back to the City for 65 years for $1.00 a year. As part of the DDA, Community Hosing will also consider the feasibility of a market -rate housing project along "D" Avenue on the Kimball and Morgan Towers site and at the site of the current San Ysidro Health Center on the corner of East 12th and "D" Avenue. Master Plan Components ti SITE ONE (1): REDEVELOPMENT OF 1320 HIGHLAND PARKING LOT • 85 affordable intergenerational apartment homes, serving over 250 new residents • 90 parking spaces for the residents SITE TWO (2): REDEVELOPMENT OF THE KIMBALL SENIOR CENTER • 60 affordable intergenerational apartment homes, serving over 180 new residents • 8,800 sf Senior Center • 86 parking spaces — 60 needed for residents; shared during daytime hours with Senior 2 Attachment No. 1 Center SITE THREE (3): REDEVELOPMENT OF A PORTION OF 1320 HIGHLAND PARKING LOT AND KIMBALL.RIGHT OF WAY •. 18,354 sf PACE center for seniors with exterior patio and garden area • 21,180 sf Federally Qualified Health Center to serve the broader community PUBLIC AMENITIES: • New and upgraded sidewalks, street trees, and urban greening • Cul-de-sac at Kimball Way, creating pedestrian -calming and safer crossing • Walkway between E. 14th Street and Kimball Way providing additional connectivity Master Plan Design The organic curves of the Paradise Creek are the architectural inspiration for the Kimball Highland Master Plan. The two sites border and shelter the masterplan comes from the curvilinear course of the adjacent Paradise Creek as well as the human need for connection. The Master Plan is focused on enhancing a village atmosphere that is connected, similar to historic villages centered around the common plaza space, which is where public and private interactions occur among all generations. The City of National City has already centered so many key public institutions in the Kimball Park area, including City offices, the library, service institutions such as the Boys and Girls Club, the Martin Luther King Jr. Center, ARTS Center, the existing San Ysidro Health Center, the Kimball Senior Center, and Senior Nutrition Center. Utilizing the natural rise of the terrain, the two sites in the Master Plan act as a capstone and connector to all the commercial activities to the east and flow west, ultimately to the Bayfront. The two Sites have mainly been underutilized and treated as the back of the National Shopping Plaza. With the proposed design, the two sites are now connected between the park and the marketplace, including the vibrant transportation corridor along Highland Avenue and Plaza Boulevard. The Master Plan envisions that residents will wander both east and west from these two centers of public and private energy and thus have created sheltered pedestrian spaces for them to wander. This includes the closing of Kimball Way, thus creating a cul-de-sac that is a calmer pedestrian experience and safer crossing to the Walmart Center. It also includes a landscaped paseo that provides connectivity east and west for the entire community between Kimball Park, the commercial spaces, and the public transportation corridor along Highland Avenue. Added density adds energy and synergy to the space, but steps down from the nearby senior towers, and is shielded by the natural mesa to the east. These structures willpeek out, not push y out, and will reveal fresh materials, rooflines, and modern facades that add beauty and interest at the street level and enhance views from around the City. In addition, the plan emphasizes sustainable transportation, such as walking, bicycling, rather than relying on the automobile as the 3 Attachment No. 1 primary focus for entering and enjoying the village. Parking is tucked away, under -emphasized, and shared so that people, not vehicles, are the focus. Connectivity was the primary focus when designing the two Sites, not only how the two sites communicate but also webbing all the ancillary and adjacent uses of the City Center area, such as the Kimball Senior Center, Senior Nutrition Center, and City Offices, and the major transit. stops and patterns of pedestrian travel. Special attention was paid to pedestrian uses in this area with high walkability to transit, commercial, and connections to many civic engagement centers such as the park and library. The PowerPoint Presentation (Attachment No. 2) provides site layouts for the Master Plan and architectural details. Financing Plan AFFORDABLE HOUSING AND NEW KIMBALL SENIOR CENTER (SITES 1 AND 2) The estimated total cost of the project of Site 1 and Site 2 Affordable' Housing Project is $91,272,000, which includes direct costs, indirect costs, and financing costs. The funding sources for the project are a permanent loan, federal and state tax credits, a general partner contribution, a CaIHFA Mixed -Income Program, and accrued interest and TCAC refunds on deposits. Exhibit B of the DDA (Attachment No. 3) provides a comprehensive financial analysis completed by Keyser Marston and Associates for the Housing Authority. Community HousingWorks will apply for. both 9% and 4% Low Income Housing Tax Credits and will also look to add State tax credits if available. These credits will be awarded by CTCAC, to allow a tax investor to become a limited partner in the final ownership entity and invest equity in exchange for the benefits of the tax credits. Community HousingWorks has over thirty years of experience in LIHTC developments, receives premium pricing from the highest level of investors, and will competitively bid and negotiate . with prospective investors on every development to obtain the best investment and partnership terms. CHW will contribute a portion of its earned developer fee back to the project. The General Partner is making a $7,471,000 equity contribution to support the project. The Housing Authority will make a cash loan to Community Housing Works for the development of the affordable housing on Site 1 and Site 2 and the new City Senior Center of $10,475,000. Because of challenging site conditions and the potential for escalating construction costs, the cash loan may be increased up to $11,662,000. There will be a base payment on the loan of $30,000• but will be repayable over 55 years at an interest of 3%. The loan principal will be immediately reduced by the amount of proceeds that Community HousingWorks receives for Site 3 and any adjoining right-of-way when it is sold to San Ysidro Health for the development of the proposed health facilities. 4 Attachment No. 1 FINANCING OF HEALTH CARE FACILITIES (SITE 3) The estimated total development cost of the health care facilities on Site 3 will be approximately $32 million. The health care facilities are being developed entirely with New Market Tax Credits and health care specific financing. The City or Housing Authority is not investing any other funds into this part of the development. San Ysidro Health has contracted with an experienced health care facilities financial advisor, Capital Link, that has prepared a financial overview for the development of the PACE center and Federally -Qualified Health Clinic as part of the Kimball Highlands Master Plan. Capital Link has extensive New Market Tax Credit and other financing experience, specializing in healthcare facilities serving low income communities. Environmental Review The Kimball Highland Master Plan is considered an in -fill development, which meets the conditions for CEQA exemption under Section 15332 (In -Fill Development Project). Specifically, the project is consistent with the applicable general plan designation and all applicable general plan policies as well as with applicable zoning designation and regulations; the proposed development occurs within city limits on a project site of no more than five acres substantially surrounded by urban uses; the project site has no value, as habitat for endangered, rare or threatened species; approval of the project would not result in any significant effects relating to traffic, noise, air quality, or water quality; and finally, the site can be adequately served by all required utilities and public services. Project Benefits and Staff Recommendation REDEVELOPMENT — It is estimated that the proposed two -site redevelopment and additional active transportation improvements will result in over $120 million in improvements .and infrastructure within the City of National City. ADDITIONAL RESIDENTIAL UNITS — In a time where access to affordable housing is at an all- time low, this development would provide an additional 145 units for working families and seniors on restricted incomes. These additional units would also provide the City low and very low-income units to assist in its. Regional Housing Needs Assessment (RHNA) allocation as determined by the State of California. AFFORDABILITY — The intergenerational apartments are slated to be highly affordable, renting at between 30-70% AMI. This affordability stabilizes renters and allows them to build resources to weather issues such as job loss and financial setbacks. Affordable rents for working class families and fixed -income seniors mean that they have more resources to spend on goods and services that are typically boosts to the local economy. ENRICHING HEALTH SERVICES — A full -service Federally Qualified Health Center, along with a PACE Center for the Elderly, will provide a nexus of senior and family health services 5 Attachment No. 1 in a central, transit -oriented location. JOB CREATION — The residential development will create an estimated 244 high -quality construction jobs and over 200 permanent, higher -paying jobs in apartment management and medical facilities. The DDA includes a Workforce Enhancement Initiative, which will strive to implement an apprenticeship and local hiring program for the affordable housing component of the Master Plan. Community Housing Works will also pay Davis -Bacon prevailing wage .on the construction of Site 1 and 2. MAXIMIZING LEVERAGE — By applying for the State of California funds, tax credits, and tax- exempt bond financing for the residential -developments, the Housing Authority is funding only of the residential components. $80 million dollars in public and private leverage is being provided to the residential components. REVENUE - The Housing Authority will receive a minimum payment of $30,000 on its cash loan to Community Housing Works and an additional $30,000 for the City through the capitalized ground lease loan on Site 2. Payment amount on the loans will increase over time as a share of cash flow (see Attachment 3, Exhibit B, Table 4). The Housing Authority will also receive $29,000 in annual monitoring fees. STAFF RECOMMENDATION Housing Authority staff recommends that the Board of Commissioners of the National City Housing Authority authorize the Executive Director to execute the proposed Disposition and Development Agreement with Community HousingWorks and San Ysidro Health. 6 Attachment No. Kimball Highland Master Plan Presentation: City of National City City Council CHW October 20, 2020 Community HousingWorks .4p) SAN YSIDRO HEALTH chworks.org A (UNloctug Nor o ,hbrkr CHABiluc MIMI P Attachment No. 2 ti)SAN YSIDRO HEALTH Team Members CHW chwor. org IuNimsus N ...Arks. viumn MPILumi CH O MIMS!R Kimball Highland Master Plan Team Master Plan Developer & Housing / Senior Center Owner/Developer: Health Clinics Owner/Developer: Design and Finance Team: • Architect • Civil Engineer • Financial Consultant Attachment No. tat SAN YSIDRO HEALTH CHW Community HousingWorks (CHW) Centro de Salud de la Communidad of San Ysidro Inc. (San Ysidro Health SYH) Studio E Architects Excel Engineering California Housing Partnership chworks.org a 1 U N I ass us Neighbor IAYbrkr i iAT APPILtATI CHARTUIO MIMIIO Attachment No. Community HousingWorks (CHW) • 31 Year old local nonprofit ■ Part of National City community • "Opportunity begins with a stable home" ■ Serves over 9,000 residents including working families, seniors, disabled Impact Framework Shortage of affordable housing Low wage working families Seniors and disabled people living on fixed incomes Access to Support Based on Resident Needs & Available Assets Resident -Engaged Community Improved Financial Well Being • A Safe Place • A Quality, Healthy Apartment Community • A Stable, Affordable Home Ultimate Impact: Quality affordable apartments for all People actively achieving life -changing goals for themselves, their families and their communities Sacramento Contra Costa \Iblw Santa Clara ilia CHW 42 Communities 3,6 Apartments 1,400 Apartments In Development Pipeline Fresno Los Angeles San Diego Riverside chwor. org �UNIDDSUS '1 u hbor rkr ow= CN 0 MIMSU San Ysidro Health (SYHealth) sip) Attachment No. SAN YSIDRO HEALTH Founded out of humble beginnings 51 years old by seven mothers seeking care for their children and now, a nationally recognized 501(c)(3) nonprofit, and Federally Qualified Health Center (FQHC). The mission of San Ysidro Health is to improve the health and well- being of the communities we serve, with access for all. We provide high quality, affordable and compassionate medical, dental and behavioral health services for the entire family. 107,000 patients served throughout 42 program sites across San Diego County generating nearly 500,000 visits. We have 3 clinics in National City and have been offering free COVID-19 testing. L 2019 Patient Profile: • 94% of patients live at or below 200% of the FPL • 40% are children (ages of 0-17 years) • 24% are seniors (ages 55+ years) ■ 2 Programs for All Inclusive Care for the Elderly (PACE)- San Ysidro and Chula Vista and 2 soon to open in El Cajon and Vista. ■ Adjacent landowner Attachment No. 2 if)SAN YSIDRO HEALTH CHW Kimball Highland Master Plan: Age -Friendly Community Concept chwarks.org UNiocSus jhborwi rir '1C Alf�LIAT� CK •ID JkIIMIER Attachment No. SAN YSIDRO National City: Age -Friendly Community Vti HEATH CARP Social Participation !lousing Outdoor Spaces and Buildings n n t ! r+ u t + II 11 Transportation O O / Communication and Information — The 8 Domains of Livability — Health Services and Community Supports Respect and Social Inclusion Ocl Clvlc Participation and Employment Other Areas • Emergency Preparedness • Elder abuse • Public safety • Dementia-fnendfy LEARN MORE AARP.ora/Livebie wv.o..or.. +.9m ,Smack • AMP MO I N ..my.. ammo -rod I Q...,•v..+ Cato. ASAP Lrrabl s c.An....11 y MVO' r L..1.leIMARP.oy In Nov 2019, the City enrolled in AARP Network of Age Friendly Communities City Vision: Enhanced Quality of Life for people of all ages and abilities Increased livability across the age spectrum Walkability to transit and retail, new homes, availability of health care, opportunities for ongoing community building and socialization chworks.org 1UN I DDSUS fi\elsiborritr warm 4111.11.1111111 CHARTERED MINIM Vision Attachment No. 2 joi)SAN YSIDRO HEALTH CHW Integrating intergenerational homes, healthcare and community amenities in a transit and pedestrian oriented village in downtown National City chworks.org Q �E1 US N w� bank. i '.. ��I`u� CHIC i0 Amain Kimball Highland Master Plan: Concept Attachment No. SAN YSIDRO HEALTH CHW Walkable, intergenerational neighborhood with amenities Connect Civic Center, Kimball Park, Highland Avenue / Plaza commercial businesses and transit Connect senior activities and existing senior residences w neighborhood that includes: • Kimball Park • Pedestrian friendly to Civic Center • Existing 303 apartment homes for low-income seniors at Kimball Tower and Morgan Tower • Existing George Waters Nutrition Center for seniors city-wide • Existing City Senior Center • Near retail and MTS transit on Highland Avenue chworks.org LUL441 MDT. US 11:!borl�Morb- �:tiii CHAR�UID MIMSIR Kimball Highland Master Plan: Concept HEALTH New health care connected with neighborhood • Federally qualified health clinic owned and operated by strong health care provider already working in National City • New PACE center for seniors who are at risk of being in nursing homes, enabling them to remain in their own home and thrive New City Senior Center — 8,800 sf state of the art to replace the existing City Senior Center (same location) New affordable homes for all ages - 145 apartments for residents with incomes ranging from 30% to 70% of AMI - chworks.org A �uNl�5u8 AlhbAriir APPILIATR CHI I0111MHR Attachment No. CHW New Affordable Apartments and New City Senior Center chworks.org 1 UNIECISUS tighbo&rkr ma=n \ APPILLATE "Amite° unisEN Attachment No. 2 Kimball Highland Master Plan ; ,----11-:-I) .:.'4 ' ''SYKCI 77 4;''�.$ E 12t' Stree�f IodationPP B IV k Kimball Park tP �z° F ii Site 2 11 I City -Owned 1 1.1 d w/ - 'f ) ' $etiOr -11 Center., a' � yA • [..1 r41 3 . A .",,,,' t r; n '1: 7 • II :• :14 .11 If .40 "1.11 CHW `,a,� t„+"*r "I"" (PSA) ~ ..'. Sites3 Site 1 1. 99 Cent - , SYH t ' Store Clinitr ' Q. t 14 ' Street t 1f - ,+ S �9 ; -14; ,fir r -1_r y 1.--. -,�. L.,. r, New Apartments on Sites 1 and 2; New City Senior Center on Site 2 chwor- org �UNI�SUS N ... r rkr > APPII.uTR ct o MEMOIR Kimball Highland Master Plan New Affordable Apartments • New Affordable Apartments — 145 new affordable apartments for all ages —families, seniors, disabled persons • 12 Studio • 30 1 bedroom / 1 bathroom ■ 64 2 bedroom / 1 bathroom • 39 3 bedroom / 2 bathroom ■ Income Ranges for Apartments, • 15 apartments at 30%AMI ■ 15 apartments at 50% AMI • 88 apartments at 60% AMI • 25 apartments at 70% AMI ■ 2 Manager Units • Apartment communities have their own spaces for resident gatherings, resident services, next generation success ■ CHW to provide resident services (same as Paradise Creek) ■ Plans subject to city's entitlement and permit process Attachment No. CHW chworks.org A 1UN I ILuV8 N :ghbor arla- �fi1 APPcy,�ereaeo �ueMaeR Kimball Highland Master Plan New Affordable Apartments 145 new affordable homes apartments total on two sites Homes located on Sites 1, 2 • Homes at Site 1 are adjacent to SYH health facilities • Homes at Site 2 are adjacent to new City Senior Center Resident amenity spaces • Parking separate from health center and separate from new Senior Center • Community Room and computer room • On -site management leasing office • Play areas Attachment No. CHW Architect rendering for Sites 1 and 3 — new apartments on Site 1, adjacent to SYH Clinic and PACE center on Site 3 chwor. org 1 UNIMUS N .. memo A ILIATI CH 0 NLMRlR Kimball Highland Master Plan New City Senior Center 8,800 square foot new City Senior Center at same location as current Turnkey — city specs, furnished and ready for use Ground floor of new apartments at Site 2 Near Kimball and Morgan Towers, walking area to Highland Avenue retail Attachment No.sik ' CHW Architect study of new City Senior Center space with apartment homes on Site 2,adjacent to Kimball Tower parking, with alle walking path to Highland Avenue retail chworks.org IUNI�VB N Ehbo- Ns APP„un CHART!IFD lllMRlR Attachment No. 2 gra)SAN YSIDRO HEALTH New Health Clinic and New PACE Center chwor. - org �UNIDOSUS N ..Aritr s1lti= APP"IATR C H 0 NUM' M M' Kimball Highland Master Plan Attachment No. milSAN YSIDRO HEALTH a. .I S .Icu r ram. t;12t' Stree'4 Iodation ,.y� ll * I'IH114 • i C Kimball Park 7 Alt 12 ,1!:. AO- 4.4 SYNC! 4t4 1.: Site 2 CityOWned . = - 1 Landw/ 1`' Senior �36 y Center .�-- ,,1 tIA. _ I I1W Pnn�rwl�rt VkAY:i1111: 'IV 61;14 '4 j _ Kitnbnl ' o ; and Moran r., Tower) L Walmart .ea 'r p�'- Site I `_` (PSA) Site�ti3 F, 1i'l SYH " Clinit '.. t i4th Street .1114 .44 T -'-- .. , ,.. 99_Cent 1.. # ' 1g 7 Stare t. a , 0 I h , 1 t I, if T , 4 , 14 L. 41"i L. ,L.f1 r . .a Health Facilities on Site 3 chworks.org LILNIXSUS Neighbor'iNbr�cr i i APPILIATI CHARTERED LI!MHHR Kimball Highland Master Plan- SYHealth in National City CO'bil D-19 DATA SOURCE Tne San Di a LIr, •Trt rt, UPDAtTE.D" Seple-mScr 5 Iv.) 'al COVID-19 cases: 1-299 300.599 600 - 899 900- 1199 1200 or more • * SYHEALTH CLINIC 3 Clinics in National City - • Pre. se ties Fcy Ora: es1 • ., •.1+ & Gefr'.a+ Ora: estt n ie, irlkihw tri vs .h, •I !� — r' USA MtX,CO Attachment No. 2 Dsuunie. • chworks.org 121 (UNIXSUS wbrw ���LV1� CH/ ID IIIIMSLR Kimball Highland Master Plan SYHealth FQHC/ SD PACE Healthcare Needs/ Trends Attachment No. to)SAN YSIDRO HEALTH • In the next 10 years, per County forecast, National City will experience a 36% growth of seniors 50+ yrs. vs 17% growth countywide • Seniors living in poverty in National City is 17% vs 9% Countywide. Seniors in National City were particularly likely to live in households with below -poverty incomes. SYHealth Response - New National City Health Center • A 40,000 square ft. state-of-the-art facility where 20,000 square feet will be dedicated to a Program of All - Inclusive Care for the Elderly (PACE) Project and 20,000 square feet dedicated to a federally qualified health center (FQHC) or community health center focused on the health care needs of low-income, Medi-Cal and uninsured residents living in the community. • Services provided from the FQHC, or community health center, will include medical, dental and behavioral health plus diagnostic laboratory, social and support services, transportation services, eligibility assistance and referrals to specialty New National City Health Center (FQHC) will be a 20,000 sq ft state-of-the-art facility on top of our new SD PACE- National City program/ SD PACE clinic. • In FQHC, expanded access to care for oral healthcare as we will increase from 6 dental exam rooms to 9 exam rooms in new facility; 20 medical exam rooms and new Behavioral Health Services Dept. chworks.org �UNIXSUS l e ghborrarkr APPILIATI CHARTER!'" YIMSIR San Diego PACE Program of All -Inclusive Care for the Elderly if)SAN YSIDRO HEALTH At San Diego PACE, our mission is to ensure seniors get the care they need to lead healthy, happy and independent lives. The San Diego PACE team is dedicated to supporting seniors and help them age safely at home. Family caregivers trust us to take care of their loved ones and deliver vital health care services in the home as they return to work and provide for their family. Providing Compassionate Care for Older Adults inw CaII: (619) 205-4585 • www.sdpace.org chworks.org an Diego PACE oviding CarnpassionoteCore to Oader Adults 619) 205-4985 Kimball Highland Master Plan Health Facilities In order to qualify for SD PACE, patients must be: • 55 years of age or older Attachment No. f.)SAN YSIDRO HEALTH • Living in a PACE -covered zip code/service area -(San Diego PACE covers 90 zip codes) • Certified by the State of CA as needing a level of care equal to nursing home services • Able to live safely and independently in the community with the help of PACE services NOTE: A participant can dis-enroll from PACE at any time chworks.org Kimball Highland Master Plan Benefits of SD PACE Program/ PACE Clinic Attachment No. 2 ifI) SAN YSIDRO HEALTH Many of our seniors age with several chronic illnesses such as dementia, diabetes, asthma, hypertension, and as a result, require monthly chronic care management. SD PACE allows us to take care of all of their health visits including dental and behavioral health through our on -site clinic. SD PACE supports our sandwich generation- caregivers who take care of their older (parents) and younger (children) loved ones SD PACE provides respite care. Some caregivers leave the workforce to care for disabled loved one. SD PACE allows a caregiver to work while they entrust us to pick up their loved one from home and provide their socialization, medicine, therapy and meals at our SD PACE center while they work during the day. chworks.org L,UN I MO! J wbor� �t41L1AT� CHi '10 MIMI1R Kimball Highland Master Plan Health Facilities Attachment No. to)SAN YSIDRO HEALTH Architect rendering of PACE entrance on Kimball Way Parking - 207 spaces necessary for the health facilities separate from apartment parking chworks.org 1UN I acsus �e,ghbor �orlcr Nwi. 'APP"uTR CHARTERED MEMOIR Attachment No. 2 th CHW SAN YSIDRO HEALTH Disposition and Development Agreement (DDA) and Community Benefits chworks.org 1UNIcosUS N �wbur i 'APPILIw� CMS 10 Y!MHHR Kimball Highland Master Plan Exclusive Negotiation Agreement (ENA) Attachment No. fa)SAN YSIDRO HEALTH CHW City Council approval of Exclusive Negotiation Agreement (ENA) on November 19, 2019 Per ENA Requirements, the Team successfully completed: • Due Diligence • Development of Conceptual Development Program • Submittal of Financing Program • Negotiation of Disposition and Development Agreement (DDA) chworks.org �uNIMeus N 9w� dtr APPILu� CHAR Ieo & IMSU Kimball Highland Master Plan Attachment No. 2 SAN YSIDRO HEALTH Disposition and Development Agreement (DDA) CHW Parties same as ENA: • CHW: Master Developer for Entitlements; Develop/Own 145 affordable apartments and new City Senior Center • SYH: Develop and own Health Clinic and PACE center Term of DDA: Finance closing for each housing site and health clinics required by Dec 2023, but Executive Director may extend to Dec 2025 if not in default chworks.org 121 I UNimsus liborrirr �{T�R ��IL�� cH� ID MIMse� Attachment No. Kimball Highland Master Plan SAN HEALTHDR� Disposition and Development Agreement (DDA) CHW ■ • 4:. • i - Vitartiiart- •• .. _ • • 1 r `1 Residential & Senior Center �Q "yam 1 \ -.'-‘*- I i . •., y' aa AR 0_ _ a - �_ II-LLi I. ► ''y .11, ,. Ng' . 41 . `r / < _ , . , = , F . ...,.. yr -1 ti-1' . \ - 4 CD 1 • = _= Iimbail To er��,,. 1 % Site Site 1 ���k}:_>t�\ ��,ti�< f' r. �t } 1 r �, .� ,y _ _ _ t SYH Clinic Residential } 99 Cents Stare ., ••RAgAU L E AVENUE 14TH ST• -1 , (__ kr ' ; M rran Tower 1. ? , I • ,, •. ; A -'r •• I I 1 I > 1 ■•1 ■ ■ ""..� Nona.) .........,...,,,�.,... auger 1 a 1 �(Q�► """"" """"' LOT EXHIBIT - .•. '•"" .'"'" """'w"'" KIMBALL HIGHLAND [.ss� 1__ KIMBALL WAYfUTH-ST, NATIONAL CITY, CA chworks.org 1 UNIII SUSii\1141113Atitla C APPILuTI CHARTERED MESMER Kimball Highland Master Plan AttachmentNo.2 SAN YSIDRQ HEALTH CHW Disposition and Development Agreement (DDA) Three land sites for Phase I: • Site 1 : CHW in escrow to purchase from private party, portion will be sold to SYH as part of Site 3. Use of remaining portion: Affordable apartments. • Site 2: City -owned site, CHW will have 65 year ground lease and pay city (through loan) value of the land. Use: New Senior Center, affordable apartments. • Site 3: Portion of Kimball Way will be vacated, City will sell portion of vacated Right of Way (ROW) to SYH for construction of the health facilities; site includes also portion that CHW is acquiring from private owner and will sell SYH Use: Health Clinic and PACE Center (approximately 40,000 sf of health facilities). chworks.org UNIo6Y$I�bor'W�brki- C APPILu� cy� eo �IIMSU hment No ;_ tat Kimball Highland Master Plan AttaCSAN YSIDRO HEALTH Disposition and Development Agreement (DDA) CHW City Loan: Housing, City Senior Center (Sites 1 and 2) • City Loan to CHW for apartments and new City Senior Center: $10,475,000. Upon evidence to Executive Director of higher costs, loan may increase up to $11,662,000. • Loan Term: 55 years, 3% interest, repayable from 50% of residual receipts cash flow • Low income housing tax credits (either 4% or 9%) • Project also pays city annual monitoring fee of $30,000 City Ground Lease: Senior Center and Housing (Site 2) • 65 year term (necessary for low income housing tax credit investors) • CHW to pay "rent" equal to the assessed value. Documented as a loan, and paid to city from residual receipts • CHW to lease the new Senior Center space of 8,800 sf to the city for 65 years at $1/year rent NNN. New Senior Center is turn key development • No cit • round lease for Site 1, since CHW will own the land chworks.org UNIDDSUS Neighbor" arkr A PILuT CHARTER/0 MIMRMI Kimball Highland Master Plan AttacSAN Ys DRO HEALTH Disposition and Development Agreement (DDA) Finance of Health Clinic and PACE Center CHW • Clinic and PACE Center privately financed by SYH • SYH is experienced in and will again use New Market Tax Credits (NMTC) and other financing • No City loan or subsidy for the health facilities • City to sell land on portion of vacated street Right of Way (Kimball Way) to SYH at fair market value based on appraisal chworks.org Q LUNI octal jwbor ���Lu� CHf 'ID &1IMRHR Kimball Highland Master Plan Disposition and Development Agreement (DDA) Attachment No. if)SAN YSIDRO HEALTH GNW Construction Labor Benefits: DDA requires prevailing wages for construction for Apartments and Senior Center • Worker protections • Lender protections regarding payment and performance bonds • Workforce enhancement provisions — construction career training through mentorship, opportunities for apprenticeships • Good faith efforts to facilitate, encourage and assist an established apprentice program to commence, progress • Local hire- good faith efforts by the general contractor for those persons and businesses doing business or residing in National City including outreach for contracts, etc. chworks.org A 1UN I � N ghbor' Mar �li�1C APPLLIATI CFIARTCRIO iletMHR Kimball Highland Master Plan Attachment No. 2 16 SAN YSIDRO HEALTH CHW i� , �, , ' '`'f, ,; ; SYHCI )1. :1!cui Street iodation r t rr� J �K i as• J ! •- r ;, o .t'.I'e7i►nY . } • IP Slit 1114. J. 41:'�1 6'F grk 1 1 f 1 I 1-. iT ` M �`` Il, 1j-1 IC Site 2 fi -1I 1 1; Cit -Owned _ , I Land w! 1 , '# Senor ',..1.`'34- --1 Centel ,,-=.. 0.,i �. 4 4 - tir A Walmart ' % 111'1 k% }1,01 '' 3 � Site 1 Ir' ,: rf 41 ;;j y,t 'tie. It 'ItiNtit• e j y }gyp R s 4%41 41` n i °d C H W • .. , .w.!„ :,. �_ - .1 (PSA) 99 Cent +' Store ,- t 14th Street y I F• Rr, — r �,i f { -.11, fit 1 it ..'4 '' p;I1:T'T.T:.. irk R 4 11 Feasibility Study for Market Rate Homes on Potential Sites chworks.org 1UNIDDSLOS NlejghborlArkr NIUMIR ANNILIATI CH! ID iilM1lR Kimball Highland Master Plan Disposition and Development Agreement (DDA) Attachment No. i f) SAN YSIDRO HEALTH CHW Market Rate Housing Feasibility Analysis Requirement: DDA requires a feasibility study provided to city by CHW within 1 year of DDA Study to review potential sites for market rate homes Potential sites identified in DDA include the following sites: • Site on D Street currently owned by SYH (clinic) • Portion of parking area of Kimball Tower facing Kimball Park • Portion of parking area of Morgan Tower facing Kimball Park chworks.org tit �UNII6u8 Si).wboili- 1C APPILIATI ro IIIMSLR Attachment No. 2 tot Kimball Highland Master Plan 10 EA TH R° Community Benefits: Strong Neighborhood Infill development, reuse of portion of current parking lot (western portion of 99 Cents store site) New state of the art City Senior Center — updated, renewed, maintain current central location Central location near Kimball Park, ties to Highland Avenue retail and transit corridor I ntergenerational neighborhood— new apartments for all ages ("family") near existing senior towers and City Senior Center. • Traffic calming with closure of portion of Kimball Way • Centralize health care in new, state of the art facilities owned and operated by local, successful community member (SYH). New PACE Center CHW chworks.org UN MINUS N hbor' M�orkr NNWr`A� C� `.10 MIMI!■ Attachment No. 001 Kimball Highland Master Plan SAN HEA THDRO Community Benefits: Strong Economy Jobs in Downtown National City: • New, permanent, health care jobs — SYH will have over 250 jobs at the clinic and PACE center • 200 are new well paying jobs in the heart of National City City Loan to Project Leverages Private Investment 10:1 • Private Investment from the Master Plan (housing, health, and senior center) leverages $110 million of private investment from affordable housing and health care facilities. • City investment of loan leverages 10 times private investment within the city for health and housing Construction Worker Wages and Protections Market Rate Home Feasibility analysis CHIN chworks.org A �uNiaasus N shba APPILtATh CHAII�!!!D !IIMI!■ Attachment No. 2 SAN YSIDRO HEALTH Thank You! CHW chworks.org SUNIaosUS li\eighboAdtr PP AILuT1 C!D YIMtIR Attachment No. 3 Kimball Highland DDA DISPOSITION AND DEVELOPMENT AGREEMENT By and Among the COMMUNITY DEVELOPMENT COMMISSION - HOUSING AUTHORITY OF THE CITY OF NATIONAL CITY, SAN YSIDRO HEALTH, and COMMUNITY HOUSINGWORKS (Kimball Highland Master Plan) Page 1 of 49 Attachment No. 3 Kimball Highland DDA DISPOSITION AND DEVELOPMENT AGREEMENT (Kimball Highland Master Plan) THIS DISPOSITION AND DEVELOPMENT AGREEMENT ("Agreement") is dated as of the 20th day of October, 2020 by and among the Community Development Commission - Housing Authority of the City of National City ("CDC -HA"), Centro De Salud De La Comunidad De San Ysidro, Inc., dba San Ysidro Health (the "Health Center Developer"), and Community HousingWorks, a California nonprofit public benefit corporation (the "Affordable Housing Developer"). RECITALS A. The Affordable Housing Developer has entered into that certain Purchase and Sale Agreement for Site 1 and intends to transfer Site 1 to its affiliate ("Site 1 Owner"). The Site 1 Owner shall construct the Phase 1 Project, as defined below, on Site 1. B. The CDC -HA owns Site 2 and the CDC -HA desires to ground lease Site 2 to the Affordable Housing Developer's affiliate ("Site 2 Owner") and the Affordable Housing Developer desires for its affiliate, the Site 2 Owner, to lease Site 2 from CDC -HA pursuant to the Ground Lease, as defmed below. The Site 2 Owner shall construct the Phase 2 Project on Site 2. Provided, however, it is anticipated that Site 1 Owner and Site 2 Owner will be the same entity and that the Phase 1 Project and the Phase 2 Project will be one and the same project. C. The CDC -HA owns that certain Public Right of Way located at Kimball Way as shown on the Parcel Map ("Kimball Public Right of Way"). The CDC -HA desires to sell fee simple title to the Kimball Public Right of Way to the Health Center Developer pursuant to Health and Safety Code Section 34312.3(b), as set` forth herein. The Affordable Housing Developer entered into that certain Purchase and Sale Agreement with Patricia L. Peterson, Trustee of the L.O. Lindemulder Trust No. 1, and Patricia L._Peterson, and Mary M. Peterson, Co -Trustee of the Peterson Family Trust B dated July 1, 1980 (collectively, "Seller") pursuant to which the Affordable Housing Developer intends to acquire that certain real property identified as APNs 560-410-03, 560-050-06, 560-050-12 and 505-050-10 on the Parcel Map (collectively, the "Peterson Property"). Prior toor concurrently with the closing of Affordable Housing Developer's acquisition of the Peterson Property from Seller, the Affordable Housing Developer desires to sell fee simple title to that certain real property and improvements identified as all of APN 560-410- 03, and portions of APN 560-050-06 and 560-050-12 to Health Center Developer contingent upon the successful negotiation and execution of a purchase and sales agreement between the two parties. The Kimball Public Right of Way and APN 560-410-03, and the portions of APN 560- 050-06 and 560-050-12 are defmed herein collectively as Site 3. The Health Center Developer shall construct the Phase 3 Project, as defmed below, on Site 3. D. The CDC -HA shall provide subordinate mortgage loans in the aggregate amount of up to the CDC -HA Loan Amount to Site 1 Owner and/or Site 2 Owner to finance the acquisition, construction and development of the Phase 1 Project, and the Phase 2 Project, as applicable. Provided, however, it is anticipated that Site 1 Owner and Site 2 Owner will be the same entity and that the Phase 1 Project and the Phase 2 Project will be one and the same project. Page 2 of 49 Attachment No. 3 Kimball Highland DDA E. The CDC -HA, Affordable Housing Developer and Health Center Developer are all of the parties to that certain Exclusive Negotiation Agreement.(D Avenue: Mixed -Use Master Plan) by and among Housing Authority, Developer and Health Center Developer, dated as of November 19, 2019 (as amended, the "ENA"). This Agreement supersedes the ENA in its entirety. NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, CDC -HA, Health Center Developer and Affordable Housing Developer hereby agree as follows: 100. Definitions. "Affordable Housing Developer" means Community HousingWorks. Where the term Affordable Housing Developer is used herein, such term shall include any permitted nominee, assignee or successor in interest as herein, provided. "Affordable Units" means collectively, the one hundred and forty-five (145) rental dwelling units in the Phase 1 Project and Phase 2 Project, whose occupancy, for a period of fifty- five years after the Closing, shall be restricted to Extremely Low Income Households, Very Low Income Households, and Low Income Households and whose monthly rental rates are restricted to the Maximum Rents pursuant to, and as set forth in more detail in, the Declaration. In addition, there 'will be one (1) manager's unit in the Phase 1 Project and one (1) manager's unit in the Phase 2 Project; provided, however, it is agreed to and understood by the parties that final unit counts for each of Phase 1 Project and Phase 2 Project shall be determined based on the requirements of the available financing sources and the Final Project Budget, each as approved by the Executive Director of the CDC -HA in its reasonable discretion. "Agreement" means this Disposition and Development Agreement among CDC -HA, Health Center Developer and Affordable Housing Developer. "Area Median Income" shall mean the area median income defined by the Department of Housing and Urban Development (HUD), and published by the California Tax Credit Allocation Committee (TCAC), as the then current area median income for the San Diego -Carlsbad Metropolitan Statistical Area, established periodically by HUD and published in the Federal Register, as adjusted for family size. In the event HUD and/or TCAC ceases to publish an established area median income as aforesaid, CDC -HA may, in its sole discretion, use any other reasonably comparable method of computing area median income. "CDC -HA" means the Community Development Commission -Housing Authority of the City of National City. "CDC -HA Loan Amount" means the amount of the loan from the CDC -HA to Site 1 Owner and/or Site 2 Owner to finance the acquisition, construction and development of the Phase 1 Project, and the Phase 2 Project. The baseline aggregate CDC -HA Loan Amount is up to $10,475,000.00; provided, however, the aggregate CDC -HA Loan Amount may be increased to $11,662,000.00 upon delivery by the Affordable Housing Developer to the CDC -HA of evidence Page 3 of 49 Attachment No. 3 Kimball Highland.DDA which is sufficient to demonstrate that the other financing sources for the Phase 1 Project and the Phase 2 Project are insufficient to construct the Phase 1 Project and the Phase 2 Project, as determined in the sole discretion of the Executive Director of the CDC -HA. Notwithstanding the foregoing, the Affordable Housing Developer intends to sell a portion of Site 1 to the Health Center Developer. All proceeds from any sale of any portion of the Peterson Property, Site 1 and any adjoining rights of way shall immediately be used to pay down the CDC -HA Loan Amount. "City" means the City of National City, a California municipal corporation. "Closing" means with respect to each of the Phase 1 Project, the Phase 2 Project and. the Phase 3 Project, the close of Escrow for the financing for acquisition and construction of the Phase 1 Project, the Phase 2 Project and the Phase 3 Project respectively; provided, however, the parties hereto agree and acknowledge that the Closing for the Phase 1 Project, the Closing for the Phase 2 Project, and the Closing for the Phase 3 Project may, but do not need to occur concurrently, and may incur independent of each other. "Closing Deadline for the Phase 1 Project" means December 31, 2023; provided, however, in the event the Affordable Housing Developer is not then in default under this Agreement, the Closing Deadline for the Phase 1 Project may be extended at the election of the Affordable Housing Developer in its sole discretion to December 31, 2025. "Closing Deadline for the Phase 2 Project" means December 31, 2023; provided, however, in the event the Affordable Housing Developer is not then in default under this Agreement, the Closing Deadline for the Phase 2 Project may be extended at the election of Affordable Housing Developer in its sole discretion to December 31, 2025. "Closing Deadline for the Phase 3 Project" means December 31, 2023; provided, however, in the event the Health Center Developer is not then in default under this Agreement, the Closing Deadline for the Phase 3 Project may be extended at the election of the Health Center Developer in its sole discretion to December 31, 2025. "Construction Deed of Trust" means the deed of trust recorded against Site 1 and/or Site 2, as applicable, for purposes of obtaining senior construction financing for the Phase,1 Project and the Phase 2 Project respectively. The Construction Deed of Trust relating to Phase 2 Project shall be recorded against the Site 2 Owner's leasehold interest in Site 2 only. Recordation of any deed of trust, mortgage or other instrument against the fee interest on Site 2 shall be a default under this Agreement, the Ground Lease, the Site 2 Declaration and the Developer Deed of Trust on Site 2. "Declaration" shall mean each of the two (2) declarations of covenants, conditions and restrictions in forms agreed to by the CDC -HA and the Site 1 Owner or Site 2 Owner, as applicable, to be executed by the Site 1 Owner and recorded against Site 1 or by the Site 2 Owner and recorded against the Site 2 Owner's leasehold interest on Site 2, as applicable, at the Closings for each of the Phase 1 Project and the Phase 2 Project. Provided, however, it is anticipated that the Phase 1 Project and the Phase 2 Project will be one and the same project. In such event there shall be only one (1) Declaration. Page 4 of 49 Attachment No. 3 Kimball Highland DDA "Default" means the failure of a party to perform any action or covenant required by this Agreement within the time periods provided herein following notice and opportunity to cure, as set forth in Section 501 hereof. "Developer Deed of Trust" means each of the two (2) subordinate deeds of trust, in forms agreed to by the CDC -HA and the Site 1 Owner or Site 2 Owner, as applicable, to be executed by the Site 1 Owner and recorded against Site 1 or by the Site 2 Owner and recorded against the Site 2 Owner's leasehold interest on Site 2, as applicable, at the Closings for each of the Phase 1 Project and the Phase 2 Project. Provided, however, it is anticipated that the Phase 1 Project and the Phase 2 Project will be one and the same project. In such event there shall be only one (1) Developer Deed of Trust. Provided all conditions of this Agreement are satisfied by the Closing Deadline for the Phase 1 Project or the Closing Deadline for the Phase 2 Project, as applicable, which may or may not occur concurrently, each Affordable Housing Developer Deed of Trust shall be subordinated to the Construction Deed of Trust and Permanent Deed of Trust. Any such subordination shall be in a form acceptable to the CDC -HA in its reasonable discretion. Additionally, the Affordable Housing Developer Deed of Trust securing Site 1 and the Affordable Housing Developer Deed of Trust securing Site 2 shall not be crossed collateralized or crossed defaulted without the consent of any senior lender and any tax credit investor limited partner of Owner. Nothing contained in this definition shall be deemed or construed as applicable to Site 3, more specifically identified as the Phase 3 Project, which shall be owned, developed and operated by Health Center Developer pursuant the fee simple transfer under the Health Center Purchase Agreement). "Environmental Indemnity" shall mean each of the two (2) unsecured environmental indemnity agreements (one for the Phase 1 Project and another for the Phase 2 Project), in forms agreed to by the CDC -HA and the Site 1 Owner or Site 2 Owner, as applicable, to be executed by the CDC -HA and the Site 1 Owner or Site 2 Owner, as applicable, at the Closings for each of the Phase 1 Project and the Phase 2 Project. Provided, however, it is anticipated that the Phase 1 Project and the Phase 2 Project will be one and the same project. In such event there shall be only one (1) Environmental Indemnity. "Escrow" means the escrow depository and disbursement services to be performed by Escrow Agent pursuant to the provisions of this Agreement. "Escrow Agent" means Stewart Title Company or another title insurance company mutually selected by the parties hereto. "Escrow Instructions" shall mean each of the: (i) escrow instructions (one for Site 1 and another for Site 2) to be executed by the CDC -HA and the Site 1 Owner or Site 2 Owner, as applicable, at the Closings for each of the Phase 1 Project and the Phase 2 Project (provided, however, it is anticipated that the Phase 1 Project and the Phase 2 Project will be one and the same project. In such event there shall be only one (1) set of Escrow Instructions governing both the Phase 1 and Phase.2 Project); or (ii) escrow instructions to be executed by the CDC -HA and the Health Center Developer at the Closing for the Phase 3 Project. Page 5 of 49 Attachment No. 3 Kimball Highland DDA "Extremely Low Income Household" means persons and families whose income does not exceed thirty percent (30%) of the then current Area Median Income, provided that such persons or families meet the additional requirements set forth in the Declaration. "Final Project Budget" has the meaning set forth in Section 305.2. "Governmental Requirements" means all laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the state, the county, the City, or any other political subdivision in which the Property is located, and of any other political subdivision, agency or instrumentality exercising jurisdiction over CDC -HA, Affordable Housing Developer or the Property. "Ground Lease" means the 65-year ground lease for Site 2, in a form agreed to by the CDC - HA and the Site 2 Owner, to be executed by Site 2 Owner and recorded against Site 2, at the Closing for the Phase 2 Project. "Hazardous Materials" means any hazardous or toxic substance, material or waste which is or becomes regulated by any local governmental authority, the State of California or the United State Government. Provided, however, the term "Hazardous Materials" shall not include substances typically used in the ordinary course of developing, operating and maintaining apartment complexes in California, or used in the ordinary course of the operation of healthcare facilities, or small amounts of chemicals, cleaning agents and the like commonly employed in routine household uses in a manner typical of occupants in other similar properties, provided that such substances are used in compliance with applicable laws. "Initial Project Budget" means the proforma budget attached hereto as Exhibit B and as further set forth in Section 305.1. "Leasehold" means the ground lease interest in Site 2 created by the Ground Lease. "Low Income Household" means persons and families whose income does not exceed eighty percent (80%) of the then current Area Median Income, provided that such persons or families meet the additional requirements set forth in the Declaration. "Master Plan" shall mean the Phase 1 Project, the Phase 2 Project, the Phase 3 Project and such other additional roads, right of way, or improvements within the planned development contemplated under this Agreement. "Maximum Rents" shall mean the maximum amount of consideration, of any kind whatsoever, that the Affordable Housing Developer may receive for any Affordable Unit, which monthly amount shall not exceed the product of one twelfth (1/12) of (i) thirty percent (30%) times thirty percent (30%) of the then Area Median Income as adjusted for household size appropriate for the unit with respect to the Extremely Low Income Units, (ii) thirty percent (30%) of fifty percent (50%) of the then Area Median Income as adjusted for household size appropriate for the unit with respect to the Very Low Income Units, (iii) thirty percent (30%) of sixty percent (60%) of the then Area Median Income as adjusted for household size appropriate for the unit with respect Page 6 of 49 Attachment No. 3 Kimball Highland DDA to the Low Income Units, or (iv) thirty percent (30%) of eighty percent (80%) of the then Area Median Income as adjusted for household size appropriate for the unit with respect to the Low Income Unit. Maximum Rents and associated Area Median Income levels may be adjusted pursuant to the requirements of project financing sources. "Owner" shall mean Site 1 Owner, Site 2 Owner or Health Center Developer, as applicable. "Permanent Deed of Trust" means the deed of trust recorded against Site 1 or Site 2, as applicable, for purposes of obtaining senior permanent financing for the Phase 1 Project or the Phase 2 Project respectively. The Permanent Deed of Trust relating to the Phase 2 Project shall be recorded against the Affordable Housing Developer's leasehold . interest on Site 2 only. Recordation of any deed of trust, mortgage or other instrument securing or evidencing the fee interest in Site 2 shall be a default under this Agreement, the Ground Lease, the Site 2 Declaration and the Developer Deed of Trust on Site 2. "Permitted Transfer" is defined in Section 603.2, below. "Phase 1 Project" means an approximately 85-unit affordable housing project, parking for the affordable housing project and off -site improvements to be constructed on Site 1 by the Site 1 Owner; notwithstanding the foregoing, the parties acknowledge and agree that final unit count at Phase 1 Project may be adjusted by the Affordable Housing Developer, with the written consent of the Executive Director of the CDC -HA, based on the requirements of the available financing sources and financial feasibility. Provided, however, it is anticipated that the Phase 1 Project and the Phase 2 Project will be one and the same project. "Phase 1 Project Deed of Trust" means the Developer Deed of Trust to be recorded against Site 1. Provided, however, it is anticipated that the Phase 1 Project and the Phase 2 Project will be one and the same project. In such event there shall be only one (1) Developer Deed of Trust which will constitute both the Phase 1 Project Deed of Trust and the Phase 2 Project Deed of Trust. "Phase 1 Project Note" means the promissory note in a form agreed to by the Affordable Housing Developer and CDC -HA, to be executed by the Affordable Housing Developer at the Closing for the Phase 1 Project, evidencing the loan from CDC -HA to the Affordable Housing Developer. Provided, however, it is anticipated that the Phase 1 Project and the Phase 2 Project will be one and the same project. In such event there shall be only one (1) promissory note which will constitute both the Phase 1 Project Note and the Phase 2 Project Note. "Phase 2 Project" mean an approximately 60-unit affordable housing project, Senior Center, and parking to be constructed on the leasehold interest in Site 2 by the Site 2 Owner; notwithstanding the foregoing, the parties acknowledge and agree that final unit count at Phase 2 Project may be adjusted by the Affordable Housing Developer, with the written consent of the Executive Director of the CDC -HA, based on the requirements of the available financing sources and financial feasibility. Provided, however, it is anticipated that the Phase 1 Project and the Phase 2 Project will be one and the same project Page 7 of 49 Attachment No. 3 Kimball Highland DDA "Phase 2 Project Deed of Trust" means the Developer Deed of Trust to be recorded against Site 2. Provided, however, it is anticipated that the Phase 2 Project and the Phase 2 Project will be one and the same project. In such event there shall be only one (1) Developer Deed of Trust which will constitute both the Phase 1 Project Deed of Trust and the Phase 2 Project Deed of Trust. "Phase 2 Project Note" means the promissory note in a form agreed to by the Affordable Housing Developer and CDC -HA, to be executed by the Affordable Housing Developer at the Closing for the Phase 2 Project evidencing the loan from CDC -HA to the Affordable Housing Developer. Provided, however, it is anticipated that the Phase 1 Project and the Phase 2 Project will be one and the same project. In such event there shall be only one (1) promissory note which will constitute both the Phase 1 Project Note and the Phase 2 Project Note. "Phase 3 Project" means the Program of All -Inclusive Care for the Elderly Clinic and Federally Qualified Health Center to be developed by Health Center Developer on Health Center Site, parking for the Program of All -Inclusive Care for the Elderly Clinic and Federally Qualified Health Center, the street vacation and creation of a cul-de-sac at Kimball Way all to be constructed on Site 3. "Project Budget" means the Phase 1 Initial Project Budget or Final Project Budget or the Phase 2 Initial Project Budget or Final Project Budget, as applicable. Provided, however, it is anticipated that the Phase 1 Project and the Phase 2 Project will be one and the same project. In such event there shall be only one (1) Project Budget. "Project Design and Plan" means the design and plan for each of Phase 1 Project, Phase 2 Project or Phase 3 Project, as applicable, which shall set forth the design, plan and construction work, including without limitation, landscaping, flatwork and similar work, to be done with respect to the Phase 1 Project, Phase 2 Project or the Phase 3 Project respectively, each of which shall be subject to the approval of the Executive Director of the CDC -HA, Which approval shall not be unreasonably withheld, conditioned or delayed. Provided, however, it is anticipated that the Phase 1 Project and the Phase 2 Project will be one and the same project. In such event there shall be one (1) Project Design and Plan which will constitute the design and plan for both the Phase 1 Project and the Phase 2 Project. "Security Agreement" shall mean each of the two (2) security agreements (one for the Phase 1 Project and another for the Phase 2 Project), in forms agreed to by the CDC -HA and the Site 1 Owner or Site 2 Owner, as applicable, to be executed by the CDC -HA and the Site 1 Owner or Site 2 Owner, as applicable, at the Closings for each of the Phase 1 Project and the Phase 2 Project; Provided, however, it is anticipated that the Phase 1 Project and the Phase 2 Project will be one and the same project. In such event there shall be only one (1) Security Agreement which will constitute the security agreement for both the Phase 1 Project and the Phase 2 Project. Page 8 of 49 Attachment No. 3 Kimball Highland DDA "Senior Center" shall mean a commercial space located at the Phase 2 Project, which shall be approximately 8,800 square feet, and constructed, furnished and equipped as reasonably necessary for turnkey operation, with complete fit and finish, including all necessities to make it usable as a senior center, including without limitation, complete flooring, restrooms, paint, HVAC, electrical, demising walls and doors, hardware, lighting, and plumbing, constructed pursuant to a design approved by the CDC -HA, which shall be used by CDC -HA as a Senior Center for the community consistent with the requirements of IRC Section 42(d)(4)(C) pertaining to community service facility. "Senior Center Lease" shall mean that certain Commercial Lease to be entered into by and between the Affordable Housing Developer and the City relating to the Senior Center, which shall be a triple net lease for a term of 65 years for a rent equal to $1.00 per year. "Site 1" means that certain real property described as 560-050-06, 560-050-12 and 560- 050-10 and shown on the Parcel Map attached hereto as Exhibit A, upon which the Site 1 Owner shall construct the Phase 1 Project. "Site 1 Owner" shall mean owner of Site 1, which Site 1 Owner shall be a California limited partnership, whose sole general partner shall be a California limited liability company that is wholly owned by the Affordable Housing Developer. "Site 2" means that certain real property described as APN 560-410-06 and shown on the Parcel Map attached hereto as Exhibit A, which the CDC -HA intends to lease to the Site 2 Owner, upon which the Site 2 Owner shall construct the Phase 2 Project. "Site 2 Owner" shall mean owner of Site 2, which Site 2 Owner shall be a California limited partnership, whose sole general partner shall be a California limited liability company that is wholly owned by the Affordable Housing Developer. "Site 3" means the real property 'upon which the Health Center Developer shall construct the Phase 3 Project, which shall include the Kimball Public Right of Way, that certain real property described as all of APN 560-410-03, and portions of APN 560-050-06 and 560-050-12 shown on the Parcel Map attached hereto as Exhibit A. "TCAC Lease Rider" means the then current form of lease rider prepared by the California Tax Credit Allocation Committee at the time the Site 2 Owner enters into the Ground Lease relating to Site 2. "Very Low Income Household" means persons and families whose income does not exceed fifty percent (50%) of the then current Area Median Income, provided that such persons or families meet the additional requirements set forth in the Declaration. Page 9 of 49 Attachment No. 3 Kimball Highland DDA 200. Transfer of the Property. 201, Ground Lease and Fee Acquisition Terms. 201,1 Phase 1 Project. The Affordable Housing Developer shall transfer Site 1 to Site 1 Owner and shall cause the Site 1 Owner to construct the Phase 1 Project on Site 1. 201.2 Phase 2 Project. Subject to all of the terms and conditions of this Agreement and the Ground Lease, the CDC -HA shall ground lease Site 2 to the Site 2 Owner pursuant to the terms of the Ground Lease. The rent payable by the Affordable Housing or the Site 2 Owner, as applicable, to the CDC -HA shall be the leasehold value as determined by an appraisal satisfactory to the CDC -HA within 120 days of execution of this Agreement, which amount shall be paid as a single, capitalized rent payment at the Closing for Site 2. The Affordable Housing Developer shall cause the Site 2 Owner to construct the Phase 2 Project and the Senior Center on Site 2. 201.3 Phase 3 Project. (a) The Affordable Housing Developer shall acquire the Peterson Property and shall transfer all of APN 560-410-03, and portions of APN 560-050-06 and 560-050-12 to Health Center Developer. The CDC -HA shall transfer the Kimball Public Right of Way. (b) Subject to all of the terms and conditions of this Agreement, the CDC -HA shall sell the Kimball Public Right of Way to Health Center Developer, and Health Center Developer shall purchase the Kimball Public Right of Way from the CDC -HA at the Closing for the Phase 3 Project. The purchase price for the Kimball Public Right of Way shall be as determined by an appraisal satisfactory to the Health Center Developer and CDC -HA prior to the transfer of the Kimball Public Right of Way from the CDC -HA to the Health Center Developer. The Kimball Public Right of Way shall be conveyed to the Health Center Developer in an "as is" physical and environmental condition, with no warranty, express or implied, by the CDC -HA as to the condition of any existing improvements, the soil, its geology, the presence of known or unknown faults or Hazardous Materials or toxic substances, and it shall be the sole responsibility of the Health Center Developer at its expense to investigate and determine the physical and environmental conditions. (1) Health Center Developer and the CDC -HA shall open an escrow ("Escrow") with Escrow Agent to facilitate the Closing and conveyance of the Kimball Public Right of Way from the CDC -HA to the Health Center Developer. The parties will execute escrow instructions prior to the Closing, which shall provide for the order of recordation, distribution of original documents and .other provisions customarily contained in escrow instructions. Health Center Developer shall pay all fees, charges, and costs which arise from Escrow, including without limitation the premiums for the any title policies, as well as all documentary transfer taxes, if any, due with respect to Health Center Developer's acquisition of the Kimball Public Right of Way (2) Closing Conditions for the Benefit of the CDC -HA. The CDC-HA's obligation to transfer the Kimball Public Right of Way to the Health Center Developer is conditioned upon satisfaction (or waiver) of each and all of the conditions set forth in this Section on or before the Closing. Any such waiver shall be effective only if the same is (i) expressly Page 10 of 49 Attachment No. 3 Kimball Highland DDA waived in writing signed by the CDC -HA or by email from the CDC -HA, and (ii) delivered or emailed to the Health Center Developer and Escrow Agent. In the event that one or more of the conditions set forth in this Section are not satisfied or expressly waived on or before the Closing, the CDC -HA (provided the CDC -HA is not in default hereunder) may unilaterally terminate this Agreement by mailing or emailing notice of conditional termination to the Health Center Developer and Escrow Agent. After receipt of such notice of conditional termination, the Health Center Developer shall have five (5) business days to cure any non -satisfaction of a condition or other default specified in the notice of conditional termination. If such matter is unsatisfied or cured prior to the expiration of such five (5) day period, then the Closing shall proceed and the CDC -HA waives any right to damages or compensation with respect to the unsatisfied condition. If such matter remains unsatisfied or the default remains uncured after the expiration of such five (5) day period, then this Agreement shall terminate at the close of business on such fifth (5th) day. Any such termination of this Agreement shall not release the Health Center Developer from liability under this Agreement. (a) No Default. Health Center Developer is not in default in any of its obligations under the terms of this Agreement. (b) Funds and Documents. The deposit by the Health Center Developer into Escrow of all funds and other documents and instruments required by this Agreement or by the Escrow Agent. • (c) Street Vacation. The City has vacated the Kimball Public Right of Way. (3) Closing Conditions for the Benefit of the Health Center Developer. The Health Center Developer's obligation to close on the Kimball Public Right of Way is conditioned upon satisfaction (or waiver) of each and all of the conditions set forth in this Section on or before the Closing. Any such waiver shall be effective only if the same is (i) expressly waived in writing signed by the Health Center Developer or by email from the Health Center Developer, and (ii) delivered or emailed to the CDC -HA and Escrow Agent. In the event that one or more of the conditions set forth in this Section are not satisfied or expressly waived on or before the Closing, the Health Center Developer (provided the Health Center Developer is not in default hereunder) may unilaterally terminate this Agreement by mailing or emailing notice of conditional termination to the CDC -HA and Escrow Agent. After receipt of such notice of conditional termination, the CDC -HA shall have five (5) business days to cure any non -satisfaction of a condition or other default specified in the notice of conditional termination. If such matter is unsatisfied or cured prior to the expiration of such five (5) day period, then the Closing shall proceed and the Health Center Developer waives any right to damages or compensation with respect to the unsatisfied condition. If such matter remains unsatisfied or the default remains uncured after the expiration of such five -(5) day period, then this Agreement shall terminate at the close of business on such fifth (5th) day. Any such termination of this Agreement shall not release the CDC -HA from liability under this Agreement. Page 11 of 49 Attachment No. 3 Kimball Highland DDA (a) No Default. The CDC -HA is not in default in any of its obligations under the terms of this Agreement. (b) Grant Deed. The CDC -HA has deposited the duly executed and acknowledged Grant Deed into Escrow. (c) Additional Documents. The deposit by the CDC -HA into Escrow of all other documents and instruments reasonably required by the Escrow Agent. (d) Purchase and Sales Agreement. The Health Center Developer has agreed to the purchase price and terms and conditions for the sale and transfer of Site 3. (e) Financing. The Health Center Developer has obtained approval of the terms and conditions of this Agreement from its Board of Trustees, has obtained financing terms that are satisfactory to the Board of Trustees and has obtained the consent of California Bank & Trust to incur new debt. 202. Financing of Phase 1 Project, Phase 2 Project and Phase 3 Project; Lease of Senior Center. 202,1 Acquisition and Construction Loan for Phase 1 Project and Phase 2 Project. The Affordable Housing Developer intends to finance the acquisition and construction of the Phase 1 Project and Phase 2 Project as a single-phase project. CDC -HA has agreed to provide the Site 1 Owner and Site 2 Owner (which may be the same person) an acquisition and construction loan for the Phase 1 Project and the Phase 2 Project which in the aggregate equal the CDC -HA Loan Amount, which loan shall be evidenced by the Phase 1 Project Note and the Phase 2 Project Note (which will be combined into a single promissory note in the event the Phase 1 Project and Phase 2 Project are owned, constructed and financed as a single project, if so combined, the "Project Promissory Note"). The Phase 1 Project Note and the Phase 2 Project Note will be secured by the Phase 1 Deed of Trust, the Phase 2 Deed of Trust which will be combined into a single deed of trust in the event the Phase 1 Project and Phase 2 Project are owned, constructed and financed as a single project) and such other documents as required by CDC -HA in its reasonable discretion to document and secure such loan. In the event the Affordable Housing Developer is unable to develop the Phase 1 Project and Phase 2 Project as a single phase project and must separately finance the acquisition and construction of the Phase 1 Project and the Phase 2 Project, then the Affordable Housing Developer may separate the Project Promissory Note into the Phase 1 Project Note and the Phase 2 Project Note (which combined shall not exceed the CDC -HA Loan Amount), to be secured by the Phase 1 Deed of Trust and Phase 2 Deed of Trust, respectively. The original principal amounts of such Phase 1 Project Note and the Phase 2 Project Note shall be subject to the approval of the Executive Director of the CDC -HA. The Project Promissory Note shall be for a term of 55 years from the Closing, shall bear simple interest rate of 3% and shall be repayable from 50% of the aggregate annual cash flow from the Phase 1 Project and Phase 2 Project (after payment of partnership management fee of $25,000, asset management fee of $12,500 and any deferred developer fee, the amount of any deferred developer fee shall be subject to the approval of the Executive Director of the CDC -HA) and shared with any other residual receipts lenders which are approved by the Executive Director of the CDC -HA. In the event the Phase 1 Project Page 12 of 49 Attachment No.3 Kimball Highland DDA and Phase 2 Project are separately financed, then each of the Phase 1 Project Note and Phase 2 Project Note shall be for a term of 55 years from the Closing, shall bear interest rate of 3% and shall be repayable from 50% of the annual cash flow from each of the Phase 1 Project or Phase 2 Project, as applicable (after payment of partnership management fee of $20,000 in each of Phase 1 Project or Phase 2 Project, as applicable), asset management fee of $7,500 (in each of Phase 1 Project and Phase 2 Project, as applicable) and any deferred developer fee, the amount of any deferred developer fee shall be subject to the approval of the Executive Director of the CDC -HA (in each of Phase 1 Project or Phase 2 Project, as applicable) and shared with any other residual receipts lenders which are approved by the Executive Director of the CDC -HA. The Project Promissory Note or the Phase 1 Project Note and the Phase 2 Project Note, as applicable, and Phase 1 Deed of Trust and Phase 2 Deed of Trust shall be subordinated to the Construction Deed of Trust and Permanent Deed of Trust. The Affordable Housing Developer shall have the right to refinance the senior construction or permanent loan, provided that the refmanced senior construction or permanent loan shall not (i) increase the stated rateof interest, (ii) decrease the term; (iii) increase the principal amount of the indebtedness to which the Phase 1 Project Deed of Trust or the Phase 2 Project Deed of Trust will be subordinate; and (iv) the Affordable Housing Developer (or the Site 1 Owner or Site 2 Owner, as applicable) does not receive any cash, as a result of the refinancing. In such event, the Project Promissory Note, or Phase 1 Project Note and Phase 2 Project Note, the Phase 1 Project Deed of Trust and the Phase 2 Project Deed of Trust shall be subordinated to such refinanced senior construction or permanent loan, provided that the Executive Director of the CDC -HA has reasonably approved the same. Any cost savings as determined by the accountant for the Phase 1 Project and the Phase 2 Project shall be used to first pay off project costs (including any deferred developer fee which is approved by the Executive Director of the CDC -HA) for the Phase 1 Project and the Phase 2 Project, and then to be shared fifty percent (50%) to the Affordable Housing Developer and the other fifty percent (50%) to the CDC -HA and other soft lenders, which are approved by the Executive Director of the CDC -HA, in proportion to the original principal balance of their loans. 202.2 Senior Center Located at Site 2. Following the construction completion of the Phase 2 Project by the Affordable Housing Developer, including without limitation, completion of construction, furnishing and equipping the Senior Center, as set forth in the definition of "Senior Center, as set forth above, the Affordable Housing Developer shall lease the Senior Center located within the Phase 2 Project to the City pursuant to the Senior Center Lease. 202.3 Financing of the Acquisition and Construction, Operation and Maintenance of the Health Care Center. The parties hereto acknowledge and agree that the financing of the acquisition and construction and operation and maintenance of the Phase 3 Project shall be the sole responsibility of the Health Center Developer. Notwithstanding the foregoing, CDC -HA, the Affordable Housing Developer and Health Center Developer acknowledge and agree that the Phase 3 Project is an integral part of the Master Plan contemplated under this Agreement and that the parties hereto will work cooperatively in the design and planning of each of the Phase 1 Project, the Phase 2 Project and Phase 3 Project. Page 13 of 49 Attachment No. 3 Kimball Highland DDA 203. Escrow. 203.1 Phase 1 Project. Prior to the Closing Deadline for the Phase 1 Project, the Affordable Housing Developer shall open the Escrow with Escrow Agent to facilitate the Closing for the Phase 1 Project, the loan evidenced by the Phase 1 Project Note and recordation of the various encumbrances on the Phase 1 Project. The parties will execute the Escrow Instructions prior to the Closing for the Phase 1 Project, which shall provide for the order of recordation, distribution of original documents and other provisions customarily contained in escrow instructions. The Affordable Housing Developer shall pay all fees, charges, and costs which arise from Escrow, as well as all documentary transfer taxes due with respect to the Affordable Housing Developer's acquisition of the Site 1. 203.2 Phase 2 Project. Prior to the Closing Deadline for the Phase 2 Project, the Affordable Housing Developer and the CDC -HA shall open the Escrow with Escrow Agent to facilitate the Closing for the Phase 2 Project and the Ground Lease of Site 2 to the Affordable Housing Developer and recordation of the various encumbrances on the Leasehold. The parties will execute the Escrow Instructions prior to the Closing for the Phase 2 Project, which shall provide for the order of recordation, distribution of original documents and other provisions customarily contained in escrow instructions. The Affordable Housing Developer shall pay all fees, charges, and costs which arise from Escrow, as well as all documentary transfer taxes due with respect to the Affordable Housing Developer's acquisition of the Leasehold. 203.3 Phase 3 Project. Prior to the Closing Deadline for the Phase 3 Project, the Health Center Developer, CDC -HA and the Affordable Housing Developer shall open the Escrow with Escrow Agent to facilitate the Closing for the Phase 3 Project and recordation of the various encumbrances on the Phase 3 Project. The parties will execute the Escrow Instructions prior to the Closing for the Phase 3 Project, which shall provide for the transfer of fee title by CDC -HA to the Kimball Public Right of way to Health Center Developer, the transfer of fee title by the Affordable Housing Developer of the Health Center Site, order of recordation, distribution of original documents and other provisions customarily contained in escrow instructions. The Health Center Developer shall pay all fees, charges, and costs which arise from Escrow, as well as all documentary transfer taxes due with respect to the Health Center Developer's acquisition of the Kimball Public Right of Way and the Health Center Site. 204. Conditions to Closing. 204.1 Closing Conditions in Favor of Both Affordable Housing Developer and CDC -HA. The Closing for the Phase 1 Project and the Closing for the Phase 2 Project are each individually conditioned upon satisfaction (or waiver) of each and all of the conditions set forth in this Section 204.1 on or before the Closing Deadline for the Phase 1 Project or the Closing Deadline for the Phase 2 Project, as applicable. In the event that one or more of the conditions set forth in this Section 204.1, are not satisfied with respect to the Phase 1 Project on or before the Closing Deadline for the Phase 1 Project, then this Agreement shall be terminated with respect to the Phase 1 Project, unless the CDC -HA, the Affordable Housing Developer waive satisfaction of such condition or conditions in writing, in which event the Closing for the Phase 1 Project, shall Page 14 of 49 Attachment No. 3 Kimball Highland DDA proceed and the parties waive any right to damages or compensation with respect to the unsatisfied condition. In the event the Closing for the Phase 1 Project has occurred (or would occur concurrently with the Closing for the Phase 2 Project), and then one or more of the conditions set forth in this Section 204.1, are not satisfied with respect to the Phase 2 Project on or before the Closing Deadline for the Phase 2 Project, then this Agreement shall be terminated with respect to the Phase 2 Project, unless the CDC -HA and the Affordable Housing Developer waive satisfaction of such condition or conditions in writing, in which event the Closing for the Phase 2 Project, shall proceed and both parties waive any right to damages or compensation with respect to the unsatisfied condition, subject to any extensions which may be agreed upon pursuant to Section 602 herein. To the extent (i) all closing conditions have been met with respect to the Phase 1 Project, and the parties have closed on the Phase 1 Project, the failure to meet closing conditions on the Phase 2 Project shall not be grounds for a termination of this Agreement with respect to the Phase 1 Project or any other Agreement by and among Affordable Housing Developer, National City and/or CDC -HA regarding the Phase 1 Project; and (ii) all closing conditions have been met with respect to the Phase 2 Project, and the parties have closed on the Phase 2 Project, the failure to meet closing conditions on the Phase 1 Project shall not be grounds for a termination of this Agreement with respect to the Phase 2 Project or any other Agreement by and among Affordable Housing Developer, National City and/or CDC -HA regarding the Phase 2 Project. It is expressly understood and agreed to that Phase 1 Project and Phase 2 Project may (i) close concurrently, (ii) close as a single phase project if financing permits, or (iii) commence independent of each other and closing for each of Phase 1 Project and Phase 2 Project may occur separately during the term of this Agreement. (a) Project Design and Plan. Developer shall have obtained approval from the CDC -HA of the Project Design and Plan for the Phase 1 Project or the Phase 2 Project, as applicable. (b) TCAC Award. (1) Phase 1 Project. The Affordable Housing Developer shall have obtained an allocation or reservation of either 4% or 9% low income housing tax credits from the California Tax Credit Allocation Committee for the Phase 1 Project and if 4% low income housing tax credits, an accompanying allocation of tax exempt bonds from the California Debt Limit Allocation Committee for the Phase 1 Project. It is expressly understood and agreed that the Affordable Housing Developer may need to apply for either 4% or 9% through multiple rounds during the term of this Agreement. (2) Phase 2 Project. The Affordable Housing Developer shall have obtained an allocation or reservation of either 4% or 9% low income housing tax credits from the California Tax Credit Allocation Committee for the Phase 2 Project and if 4% low income housing tax credits, an accompanying allocation of tax exempt bonds from the California Debt Limit Allocation Committee for the Phase 2 Project. It is expressly understood and agreed that the Affordable Housing Developer may need to apply for either 4% or 9% through multiple rounds during the term of this Agreement. Page 15 of 49 Attachment No. 3 Kimball Highland DDA (c) Performance and Payment Bond. The Affordable Housing Affordable shall have caused its contractor to post security in the form of a performance and payment bond for each of the Phase 1 Project and Phase 2 Project in an amount and in a form acceptable to the CDC -HA in its reasonable discretion, to assure the completion of the Project Design and Plan. Each performance and payment bond shall insure that construction completion based on the Project Design and Plan with respect to each of Phase 1 Project or Phase 2 Project, as applicable, is timely accomplished, free and clear of mechanic's liens, stop notices and other encumbrances, concerning the provision of material,' labor and supplies. Upon a failure of by the Affordable Housing Developer to timely perform its requirements under the terms of this Agreement, the CDC -HA may resort to the performance and payment bond to ensure performance of this Agreement, by either requiring the bonding company, or its designees, to comply with the terms of this Agreement, or at the election of the CDC -HA, by requiring the bonding company to pay all costs necessary for the CDC -HA, to take over and complete the construction as contemplated under the Project Design and Plan at the cost and expense of the bonding company. (d) Construction Contract. The construction contract for the Phase 1 Project or the Phase 2 Project, as applicable, acceptable to the CDC -HA, shall have been executed by the Affordable Housing Developer and the general contractor who has been selected by the Affordable Housing Developer to do the work. The general contractor and the construction contract for each of Phase 1 Project and Phase 2 Project shall be subject to the approval of CDC -HA, which approval shall not be unreasonably withheld, conditioned or delayed. (e) Entitlements. The Affordable Housing Developer shall have secured any and all land use and other entitlements, permits and approvals which may be required for completion of the Project Design and Plan for the Phase 1 Project or the Phase 2 Project, as applicable (the "Entitlements"). The Master Developer shall have paid any and all applicable fees (including, without limitation, communities facility district fees and public facilities fees imposed by the City or any other governmental agency having jurisdiction with respect to the same) (collectively, the "City and Permit Fees"), or shall pay such fees concurrently with Closing for the Phase 1 Project or the Phase 2 Project, as applicable. The CDC -HA shall not be responsible in any way for, the processing of Developer's building permits or other permit applications with the City. The execution of this Agreement does not constitute the granting of or a commitment to obtain any required land use permits, entitlements or approvals. (f) Title Policies. Escrow Agent is prepared and irrevocably obligated to cause to be issued: (i) a title policy insuring the Affordable Housing Developer's interest in the Phase 1 Project or the Affordable Housing Developer's interest in the Phase 2 Project, as applicable; and (ii) a title policy insuring the CDC-HA's interest in the Phase 1 Project Deed of Trust for the Phase 1 Project or the Phase 2 Project Deed of Trust for the Phase 2 Project, as applicable. Page 16 of 49 Attachment No. 3 Kimball Highland DDA (g) Forms of Documents. The CDC -HA and the Affordable Housing Developer have agreed (or will agree prior to Closing of the Phase 1 Project or the Closing of the Phase 2 Project, as applicable) to the forms of the Ground Lease, Declaration, Phase 1 Project Note, Phase 1 Project Deed of Trust,' Phase 2 Project Note, Phase 2 Project Deed of Trust, Security Agreement, Environmental Indemnity and all other documents reasonably necessary to complete the Closing for the Phase 1 Project or the Phase 2 Project, as applicable. (h) Financing. Concurrently with the Closing for the Phase 1 Project or Closing for the Phase 2 Project, as applicable, the Affordable Housing Developer shall have obtained all fmancing and lender approvals necessary to acquire Phase 1 Project or the Phase 2 Project, as applicable, and complete the applicable Project Design and Plan. 204.2 Closing Conditions for the Benefit of the CDC -HA. The CDC-HA's obligation to Close on each of the Phase 1 Project and the Phase 2 Project are conditioned upon satisfaction (or waiver) of each and all of the conditions set forth in this Section 204.2 on or before the Closing Deadline for the Phase 1 Project or the Closing Deadline for the Phase 2 Project, as applicable. Any such waiver shall be effective only if the same is (i) expressly waived in writing signed by the CDC -HA or by email from the CDC -HA, and (ii) delivered or emailed to the Developer and Escrow Agent. In the event that one or more of the conditions set forth in this Section 204.2 are not satisfied or expressly waived on or before the Closing Deadline for the Phase 1 Project, the CDC -HA (provided the CDC -HA is not in default hereunder) may unilaterally terminate this Agreement by mailing or emailing notice of conditional termination to the Affordable Housing Developer and Escrow Agent with respect to the Phase 1 Project. In the event the Closing for the Phase 1 Project has occurred, and if one or more of the conditions set forth in this Section 204.2 are not satisfied or expressly waived on or before the Closing Deadline for the Phase 2 Project, the CDC -HA (provided the CDC -HA is not in default hereunder) may unilaterally terminate this Agreement with respect to the Phase 2 Project by mailing or emailing notice of conditional termination to the Affordable Housing Developer and Escrow Agent. After receipt of any such notice of conditional termination, the Phase 1 Project or the Phase 2 Project; as applicable, shall have ten (10) business days to cure any non -satisfaction of a condition or other default specified in the notice of conditional termination. If such matter is satisfied or cured prior to the expiration of such ten (10) day period, then the Closing for the Phase 1 Project or the Closing for the Phase 2 Project, as applicable, shall proceed and the CDC -HA shall be deemed to have waived any right to damages or compensation with respect to the unsatisfied condition. If such matter remains unsatisfied or the default remains uncured after the expiration of such ten (10) day period with respect to the Phase 1 Project, then this Agreement shall terminate at the close of business on such tenth (loth) day with respect to the Phase 1 Project. In the event any such matter remains unsatisfied or the default remains uncured after the expiration of such ten (10) day period with respect to the Phase 2 Project, then this Agreement shall terminate with respect to the Phase 2 Project at the close of business on such tenth (loth) day. Any such termination of this Agreement shall not release the Affordable Housing Developer from liability under this Agreement.. Page 17 of 49 Attachment No. 3 Kimball Highland DDA (a) No Default. The Affordable Housing Developer is not in default in any of its obligations under the terms of this Agreement and all representations and warranties made by the same to the CDC -HA contained herein shall be true and correct in all material respects. (b) Insurance. The Affordable Housing Developer shall have provided proof of insurance as required by the CDC -HA. (c) Attorneys' and Experts' Fees. The Affordable Housing Developer has paid prior to or will pay concurrently with the Closing for the Phase 1 Project or the Closing for the Phase 2 Project, as applicable, all consultants', experts' and attorneys' fees incurred by the CDC -HA with respect to the same. (d) Deposit of Documents. The Affordable Housing Developer has duly executed and (where necessary) caused to be notarized the Ground Lease, Declaration, Phase 1 Project Note, Phase 1 Deed of Trust, Phase 2 Project Note, Phase 2 Deed of Trust, Security Agreement, Environmental Indemnity and all other documents reasonably required by the CDC -HA or reasonably necessary to complete the Closing for the Phase 1 Project or the Phase 2 Project, as applicable, and has deposited the same into Escrow. (e) Additional Documents. The deposit by the Affordable Housing Developer into Escrow of all other documents and instruments reasonably required by Escrow. 204.3 Closing Conditions for the Benefit of the Affordable Housing Developer. The Affordable Housing Developer's obligation to Close on each of the Phase 1 Project and the Phase 2 Project are conditioned upon satisfaction (or waiver) of each and all of the conditions set forth in this Section 204.3 on or before the Closing Deadline for the Phase 1 Project or the Closing Deadline for the Phase 2 Project, as applicable. Any such waiver shall be effective only if the same is (i) expressly waived in writing signed by, or by email from, the Affordable Housing Developer, and (ii) delivered or emailed to the CDC -HA and Escrow Agent. In the event that one or more of the conditions set forth in this Section 204.3 are not satisfied or expressly waived on or before the Closing Deadline for the Phase 1 Project, the Affordable Housing Developer (provided the Phase 1 Project is not in default hereunder) may unilaterally terminate this Agreement by mailing or emailing notice of conditional termination to the CDC -HA and Escrow Agent with respect to the Phase 1 Project. In the event one or more of the conditions set forth in this Section 204.3 are not satisfied or expressly waived on or before the Closing Deadline for the Phase.2 Project, the Affordable Housing Developer (provided the Affordable Housing Developer is not in default hereunder) may unilaterally terminate this Agreement with respect to the. Phase 2 Project by mailing or emailing notice of conditional termination to the CDC -HA and Escrow Agent. After receipt of such notice of conditional termination, the CDC -HA shall have ten (10) business days to cure any non -satisfaction of a condition or other default specified in the notice of conditional termination. If such matter is satisfied or cured prior to the expiration of such ten (10) day period, then the Closing for the Phase 1 Project or the Closing for the Phase 2 Project, as applicable, shall proceed and the Affordable Housing Developer waives any right to damages or compensation. with Page 18 of 49 Attachment No. 3 Kimball Highland DDA respect to the unsatisfied condition. If such matter remains unsatisfied or the default remains uncured after the expiration of such ten (10) day period with respect to the Phase 1 Project, then this Agreement shall terminate at the close of business on such ten (loth) day with respect to Phase 1 Project. In the event any such matter remains unsatisfied or the default remains uncured after the expiration of such ten (10) day period with respect to the Phase 2 Project, then this Agreement shall terminate with respect to the Phase 2 Project at the close of business on such tenth (loth) day. Any such termination of this Agreement shall not release the CDC -HA from liability under this Agreement. (a) No Default. The CDC -HA is not in default in any of its obligations under the terms of this Agreement and all representations and warranties of the CDC -HA contained herein shall•be true and correct in all material respects. (b) Deposit of Documents. The CDC -HA has duly executed and (where necessary) caused to be notarized the Ground Lease, Declaration, Phase 1 Project Deed of Trust, Phase 2 Project Deed of Trust, Security Agreement, Environmental Indemnity and all other documents reasonably required by the CDC -HA or reasonably necessary to complete the Closing for the Phase 1 Project or the Phase 2 Project, as applicable, and has deposited the same into Escrow. (c) Additional Documents. The deposit by the CDC -HA into Escrow of all other documents and instruments reasonably required by Escrow. 205. Financing Plan. It is anticipated that the Phase 1 Project and the Phase 2 Project will be financed by 4% or 9% low income housing tax credits (either as a single project or separate project), senior construction and permanent loan by a private lender and the Project 1 Note and Project 2 Note. Notwithstanding the foregoing, the Affordable Housing Developer shall have the right to propose an alternative financing plan subject to the approval of the Executive Director of the CDC -HA, provided, no secured loan, deed of trust, or encumbrance, except for the Construction Deed of Trust and Permanent Deed of Trust shall be placed upon any portion of the Phase 1 Project or Phase 2 Project, whether by refinancing or otherwise, without first obtaining the express written consent of the Executive Director of the CDC -HA, which consent shall not be unreasonably delayed, conditioned or withheld. Further, any refmancing or subsequent encumbrance shall be subject to the Executive Director of the CDC-HA's reasonable approval, and CDC -HA shall be provided American Land Title Association ("ALTA") title insurance policy or endorsements acceptable to the CDC -HA, at the cost and expense of Affordable Housing Developer. Failure to obtain such written consent shall be a Default hereunder and such unconsented to financing or refinancing shall be void. Except for Permitted Transfers and refinancing allowed by this Section 205, if Affordable Housing Developer refinances the Phase 1 Project or Phase 2 Project without previously obtaining the CDC-HA's prior written consent, the CDC -HA shall receive one hundred percent (100%) of the net amount of the refinancing. With regard to any alternative financing plan, so long as the alternative financing plan will not result in an increase in the size of the Project 1. Note or Project 2 Note, any approval relating to the alternative financing may be approved by the Executive Director of CDC -HA administratively. Page 19 of 49 Attachment No. 3 Kimball Highland DDA 206. Default. Notwithstanding Section 501, below, or anything contained herein to the contrary, after the Closings for each of the Phase 1 Project and the Phase 2 Project, in the event of any Default, beyond any applicable cure period, in the performance of any of the terms, covenants and conditions contained in: (i) this Agreement (subject to a 30 days cure period); (ii) any document or instrument executed by the Affordable Housing Developer in conjunction with this Agreement; (iii) any prior or junior note secured by an encumbrance on the Phase 1 Project or the Phase 2 Project, as applicable, or any portions of such leaseholds; (iv) any note or deed of trust given in conjunction herewith; (v) in the event of the filing of a bankruptcy proceeding by the Affordable Housing Developer; or (vi) in the event of the filing of a bankruptcy against the Affordable Housing Developer which is not dismissed within ninety (90) days of filing, then (a) all sums owing by the Affordable Housing Developer, to the CDC -HA with respect to the Phase 1 Project or Phase 2 Project, respectively, shall at the option of CDC -HA immediately become due and payable; (b) the CDC -HA shall have the right to foreclosure under the applicable Phase 1 Project Deed of Trust or Phase 2 Project Deed of Trust; and (c) CDC -HA shall be released from any and all obligations to Affordable Housing Developer under the terms of this Agreement to the Affordable Housing Project with respect to Phase 1 Project or Phase 2 Project that is then in Default. These remedies shall be in addition to any and all other rights and remedies available to CDC -HA, either at law or in equity. Further, default interest shall accrue on the principal balance of the Phase 1 Project Note or Phase 2 Project Note, as applicable, from the date of the Phase 1 Project Note or Phase 2 Project, as applicable, at the rate of ten percent (10%) simple interest per annum or the maximum rate than allowed by law, whichever is less. Notwithstanding anything to the contrary set forth in this Agreement, in all instances hereunder, but only if the Phase 1 Project and the Phase 2 Project are constructed, owned and financed as separate developments, then, all rights, duties and obligations of the owner of the Phase 1 Project shall be the rights, duties and obligations solely of the owner of the Phase 1 Project (and not of the owner of the Phase 2 Project), and all rights, duties and obligations of the Phase 2 Project hereunder with respect to the Phase 2 Project, shall be the rights, duties and obligations solely of the owner of the Phase 2 Project (and not of the owner of the Phase 1 Project), it being the intent of the parties hereto that the rights, duties and obligations of the owner of the Phase 1 Project and the rights, duties and obligations of the Phase 2 Project shall not be cross -defaulted if built as separate, stand-alone projects. 207. Representations and Warranties. 207.1 CDC -HA Representations and Warranties. CDC -HA represents and warrants to Affordable Housing Developer and Health Center Developer that the CDC -HA is a public body, corporate and politic, existing pursuant to the California Community Redevelopment Law (California Health and Safety Code Section 33000), which has been authorized to transact business pursuant to action of the City. CDC -HA has full right, power and lawful authority to take all actions and undertake all obligations required of the CDC -HA under this Agreement. 207.2 Affordable Housing Developer's Representations and Warranties. The Affordable Housing Developer represents and warrants to CDC -HA and Health Center Developer as follows: (a) Authority. The Affordable Housing Developer is a California nonprofit public benefit corporation. The persons executing this Agreement on behalf of Page 20 of 49 Attachment No. 3 Kimball Highland DDA the Affordable Housing Developerhave all necessary authority to execute this Agreement on behalf of Affordable Housing Developer, and this Agreement is a binding obligation of Affordable Housing Developer. Copies of the Articles of Incorporation and Bylaws of the Affordable Housing Developer will be delivered to CDC -HA five (5) business days prior to final approval of the Agreement and within five (5) business days of each Closing. These copies will be true, complete and fully -executed copies of the originals, as amended to the date of this Agreement. The Affordable Housing Developer has and will have full right, power and lawful authority to enter into the Ground Lease and undertake all obligations as provided in this Agreement. (b) No Conflict. Affordable Housing 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 Affordable Housing Developer is a party or by which it is bound. (c) No Bankruptcy. Affordable Housing Developer is not the subject of a bankruptcy proceeding. (d) Rent and Occupancy Restrictions. Affordable Housing Developer shall at all times after the Closing during the 55-year term comply with the requirements of the Declaration. 207.3 Health Center Developer's Representations and Warranties. The Health Center Developer represents and warrants to CDC -HA and the Affordable Housing Developer as follows: (a) Authority. The Health Center Developer is a California nonprofit public benefit corporation. The persons executing this Agreement on behalf of the Health Center Developer have all necessary authority to execute this Agreement on behalf of Health Center Developer, and this Agreement is a binding obligation of Health Center Developer. Copies of the Articles of Incorporation and Bylaws of the Health Center Developer 'will be delivered to CDC -HA and Affordable Housing Developer five (5) business days prior to final approval of the Agreement and within five (5) business days of each Closing of which Health Center Developer is a party. These copies will be true, complete and fully -executed copies of the originals, as amended to the date of this Agreement. The Health Center Developer has and will have full right, power and lawful authority to enter into the Public Right of Way Purchase Agreement, the Health Center Purchase Agreement and undertake all obligations as provided in this Agreement. (b) No Conflict. Health Center 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 Health Center Developer is a party or by which it is bound. (e) No Bankruptcy. Health Center Developer is not the subject of a bankruptcy proceeding. Page 21 of 49 Attachment No. 3 Kimball Highland DDA 208. Studies and Reports. Prior to the Closing, representatives of Affordable Housing Developer shall have the right of access to all portions of the Property for the purpose of obtaining data and making surveys and tests necessary to carry out this Agreement. Any preliminary work undertaken on the Property by Affordable Housing Developer prior to the Closing shall be done at the sole risk and expense of Affordable Housing Developer. Any preliminary work shall be undertaken only after securing all necessary permits from the appropriate governmental agencies. 209, Condition of the Property. 209.1 "As -Is," "Where -Is". The CDC -HA has not investigated and makes no representations or warranties whatsoever regarding the condition of any of Site 1, Site 2 or Site 3. Affordable Housing Developer hereby agrees to take Leasehold title to the Site 2 and Health Center Developer agrees to take fee title to Public Right of Way "as -is." Leasehold title to Site 2 and fee title to the Public Right of Way shall be conveyed to the Affordable Housing Developer and Health Center Developer, respectively, in an "as -is" physical and environmental condition, with no warranty, express or implied, by the CDC -HA as to the condition of any existing improvements, the soil, its geology, the presence of known or unknown faults or Hazardous Materials or toxic substances, and it shall be the sole responsibility of the Affordable Housing Developer or Health Center Developer, as applicable, at each of their own expense to investigate and determine the physical and environmental conditions of Site 2 and the Public Right of Way, as applicable. Each of the Affordable Housing Developer and Health Center Developer shall have the right to engage its own environmental consultant (the "Environmental Consultant") and other consultants to make such investigations of the Property as the- Affordable Housing Developer or Health Center Developer, as applicable, deems necessary, including any soils, geotechnical and other testing of the Property, and the CDC -HA shall promptly be provided a copy of all reports and test results provided to the Affordable Housing Developer or the Health Center Developer by the Environmental Consultant (collectively, the "Environmental Reports"). Each of Affordable Housing Developer and Health Center Developer shall reasonably approve or disapprove of the physical and environmental condition of Site 2 or the Public Right of Way, as applicable, no later than forty-five (45) days from the date from the date this Agreement is executed by the CDC -HA, provided that each of the Affordable Housing Developer and Health Center Developer shall have the right to terminate this Agreement during such forty-five (45) days period based upon the environmental condition of Site 2 or the Public Right of Way. The Affordable Housing Developer's or Health Center Developer's failure, as applicable, to deliver written notice of its termination within such time limit shall be deemed approval of the physical and environmental condition of the Site 2 or the Public Right of Way, as applicable, and as a waiver of Affordable Housing Developer's or Health Center Developer's right to object to the physical and environmental condition of the Site 2 or Public Right of Way, as applicable. If the Affordable Housing Developer or Health Center Developer approves or is deemedto approve the physical and environmental condition of the Site 2 or the Public Right of Way, as applicable, then, as among Affordable Housing Developer, Health Center Developer, City and CDC -HA, it shall be the sole responsibility and obligation of the Affordable Housing Developer or Health Center Developer, as applicable, to take such action as may be necessary to place the physical and environmental conditions of the Site 2 or Public Right of Way, in a condition entirely suitable for the purposes set forth in this Agreement. Page 22 of 49 Attachment No. 3 Kimball Highland DDA 209.2 Affordable Housing Developer Precautions After Closing. From and after the Closing for the Phase 1 Project and the Closing for the Phase 2 Project, respectively, Affordable Housing Developer shall take all necessary precautions to prevent the release in, on or under the Phase 1 Project and the Phase 2 Project of any Hazardous Materials. Such precautions shall include compliance with all Governmental Requirements with respect to Hazardous Materials. In addition, Affordable Housing Developer shall install and utilize such equipment and implement and adhere to such procedures as are consistent with commercially reasonable standards as respects the disclosure, storage, use, removal and disposal of Hazardous Materials. 209.3 Health Center. Developer Precautions After Closing. From and after the Closing for the Phase 3 Project, Health Center Developer shall take all necessary precautions to prevent the release in, on or under the Phase 3 Project of any Hazardous Materials. Such precautions shall include compliance with all Governmental Requirements with respect to Hazardous Materials. In addition, Affordable Housing Developer shall install and utilize such equipment and implement and adhere to such procedures as are consistent with commercially reasonable standards as respects the disclosure, storage, use, removal and disposal of Hazardous Materials. 209.4 Required Disclosures After Closing of Phase 1 Project or Phase 2 Project. From and after the Closing for the Phase 1 Project and the Closing for the Phase 2 Project, respectively, Affordable Housing Developer shall notify CDC -HA, and provide the CDC -HA with a copy or copies, of all environmental permits, disclosures, applications, entitlements or inquiries relating to the Phase 1 Project and the Phase 2 Project, including notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, cease and desist orders, reports filed pursuant to self -reporting requirements and reports filed or applications made pursuant to any Governmental Requirements relating to Hazardous Materials and underground tanks. Affordable Housing Developer shall report to the CDC -HA, as soon as possible after each incident, any unusual or potentially important incidents with respect to the environmental condition of the Phase 1 Project or the Phase 2 Project. In the event of a release of any Hazardous Materials into the environment, Affordable Housing Developer shall, as soon as possible after the release, deliver to the CDC -HA a copy of any and all reports relating thereto and copies of all correspondence with governmental agencies relating to the release. Upon request, Affordable Housing Developer shall deliver to the CDC -HA a copy or copies of any and all other environmental entitlements or inquiries relating to or affecting the Phase 1 Project or the Phase 2 Project including, but not limited to, all permit applications, permits and reports including, without limitation, those reports and other matters which may be characterized as confidential. 209.5 Required Disclosures After Closing of Phase 3 Project. From and after the Closing for the Phase 3 Project, Health Center Developer shall notify CDC -HA, and provide the CDC -HA with a copy or copies, of all environmental permits, disclosures, applications, entitlements or inquiries relating to the Phase 3 Project, including notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, cease and desist orders, reports filed pursuant to self -reporting requirements and reports filed or applications made pursuant to any Governmental Requirements relating to Hazardous Materials and underground tanks. Health Center Developer shall report to the CDC -HA, as soon as possible after each incident, any unusual Page 23 of 49 Attachment No. 3 Kimball Highland DDA or potentially important incidents with respect to the environmental condition of the Phase 3 Project. In the event of a release of any Hazardous Materials into the environment, Health Center Developer shall, as soon as possible after the release, deliver to the CDC -HA a copy of any and all reports relating thereto and copies of all correspondence with governmental agencies relating to the release. Upon request, Health Center Developer shall deliver to the CDC -HA a copy or copies of any and all other environmental entitlements or inquiries relating to or affecting the Phase 3 Project including, but not limited to, all permit applications, permits and reports including, without limitation, those reports and other matters which may be characterized as confidential. 210. Affordable Housing Developer Indemnity. From and after the Closing for the Phase 1 Project and the Closing for the Phase 2 Project, respectively, the owner of the Phase 1 Project and the owner of the Phase 2 Project, respectively, agrees to indemnify, defend and hold CDC -HA harmless from and against any claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense (including, without limitation, attorneys' fees), resulting from, arising out of, or based upon any of the following: (i) the presence, release, use, generation, 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 Phase 1 Project or the Phase 2 Project, or (ii) the violation, or alleged violation, of any statute, ordinance, order, rule, regulation, permit, judgment or license relating to the use, generation, release, discharge, storage, disposal or transportation of Hazardous Materials on, under, in or about, to or from, the Phase 1 Project or the Phase 2 Project. This indemnity shall include, without limitation, any damage, liability, fine, penalty, parallel indemnity after closing cost or expense arising from or out of any claim, action, suit or proceeding for personal injury (including sickness, disease or death), tangible or intangible property damage, compensation for lost wages, business income, profits or other economic loss, damage to the natural resource or the environment, nuisance, contamination, leak, spill, release or other adverse effect on the environment. Provided, however, that this indemnity shall be limited to claims, actions, suits, proceedings, losses, costs, damages, liabilities, deficiencies, fines, penalties, punitive damages, or expenses due to conditions first occurring from and after the Closing for the Phase 1 Project and the Closing for the Phase 2 Project, respectively. This indemnity does not include any condition arising solely as a result of the negligence or willful misconduct of the CDC -HA or its employees, agents, representatives, successors or assigns. This Section 210 shall apply with respect to the owner of the Phase 1 Project only with respect to the Phase 1 Project and shall apply with respect to the owner of the Phase 2 Project only with respect to the Phase 2 Project, i.e., the owner of the Phase 1 Project shall not have any obligations or liability with respect to the Phase 2 Project and the owner of the Phase 2 Project shall not have any obligations or liability with respect to the Phase 1 Project. 211. Health Center Developer Indemnity. From and after the Closing for the Phase 3 Project, Health Center Developer agrees to indemnify, defend and hold CDC -HA harmless from and against any claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense (including, without limitation, attorneys' fees), resulting from, arising out of, or based upon any of the following: (i) the presence, release, use, generation, 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 Phase 3 Project, or (ii) the violation, or alleged violation, of any statute, ordinance, order, rule, regulation, permit, judgment or license relating to the use, generation, release, discharge, storage, disposal or transportation of Hazardous Page 24 of 49 Attachment No. 3 Kimball Highland DDA Materials on, under, in or about, to or from, the Phase 3 Project. This indemnity shall include, without limitation, any damage, liability, fine, penalty, parallel indemnity after closing cost or expense arising from or out of any claim, action, suit or proceeding for personal injury (including sickness, disease or death), tangible or intangible property damage, compensation for lost wages, business income, profits or other economic loss, damage to the natural resource or the environment, nuisance, contamination, leak, spill, release or other adverse effect on the environment. Provided, however, that this indemnity shall be limited to claims, actions, suits, proceedings, losses, costs, damages, liabilities, deficiencies, fines, penalties, punitive damages, or expenses due to conditions first occurring from and after the Closing for the Phase 3 Project. 300. Scope of Construction. 301. CDC -HA Review and Approval of the Project Design and Plan. Affordable Housing Developer shall prepare and submit a Project Design and Plan for each of the Phase 1 Project and the Phase 2 Project to the CDC -HA for review and approval. The CDC -HA shall have the right to review and approve or disapprove all aspects of the Project Design and Plan for each of the Phase 1 Project and the Phase 2 Project. Affordable Housing Developer acknowledges and agrees that the CDC -HA is entitled to approve or disapprove the Project's Design and Plan for each of the Phase 1 Project and the Phase 2 Project in order to satisfy the CDC-HA's obligation to promote a high level of design which will impact the surrounding development, and to provide an environment for the social, economic and psychological growth and well-being of the citizens of the City, including but not limited to the residents of the Phase 1 Project and the Phase 2 Project. Notwithstanding the foregoing, CDC -HA understands and agrees that the final unit count in each of Phase 1 Project and Phase 2 Project shall be subject to change based on Affordable Housing Developer's based on the requirements of the available financing sources and financial feasibility. 302. Standards for Disapproval. The CDC -HA shall have the right to disapprove in its reasonable discretion any of the Project Design and Plan for each of the Phase 1 Project and the Phase 2 Project, as set forth in Section 300, above, including without limitation if the same do not conform to this Agreement or are otherwise incomplete. In the event the Project Design and Plan for either the Phase 1 Project and the Phase 2 Project is not approved, the CDC -HA shall state in writing provided to the Affordable Housing Developer the reasons for disapproval. Affordable Housing Developer, upon receipt of notice of disapproval from the CDC -HA, shall meet and confer regarding such portions and resubmit the revised Project Design and Plan to the CDC -HA for approval. The CDC -HA and Affordable Housing Developer agree to work together in good faith to resolve any disagreements and disputes regarding the Project Design and Plan. Neither Affordable Housing Developer, shall be entitled to any monetary damages or compensation as a result of the CDC-HA's disapproval or failure to approve or disapprove any Project Design and Plan. 303. Revisions. If Affordable Developer desires to propose any revisions to the. CDC - HA -approved Project Design and Plan after approval, the Affordable Housing Developer shall submit such proposed changes to the CDC -HA. If the Project Design and Plan, as modified by the proposed changes, generally and substantially conforms to the requirements of the Project Design and Plan and this Agreement, the CDC -HA shall review the proposed changes and notify Affordable Housing Developer in writing within thirty (30) days after submission to the CDC -HA Page 25 of 49 Attachment No. 3 Kimball Highland DDA whether the proposed change is approved or disapproved. The CDC-HA's Executive Director is authorized to approve changes to the Project Design and Plan. Provided, however, the CDC -HA shall have no obligation to approve any change from the basic use of the Property for anything other than a multifamily, affordable housing project. 304. Defects in Plans. The CDC -HA shall not be responsible or liable in any way, either to Affordable Housing Developer or to any third parties, for any defects in the Project Design and Plan, or for any structural or other defects in any work done according to the approved Project Design and Plan,. or for any delays caused by the review and approval processes established by this Section 300. Affordable Housing Developer shall hold harmless and indemnify CDC -HA, the City and their officers, employees, agents and representatives from and against any and all claims, demands and suits for damages to property or injuries to persons arising out of or in any way relating to the Property, including without limitation any defects in the Project Design and Plan, violation of any laws, and for defects in any work done according to the approved Project Design and Plan or for defects in work performed by Affordable Housing Developer or any contractor or subcontractor of Affordable Housing Developer. 305. Land Use Approvals. Before commencement of the work or any works of improvement at the Property as contemplated under the Project Design and Plan, Affordable Housing Developer shall, at Affordable Housing Developer's sole expense, secure or cause to be secured any and all land use and other entitlements, permits and approvals which may be required for the Project Design Work and Plan by the City or any other governmental agency affected by such construction or work. Neither CDC -HA, nor the City shall be responsible in any way for, the processing of Developer's building permits or other permit applications with the City and the execution of this Agreement does not constitute the granting of or a commitment to obtain any required land use permits, entitlements or approvals. 306. Deadline for Completion of Construction. The construction of the Phase 1 Project and the Phase 2 Project shall be completed substantially in accordance with the Project's Design and Plan not later than twenty-six (26) months from the Closing for the Phase 1 Project or the Closing for the Phase 2 Project, as applicable. Failure to complete all of work contemplated under the Project Design and Plan for the Phase 1 Project or the Project Design and Plan for the Phase 2 Project, as applicable, shall, inter alia, be a default by the then owner of the Phase 1 Project or the Phase 2 Project respectively, entitling the CDC -HA to exercise all of its rights and remedies, including without limitation foreclosure of the Phase 1 Project Deed of Trust or Phase 2 Project Deed of Trust, as applicable. 306. Cost of Project. All costs of the Phase 1 Project and Phase 2 Project whatsoever shall be borne by Affordable Housing Developer, including without limitation the cost of planning, the payment of any required prevailing wages, if any, designing, developing and constructing the Phase 1 Project and the Phase 2 Project in accordance with the applicable Project's Design and Plan. 306.1 Project Budget. The Affordable Housing Developer has submitted the Initial Project Budget to CDC -HA. The Project Budget summarizes the current estimates of the sources and uses of funds for the complete development of each of the Phase 1 Project and the Page 26 of 49 Attachment No. 3 Kimball Highland DDA Phase 2 Project. By its execution of this Agreement, CDC -HA has given its approval to the Initial Project Budget. While the Initial Project Budget has been prepared based on the best, good faith estimate of the Affordable Housing Developer of the costs which are likely to be incurred for the development of the Phase 1 Project and the Phase 2 Project, the parties recognize that events and circumstances not currently contemplated, some of which are outside of the control of the parties, could result in changes in the costs of developing one or both Projects, necessitating changes in the Project Budget. Changes in the Project Design and Plan could also be made during any public hearing or approval process which results in increased costs for the Project not contemplated in the Project Budget. Changes in costs could be occasioned by conditions found in the field which were not anticipated as of the date of execution of this Agreement, including changes (and delays which result from changes) as a result of onsite inspections. Due to the impact of other, competing demands for staff time, inspections themselves might be delayed. 306.2 Because of the specialized nature of the funding for the Project Design and Plan, unanticipated material changes could constitute a challenge to the Project completion and may cause additional costs to the Project unanticipated in the Initial Project Budget. Should the Affordable Housing Developer become aware of any such material fact or circumstance which will result in a material increase in the Project Design and Plan (a cost or costs will constitute a "material increase" if (i) alone or cumulatively, such costs result in increased expenses in excess of $100,000, but which expenses might be absorbed out of contingency funds; or (ii) alone or cumulatively, such costs result in an increase for a Phase in excess of $250;000 which cannot be paid from sources of funds identified in the Project Budget), the Affordable Housing Developer shall give written notice to CDC -HA, which notice shall identify the material change or changes, shall itemize the costs which the Affordable Housing Developer anticipates will result therefrom and shall request that CDC -HA take one or more of the following actions: i. Agree to the transfer of amounts between line items within each Project Budget. At the request of Affordable Housing Developer, and subject to the approval of CDC -HA, which will not be unreasonably withheld, conditioned or delayed, funds reflected in one line item of a Project Budget which are unexpended at the substantial completion of the work delineated therein may be transferred to the account and line item for contingencies, or, with the consent of CDC -HA, not to be unreasonably withheld, transferred directly to another account of another line item in the Project Budget. Page 27 of 49 Attachment No. 3 Kimball Highland DDA ii. Approve modifications to the Project Design and Plan reasonably necessary or required to deal with such changed circumstances and material increases. Such modifications might include phasing or deferral of Project amenities until additional funding is available or secured, downsizing or eliminating Project design items or amenities, etc. All financing for the Project Design and Plan shall be subject to the review and approval of the CDC -HA, which review and approval shall, not be unreasonably withheld, conditioned or delayed. The CDC -HA shall respond within fifteen (15) days of Affordable Housing Developer's submission of any proposed financing. Affordable Housing Developer will be responsible for maximizing use of leveraged financing sources from other community development funding sources as available. The CDC-HA's approvals of any such modifications shall not be unreasonably withheld, conditioned or delayed. iii. Agree to allow the Affordable Housing Developer to obtain additional funding sufficient to pay such material increases. Such funding sources might, upon approval by CDC -HA, include CDC -HA support for applications for additional and/or new funding from additional or new governmental or private funding programs established for low and moderate income housing. Once the CDC -HA and the Affordable Housing Developer have agreed upon a final sources and uses for the Project Design and Plan, then the parties shall replace the Initial Project Budget with a final approved project budget (the "Final Project Budget"), which shall include development sources and uses and an operating budget. 307. Insurance Requirements. Affordable Housing Developer and each Owner, except for Health Center Developer, shall take out and maintain during the terms of each of the Declarations and shall cause its contractor and subcontractors to take out and maintain until completion, a comprehensive general liability policy in the amount of not less than $4,000,000 and not less than $2,000,000 in a single occurrence; provided that the use of umbrella/excess liability policies to achieve such limits will be acceptable, and a comprehensiveautomobileliability policy in the amount of $1,000,000 combined single limit, or such other policy limits as the CDC -HA. may approve at its discretion, including contractual liability, as shall protect Affordable Housing Developer, City and CDC -HA from claims for such damages. Such policy or policies shall be written on an occurrence form. Affordable Housing Developer and each Owner shall also furnish or cause to be furnished to the CDC -HA evidence satisfactory to the CDC -HA that Affordable Housing Developer and each Owner, and any contractor with whom it has contracted for the performance of work on the Property or otherwise pursuant to this Agreement, carries workers' compensation insurance as required by law. Affordable Housing Developer and each Owner shall furnish a certificate of insurance countersigned by an authorized agent of the insurance carrier on a form approved by the CDC -HA setting forth the general provisions of the insurance coverage. This countersigned certificate shall name the City and CDC -HA and their respective officers, agents, and employees as additionally insured parties under the policy, and the certificate shall be accompanied by a duly executed endorsement evidencing such additional insured status. The certificate and endorsement by the insurance carrier shall contain a statement of obligation on the part of the carrier to notify the City and CDC -HA of any material change, cancellation or Page 28 of 49 Attachment No. 3 Kimball Highland DDA termination of the coverage at least thirty (30) days in advance of the effective date of any such material change, cancellation or termination. Coverage provided hereunder by Affordable Housing Developer or each Owner shall be primary insurance and not be contributing with any insurance maintained by the City of CDC -HA, and the policy shall contain such an endorsement. The insurance policy or the endorsement shall contain a waiver of subrogation for the benefit of the City and CDC -HA. The required certificates shall be furnished by Affordable Housing Developer and each Owner prior to the Closing for the Phase 1 Project and the Closing for the Phase 2 Project, as applicable. 308. Indemnities. (a) Affordable Housing. The Affordable Housing Developer and each Owner, except for Health Center Developer, shall be responsible for all injuries to persons and/or all damages to real or personal property of the City, CDC -HA or others, caused by or resulting from the negligence and/or breach of this Agreement, by each Owner, the Affordable Housing Developer and their employees, subcontractors and/or their agents during the term of this Agreement. The Affordable Housing Developer and each Owner, except for Health Center Developer, shall defend and hold harmless and indemnify the City, CDC -HA and all of their officers and employees from all costs, damages, judgments, expenses and claims to any third party resulting from the negligence and/or breach of this Agreement, by the Owner, Affordable Housing Developer and their directors, officers, partners, members, employees, subcontractors and/or their agents and assigns or any employee, director, officer, partners or member of Affordable Housing Developer or either Owner, arising out of the development of Site 1, and Site 2 and/or the breach of this Agreement, except those arising from the sole negligence or willful misconduct of the City or CDC -HA. Provided, the Phase 1 Project and the Phase 2 Project are constructed, owned and financed as separate developments, then this Section 308 shall apply with respect to the Phase 1 Owner only with respect to the Phase 1 Project and shall apply with respect to the Phase 2 Owner only with respect to the Phase 2 Project, i.e., the Phase 1 Owner shall not have any obligations or liability with respect to the Phase 2 Project and the Phase 2 Owner shall not have any obligations or liability with respect to Phase 1 Project. (b) Phase 3. The Health Center Developer shall be responsible for all injuries to persons and/or all damages to real or personal property of the City, CDC -HA or others, caused by or resulting from the negligence and/or breach of this Agreement, by the Health Center Developer and its employees, subcontractors and/or agents during the term of this Agreement. The Health Center Developer shall defend and hold harmless and indemnify the City, CDC -HA and all of their officers and employees from all costs, damages, judgments, expenses and claims to any third party resulting from the negligence and/or breach of this Agreement, by the Health Center Developer and its directors, officers, partners, members, employees, subcontractors and/or their agents and assigns or any employee, director, officer, partners or member of Health Center Developer, arising out of the development of Site 3 and/or the breach of this Agreement, except those arising from the sole negligence or willful misconduct of the City or CDC -HA. Page 29 of 49 Attachment No. 3 Kimball Highland DDA 309. Rights of Access. The Affordable Housing Developer and each Owner, except for Health Center Developer, agrees to allow the CDC -HA and its representatives to access the Property to review and inspect its activities under this Agreement as the CDC -HA shall require upon reasonable advance notice of no less than 48 hours. The CDC -HA shall monitor the Affordable Housing Developer's and each Owner's, except for Health Center Developer, activities without liability for said inspection and review. 310. Compliance With Laws. (a) Prevailing Wage and Other Labor Standards. The Affordable Housing Developer, Site 1 Owner, and Site 2 Owner each represents and warrants that during the term of this Agreement that it will pay not less than the minimum compensation set forth in the Federal Davis Bacon wage requirements, and shall comply with all State prevailing wage requirements to the extent State prevailing wage requirements are applicable to the work. The Affordable Housing Developer and each Owner shall carry out the design and completion of the Scope of Development in conformity with all applicable laws, including all applicable state labor standards, the City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the Title 24 of the California Code of Regulations, 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. The Affordable Housing Developer and each- Owner hereby agrees to carry out development, construction and operation of the Property, including, without limitation, any and all public works (as defined by applicable law), in conformity with all applicable local, state and federal laws, including, without limitation, all applicable federal and state labor laws, including, without limitation, any requirement to pay State prevailing wages. The Affordable Housing Developer, Site 1 Owner, and Site 2 Owner shall pay not less than the minimum compensation set forth in the Federal Davis Bacon wages, regardless of whether the same would be legally required, but for this sentence. The Affordable Housing Developer and each Owner hereby expressly acknowledges and agrees that neither the City nor the CDC -HA has ever previously affirmatively represented to such Owner, Affordable Housing Developer or any of their contractor(s) in writing or otherwise, in a call for bids or otherwise, that the work to be covered by the bid or contract is or is not a "public work," as defined in Section 1720 of the Labor Code. The Affordable Housing Developer and each Owner hereby agrees that such party shall have the obligation to provide any and all disclosures, representations, statements, rebidding, and/or identifications which may be required by Labor Code Sections 1726 and 1781, as the same maybe enacted, adopted or amended from time to time, or any other provision of law. The Affordable Housing Developer and each Owner hereby agrees that such Owner shall have the obligation to provide and maintain any and all bonds to secure the payment of contractors (including the payment of wages to workers performing any public work) which may be required by the Civil Code, Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. The Affordable Housing Developer and each Owner hereby agrees that such party shall have the obligation, at such party's sole cost, risk and expense, to obligate any party as may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. The Affordable Housing Developer and each Owner shall Page 30 of 49 Attachment No. 3 Kimball Highland DDA indemnify, protect, defend and hold harmless the City, the CDC -HA and their respective officers, employees, contractors and agents, with counsel reasonably acceptable to the City and the CDC - HA, from and against any and all loss, liability, damage, claim, cost, expense, and/or "increased costs" (including labor costs, penalties, reasonable attorneys' fees, court and litigation costs, and fees of expert witnesses) which, ih connection with the completion of the Scope of Development, including, without limitation, any and all public works (as defined by applicable law), results or arises in any way from any of the following: (i) the noncompliance by the Affordable Housing Developer or such Owner of any applicable local, state and/or federal law, including, without limitation, any applicable federal and/or state labor laws (including, without limitation, if applicable, the requirement to pay state prevailing wages); (ii) the implementation of Sections 1726 and 1781 of the Labor Code, as the same maybe enacted, adopted or amended from 'time to time, or any other similar law; (iii) failure by the Affordable Housing Developer or such Owner to provide any required disclosure, representation, statement, rebidding and/or identification which may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law; (iv) failure by the Affordable Housing Developer or such Owner to provide and maintain any and all bonds to secure the payment of contractors (including the payment of wages to workers performing any public work) which may be required by the Civil Code, Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law; and/or (v) failure by the Affordable Housing Developer or such Owner to obligate any party as may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. It is agreed by the parties that, in connection with the development, construction and operation of the Property, including, without limitation, any public work (as defined by applicable law), the Affordable Housing Developer and each Owner shall bear all risks of payment or non-payment of state prevailing wages and/or the implementation of Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, and/or any other provision of law. "Increased costs" as used in this Section shall have the meaning ascribed to it in Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time. The foregoing indemnity shall survive termination of this Agreement. Provided, the Phase 1 Project and the Phase 2 Project are constructed, owned and financed as separate developments, then this Section 309 shall apply with respect to the Owner of Phase 1 Project only with respect to the Phase 1 Project and shall apply with respect to the Owner Phase 2 Project only with respect to the Phase 2 Project. Notwithstanding anything to the contrary herein, in no event shall this Section 310(a) be construed to require Health Care Developer and Phase 3 Project to pay comply with Federal David Bacon wage requirements or State prevailing wage requirements, provided such prevailing wage requirements do not otherwise apply to the Phase 3 Project. (b) Workforce Enhancement Initiative. The purpose of this Section 310(b) relating to Workforce Enhancement Initiatives is to set forth guidance so that all construction work relating to Phase 1 Project and Phase 2 Project pursuant to this Agreement may proceed continuously and without interruption, thereby assuring the timely and cost-effective completion of the Phase 1 Project and Phase 2 Project, and to support the efforts of CDC -HA to strive to implement a form of construction career training through mentorship and opportunities for targeted workers and local apprenticeship and pre -apprentice programs to the extent there is workforce interest and is financially feasible for the Affordable Housing Developer with respect to the Phase 1 Project and Page 31 of 49 Attachment No. 3 Kimball Highland DDA Phase 2 Project intended under this Agreement. For avoidance of doubt, this Section shall not apply to the Health Center Developer and the Phase 3 Project. (i) Management Rights. The Affordable Housing Developer and its General Contractor retain the full and exclusive authority for the management of its operations, as set forth in this Section, unless expressly limited or required by a specific Section of this Section. The Contractor shall direct the workforce at its sole prerogative, including but not limited to the hiring, promotion, transfer, layoff, discipline or discharge for just cause of its employees; the selection of foremen and general foremen; the assignment and schedule of work; the promulgation of reasonable work rules; and, the requirement of overtime work, the determination of when it will be worked, and the number and identity of employees engaged in such work. No rules, customs, or practices which limit or restrict productivity, efficiency or the individual and/or joint working efforts of employees shall be permitted or observed. (ii) Wages. Affordable Housing Developer acknowledges and agrees Phase 1 Project and Phase 2 Project shall pay Davis -Bacon Wages in accordance with Section 309(a) of this Agreement. (iii) Apprentices. The parties recognize the need to maintain continuing support of the programs designed to develop adequate numbers of competent workers in the construction industry, the obligation to capitalize on the availability of the local work force, and the opportunities to provide continuing work under the construction program. To these ends, the parties will use good faith efforts to facilitate, encourage, and assist an established apprenticeship program to commence and progress in labor/management apprenticeship and/or training programs during the course of construction on the Phase 1 Project and Phase 2 Project. (iv) Local Hires. The Affordable Housing Developer will use good faith efforts in causing its General Contractor to ensure that individuals and firms located in or owned in substantial part by persons residing in the area of the City of National City are used whenever possible, so long as the individual or firm is qualified to perform such work, and competitive in price. Such efforts (to the extent feasible and permitted by law) shall include, but shall not be limited to: (i) including such firms, when qualified, on solicitation mailing lists; (ii) encouraging 'their participation through direct solicitation of proposals whenever they are a potential source; (iii) dividing total subcontract requirements, when economically feasible, into smaller tasks or quantities to permit maximum participation by such firms; and (iv) establishing delivery schedules, where the requirement permits, which encourages participation by such firms. (v) Limits. This Section shall apply and be limited to the construction work relating to the Phase 1 Project and Phase 2 Project to be performed by the General Contractor selected and engaged by the Affordable Housing Developer. A copy of this Section shall be provided to the General Contractor to set forth guidance in hiring and other related labor practices. following: (vi) Items specifically excluded from the scope of this Section include the Page 32 of 49 Attachment No. 3 Kimball Highland DDA a. This Section 309(b) does not apply to the work of non -manual employees, including, but not limited to, superintendents, supervisors, staff engineers,. timekeepers, mail carriers, clerks, office workers, messengers, guards, safety personnel, emergency medical and first aid technicians, and other professional, engineering, consultants, administrative, supervisory, executive and management employees; b. The Section 309(b) shall not apply to state inspectors or other public employees, post -construction tenant improvements, emergency work, non -construction support services, creation and installation of art work, future maintenance, and architectural, engineering, surveying or inspection services; c. This Section 309(b) shall serve as guidance for work intended to be covered on or after the Effective Date of this Agreement, and is not intended to, and shall not govern, the construction of any project other than the Phase 1 Project and Phase 2 Project under this Agreement; such work; d. Off -site maintenance of leased equipment and on -site supervision of e. Off -site laboratory work for testing; f. Work performed by employees of an Original Equipment Manufacturer ("OEM") or vendor on the OEM's or vendor's equipment,. if required by the warranty agreement between the OEM or vendor and the Primary Employer or Owner in order to maintain the warranty or guarantee on such equipment, and provided that the warranty agreement is the OEM's or vendor's standard warranty agreement for such equipment and is consistent with industry practice; g. All work related to the delivery, unloading, moving and installation of the Affordable Housing Developer's individual, unattached pieces of furniture, furnishings, equipment or supplies; h. All hauling from and delivery to the Phase 1 Project and .Phase 2 Project and deliveries of all materials required to complete the Phase 1 Project and Phase 2 Project, except that the hauling/delivery of soil, sand, gravel, aggregate, rocks, concrete, asphalt, excavation materials, fill material and construction debris; i. The delivery, placement, servicing and removal of all temporary toilets, site fencing, storage units, temporary offices and trash/recycling dumpsters, or any other equipment or materials needed for the operation of the construction oversight. 311. Nondiscrimination in Employment. Affordable Housing Developer and each Owner certifies and agrees that all persons employed or applying for employment by it, its affiliates, subsidiaries, or holding companies, and all subcontractors, bidders and vendors, are and will be treated equally by it without regard to, or because of race, color, religion, ancestry, national origin, sex, age, pregnancy, childbirth or related medical condition, medical condition (cancer related) or physical or mental disability, and in compliance with Title VII of the Civil Rights Act Page 33 of 49 Attachment No. 3 Kimball Highland DDA of 1964, 42 U.S.C. Section 2000, et seq., the Federal Equal Pay Act of 1963, 29 U.S.C. Section 206(d), the Age Discrimination in Employment Act of 1967, 29 U.S.C. Section 621, et seq., the Immigration Reform and Control Act of 1986, 8 U.S.C. Section 1324b, et seq., 42 U.S.C. Section 1981, the California Fair Employment and Housing Act, Cal. Government Code Section 12900, et seq., the California Equal Pay Law, Cal. Labor Code Section 1197.5, Cal. Government Code Section 11135, the Americans with Disabilities Act, 42 U.S.C. Section 12101, et seq., and all other anti -discrimination laws and regulations of the United States and the State of California as they now exist or may hereafter be amended. Affordable Housing Developer and each Owner shall allow representatives of the CDC -HA access to its employment records related to this Agreement during regular business hours to verify compliance with these provisions when so requested by the CDC -HA. 312. Taxes and Assessments. After each Closing, the respective Owner shall pay prior to delinquency all ad valorem real estate taxes and assessments on Site 1, Site 2, and Site 3, respectively. Each' Owner shall remove or have removed any levy or attachment made after the Closing on. the Phase 1 Project, Phase 2 Project or the Phase 3 Project, respectively, or any part thereof, or assure the satisfaction thereof within a reasonable time. 313. Liens and Stop Notices. Each Owner shall not allow to be placed on Site 1 or Site 2, as applicable, any part thereof any lien or stop notice. If a claim of a lien or stop notice is given or recorded affecting Site 1 or Site 2, as applicable, the Owner of such property shall, within thirty (30) days of such recording or service or within five (5) days of the CDC-HA's demand, whichever last occurs: (a) pay and discharge the same; (b) effect the release thereof by recording and delivering to the CDC -HA a surety bond in sufficient form and amount as approved by the CDC -HA in its sole discretion; or (c) provide the CDC -HA with other assurance which the CDC -HA deems, in its sole discretion, to be satisfactory for the payment of such lien or bonded stop notice and for the full and continuous protection of the CDC -HA from the effect of such lien or bonded stop notice. 314, Financing of the Project. 314.1 No Encumbrances Except Mortgages or Deeds of Trust. Except for Site 3, Mortgages and deeds of trust may be permitted only with the CDC-HA's prior written approval, and only for the purpose of securing loans of funds to be used for financing the Project Design and Plan work, and any other purposes deemed necessary and appropriate by the CDC -HA in connection with development under this Agreement. The Affordable Housing Developer and each Owner, except for Health Center Developer, shall notify the CDC -HA in advance of the execution or recordation of any mortgage or deed of .trust. The Affordable. Housing Developer and each Owner, except for Health Center Developer, shall not enter into any mortgage or deed of trust for financing without the prior written approval of the CDC -HA, which approval the CDC -HA agrees Page 34 of 49 Attachment No. 3 Kimball Highland DDA to. give if any such mortgage or deed of trust for financing is given to a responsible financing lending institution or person or entity, as determined by the CDC -HA in its reasonable discretion. 314.2 Right of CDC -HA to Cure Mortgage or Deed of Trust Default. In the event of a mortgage or deed of trust default or breach by the. Affordable Housing Developer or an Owner other than Health Center Developer, the Affordable Housing Developer or such other Owner, as applicable, shall immediately deliver to the CDC -HA a copy of .any mortgage holder's notice of default. The CDC -HA shall have the right but not the obligation to cure the default. In such event, the CDC -HA shall be entitled to reimbursement from, the Affordable Housing Developer or the applicable Owner of all costs and expenses incurred by the CDC -HA in curing such default, including without limitation attorneys' fees. 315, Developer Fee. It is acknowledged and agreed that the Affordable Housing Developer may receive a.developer fee as approved by the Executive Director'of the CDC -HA up to the maximum allowed by the California Tax Credit Allocation Committee, and shall not be required to defer any such developer fee so long as there are sufficient financing sources to fund the construction of each of the Phase 1 Project or Phase 2 Project as contemplated by the Project • Design and Plan. -316. Occupancy Monitoring and Inspection Fees; Records and, Reports. Each year during the terms of each of the Declarations, the applicable Owner of Site 1 and Site 2 shall pay to the CDC -HA a flat annual fee of $30,000. Each such Owner, except for Health Center Developer, shall supply CDC -HA, annually, on May 31 st, of each yea. r during the term of this Agreement, for the immediately prior calendar year, with such records and reports as are, required and are requested by the CDC -HA to aid it in complying with its reporting and record keeping requirements. The records and reports include, but are not limited to the following: (a) Amount of funds expended pursuant to this Agreement; (b) Eligible tenant information, including yearly income verifications; (c) On -site inspection results; . (d) Housing. payments charged to tenants; (e) Affirmative marketing, records; (f) Insurance policies and notices; (g) Equal Employment Opportunity and Fair Housing records; (h) , Labor costs and records; (i) Audited income and expense statement, balance sheet and statement of cash flows for the Developer; Page 35 of 49 Attachment No. 3 Kimball Highland DDA (j) Federal and State income tax returns for the calendar year, ending on the preceding December 31 st; (k) Annual budget of reserves for repair and replacement; (1) Annual certification and representation regarding status of all loans, encumbrances and taxes; (m) Such other. and further information and records as- the CDC -HA shall reasonably request in writing from the Developer. 317. Flood Insurance. The Affordable Housing Developer and each Owner represents, warrants, and certifies, pursuant to 24 CFR §92.358,. that none of the Property is located within a Flood Plain or Flood Hazard Zone or Area, as indicated on a FEMA Map; or that the Property is located within a community participating in the National Flood Insurance Program and the Affordable Housing Developer or each Owner, as applicable, agrees to purchase and maintain flood insurance for the duration of the term of this Agreement. 318. Accessibility Standards. The Affordable Housing Developer and each Owner each represents and warrants that it will comply with all federal, state and local requirements and regulations concerning access to the units by the disabled and handicapped persons. 319. Study of Potential Sites for Future Market Rate Housing. Affordable Housing Developer agrees to study the feasibility of a future market -rate housing development (the "Market Rate Feasibility Analysis") at one of the following sites: (i) 1136 D Avenue, or (ii) 1415 D Avenue, or (iii) 1317 D Avenue. Affordable Housing Developer will complete the study and submit a report detailing the feasibility analysis within one year of execution of this Agreement. The parties to this Agreement acknowledge and agree that the outcome of the Market Rate Feasibility Analysis shall in no event affect CDC-HA's funding commitment with respect to Phase 1 Project or Phase 2 Project under this Agreement. The Affordable Housing Developer is not required to provide a market -rate housing development as a condition for CDC-HA's (a) commitment or funding of the Phase 1 Project or Phase 2 Project, (b) Ground Lease of Site 2, or (c) sale of the Kimball Public Right of Way. 400. Covenants and Restrictions. 401. Affordable Units. Developer covenants and agrees for itself, its successors, assigns, and every successor in interest to Site 1 and Site 2, or any part thereof, that upon the Closing and thereafter, Developer shall comply with the applicable Declaration for the period of time specified herein. The obligation of the CDC -HA to close on Escrow is conditioned upon the execution, and recordation of the Declaration against Site 1 and Site 2. The Declarations shall, in the aggregate, contain housing payment and income level restrictions for not less than 15 Extremely Low Income Households, 15 Very Low Income Households, 88 Low Income Households and 25 80% AMI households. In addition, the Declarations shall, in the aggregate, require not less than 12 studio Affordable Units, 30 one -bedroom Affordable Units, 64 two -bedroom Affordable Units, and 39 Page 36 of 49 Attachment No. 3 Kimball Highland DDA three -bedroom Affordable Units. The requirements set forth herein may be changed only with the written consent of the Executive Director of the CDC -HA. 402. Maintenance Covenants. Each Owner represents and warrants with respect to itself and its own Project that after completion of Scope of Development, Phase 1 Project, Phase 2 Project, Phase 3 Project and all of the Affordable Units, as applicable, shall continually be maintained in a decent, safe and sanitary condition, and in good repair as described in 24 C.F.R. §5.703, and in a manner which satisfies the Uniform Physical Conditions Standards promulgated by the Department of Housing and Urban Development (24 C.F.R. §5.705), as such standards are interpreted and enforced by the CDC -HA under its normal policies and procedures. The Affordable Housing Developer and each Owner warrants that all construction work shall meet or exceed the applicable local codes and construction standards, including zoning and building codes of the City of National City as well as the provisions of the Model Energy Code published by the Council of American Building Officials. The Affordable Housing Developer and each Owner hereby consents to periodic inspection by the CDC -HA' s designated inspectors and/or designees during regular business hours and upon reasonable advance notice of no less than 48 hours, including the Code Enforcement Agents of the City, to assure compliance with all applicable zoning, building codes, regulations and property standards. 403. Obligation to Refrain from Discrimination. 403.1 State and Federal Requirements. The Affordable Housing Developer and each Owner Developer shall, at all times during the term of this Agreement, comply with all of the affirmative marketing procedures adopted by the CDC -HA. The Affordable Housing Developer and each Owner Developer shall maintain records to verify compliance with the applicable affirmative marketing procedures and compliance. Such records are subject to inspection by the CDC -HA during regular business hours upon five (5) days written notice. 403.2 Additional Requirements. The Affordable Housing Developer and each Owner hereby agrees to comply with the Title VII of the Civil Rights Act of 1964, as amended, the California Fair Employment Practices Act, and any other applicable Federal and State laws and regulations. 403.3. Fair Housing-. Laws. All activities carried out by the Affordable Housing Developer, any Owner and/or their agents shall be in accordance with the requirements of the Federal Fair Housing Act. The Fair Housing Amendments Act of 1988 became effective on March 12, 1989. The Fair Housing Amendments Act of 1988 and Title VIII of the Civil Rights Act of 1968, taken together, constitute the Fair Housing 'Act. The Fair Housing Act provides protection against the following discriminatory housing practices if they are based on race, sex, religion, color, handicap, familial status, or national origin: denying or refusing to rent housing, denying or refusing to sell housing, treatingdifferently applicants for housing, treating residents differently in connection with terms and conditions, advertising a discriminatory housing preference or limitation, providing .false information about the availability of housing, harassing, coercing or intimidating peoplefrom enjoying or exercising their rights under the Fair Housing Act, blockbusting for profit, persuading owner to sell or rent housing by telling them that people of a particular race, religion, etc. are moving into the neighborhood, imposing different terms for loans s � Page 37 of 49 Attachment No. 3 Kimball Highland DDA for purchasing, constructing, improving, repairing, or maintaining 'a home, .or loans secured by housing; denying use or participation in real estate services, e.g., brokers' organizations, multiple listing services, etc. The Fair Housing Act gives HUD the authority to hold administrative hearings unless one of the parties elects to have the case heard in U.S. District Court and to issue subpoenas. Both civil and criminal penalties are provided. The Fair Housing Act also provides protection for people with disabilities and proscribes those conditions under which senior citizen housing is exempt from the prohibitions based on familial status. The following State of California Laws also govern housing discrimination and shall be complied with by Developer: Fair Employment and Housing Act, Unruh Civil Rights Act of 1959, Ralph Civil Rights Act of 1976, and Civil Code Section 54.1. 405. Nondiscrimination Covenants. The Affordable Housing Developer and each Owner covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of, any person or group of persons on the basis of race, color, creed, religion, sex, sexual orientation, marital status, national origin, ancestry, familial status, source of income or disability of any person in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall any of them or any person claiming under or through it establish or permit any such practice or practices of discrimination 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, with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property. The foregoing covenants shall run with the land. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) Deeds. In deeds: "The grantee herein covenants by and for itself, its successors. and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, sexual orientation, disability, medical condition, familial status, source of income, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed., The foregoing covenants shall run with the land." (b) Leases. In leases: "The lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, religion, sex, sexual orientation, disability, medical condition, familial status, source of income, marital status; national origin or ancestry in the leasing, subleasing, renting, transferring, use, occupancy, tenure or enjoyment of the land herein leased, nor shall lessee itself, or any person claiming under or through it, establish or permit such practice or practices of discrimination or segregation with reference to the selection, Page 38 of 49 Attachment No. 3 Kimball Highland DDA location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the land herein leased." (c) Contracts. In contracts for the rental, lease or sale of the Phase 1 Project, Phase 2 Project or the Phase 3 Project: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, sexual orientation, disability, medical condition, familial status, source of income, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land." 406, Effect of Violation of the Terms and Provisions of this Agreement. The CDC -HA is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land, for and in its own right and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit this Agreement and the covenants running with the land have been provided, without regard to whether the CDC -HA has been, remains or is an owner of any land or interest therein in the Property. The CDC -HA shall have the right, if this Agreement or its covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and covenants may be entitled. 500. Defaults and Remedies. Provided, the Phase 1 Project and the Phase 2 Project are constructed, owned and financed as separate developments, then this Section 500, including without limitation the subsections set forth below, shall apply to the Owner of Phase 1 Project only with respect to the Phase 1 Project and shall apply to. the Owner of Phase 2 Project only with respect to the Phase 2 Project, i.e., the Owner of Phase 1 Project shall not have any obligations or liability with respect to the Phase 2 Project and the Owner of Phase 2 Project shall not have any obligations or liability with respect to Phase 1 Project. 501. Default Generally. Subject to Section 603.2 of this Agreement, failure by the CDC - HA, Affordable Housing Developer or any Owner to perform any action or covenant required by this Agreement within the time periods provided herein following notice and failure to cure as described hereafter, constitutes a "Default'? under this Agreement..A party claiming a Default shall give written notice of Default to the other party specifying the alleged Default. Except as otherwise expressly provided in this Agreement, the claimant shall not institute any proceeding against any other party, and the other party shall not be in Default. if: (i) such alleged Default' is cured thirty (30) days from receipt of such written notice: or (ii) if the alleged: Default is such that it is not capable of being cured within thirty (30) days, but corrective action is initiated within thirty (30) days and the allegedly defaulting party diligently and in good faith works to effect a cure as soon as possible. 501.1 Notwithstanding anything to the contrary contained in this Agreement,after any Closing, then prior to any action to enforce this Agreement by the CDC -HA, with respect to . the phase which was the subject of such Closing, then provided the applicable Owner's limited i Page 39 of 49 Attachment No. 3 Kimball Highland DDA partner has delivered written notice of such limited partner's 'address for notice, the CDC -HA shall give such Owner's limited partner (the "Tax Credit Partner") notice and opportunity to cure for a period of not less than (a) fifteen (15) days if a monetary default, and (b) thirty (30) days if a nonmonetary default; provided, however, if in order to cure such 'a default, Tax Credit Partner reasonably determines that it must remove the general partner of such Owner, Tax Credit Partner shall so notify CDC -HA and so long as Tax Credit Partner is diligently and continuously attempting to so remove such general partner, Tax Credit Partner shall have until the date thirty (30) days after the effective date of the removal of the general partner or general partners to cure such default but in no event more than one (1) year. 502. Institution of Legal Actions. In addition to any other rights or remedies and subject to the restrictions otherwise set forth in this Agreement, any party may institute an action at law or equity to seek specific performance of the terms of this Agreement, or to cure, correct or remedy any Default, to recover damages for any Default, or to obtain any other remedy consistent with the purpose of this Agreement. Such legal actions must be instituted in the County of San Diego, State of California, downtown branch, or in the District of the United States District Court in the County of San Diego. 503. Entry and Vesting of Title in CDC -HA Prior to Completion of Construction. 503.1 Right of Reentry. In addition to all other rights and remedies the CDC -HA may have at law or in equity, the CDC -HA has the right, at its election, to enter and take possession of Site 1 or Site 2, as applicable, and all improvements thereon, and terminate and revest the fee interest in the Property or the Leasehold in the CDC -HA, as applicable, if after the applicable Closing, the applicable Owner: (a) fails to start the Scope of Development work as required by this Agreement for a period of thirty (30) days after written notice thereof from CDC -HA; or (b) abandons or substantially suspends the Scope of Development work required by this Agreement for a period of thirty (30) days after written notice thereof from CDC -HA, subject to any extensions which may be agreed upon pursuant to Section 602 herein; or (c) transfers or suffers any involuntary transfer of Site 1 or Site 2, as applicable, or any part thereof in violation of contrary to the provisions of this Agreement. 503.2 Limitations on Right of Entry. Such right to enter and vest shall be subject to and be limited by and shall not defeat, render invalid or limit any mortgage or deed of trust permitted by this Agreement that is senior to the Phase 1 Project Deed of Trust or Phase 2 Project Deed of Trust, as applicable. 503.3 Termination of Right of Entry. The CDC-HA's right to enter and take possession of the Site 1 or Site 2, as applicable, and all improvements thereon, and terminate and revest same in the CDC -HA, shall terminate upon the timely completion of the Scope of Development work for the Phase 1 Project or Phase 2 Project, as applicable. . Page 40 of 49 Attachment No. 3 Kimball Highland DDA 504. Rights and Remedies are Cumulative. 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 times, of any other rights or remedies for the same default or any other default by the other party. 505. Inaction Not a Waiver of Default. Any failures or delays by any party in asserting any of its rights and remedies as to any Default shall not operate as a waiver of any Default or of any such rights or remedies, or deprive either such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies shall govern the interpretation and enforcement of this Agreement. 506, Default Relating to Phase 3 Project. For avoidance of doubt, the Scope of Development for the Health Center and financing for such Scope of Development shall be the sole responsibility of Health Center Developer. In all events, the Affordable Housing Developer and each Owner shall not be liable or responsible for any default on the part of the Health Center Developer under this Agreement or any other agreement relating to the development of the Health Center between Health Center Developer and CDC-HC. 600. General Provisions. 601. Notices, Demands and Communications Between the Parties. All notices under this Agreement shall be in writing and sent (a) by certified or registered U.S. mail, return receipt requested, (b) overnight by a nationally recognized overnight courier such as UPS Overnight or FedEx, or (c) by personal delivery. All notices shall be effective upon receipt. (or refusal to accept delivery). All notices shall be delivered to the following addresses or such other addresses as changed by any party from time to time by written notice to the other parties hereto. To CDC -HA: Community Development Commission - Housing Authority of the City of National City 1243 National City Boulevard National City, CA 91950 Attention: Executive Director To Affordable c/o Community HousingWorks Housing 3111 Camino del Rio North, Suite 800 Developer San Diego, CA 92108 and Owner: Attention: President and CEO And with a copy to: Downs Pham & Kuei LLP 235 Montgomery Street, 30th Floor San Francisco, CA 94010 Attention: Irene C. Kuei Page 41 of 49 Attachment No. 3 Kimball Highland DDA To Health San Ysidro Health Center 1601 Precision Park Lane Developer: San Diego, CA 92173 Attention: President & CEO And with a copy to: Wingert, Grebing, Brubaker & Juskie, LLP 600 W. Broadway, 12th Floor San Diego, CA 92101 Attention: Stephen C. Grebing, Esq. 602. Enforced Delay; Extension of Times of Performance. In addition to specific provisions of this Agreement, performance by any party hereunder shall not be deemed to be in Default, and all performance and other dates specified in this Agreement shall be extended, where delays or Defaults are due to: war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; pandemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; acts or omissions of the other party; or any other causes beyond the control and without the fault of the party claiming an extension of time to perform. Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the 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 party within five (5) days of the commencement of the cause. Times of performance under this Agreement may also be extended in writing by the mutual agreement of Executive Director of the CDC -HA and Affordable Housing Developer. 603. Transfers of Interest in Property or Agreement. 603.1 Prohibition. The qualifications ' and identity of Affordable. Housing Developer and each Owner are of particular concern to the CDC -HA. It is because of those qualifications and identity that the CDC -HA has entered into this Agreement with Affordable Housing Developer and Health Center Developer. During the term of this Agreement, the terms of the Declaration, and during the terms of the Ground Lease, no voluntary or involuntary successor in interest of Affordable Housing Developer or any Owner shall acquire any rights or powers under this Agreement, nor shall Affordable Housing Developer or any Owner, except for Health Center Developer, make any total or partial sale, transfer, conveyance, assignment, subdivision, refinancing or lease of the whole or any part of the Property, except for Site 3, or the improvements thereon without prior written approval of the CDC -HA, except as expressly set forth herein. Any proposed total or partial sale, transfer, conveyance, assignment, subdivision, refinancing or lease of the whole or any part of the Property, except for Site 3, or the improvements thereon, other than those permitted in Section 603.2, will entitle CDC -HA to its right of reentry and revesting as set forth in Section 505, hereof. For the reasons cited above, Affordable Housing Developer and each Owner, except for Health Center Developer, represents and agrees for itself, each partner and any successor in interest to itself that without the prior written approval of the CDC -HA, there shall be Page 42 of 49 Attachment No. 3 Kimball Highland DDA no significant change in the ownership of Affordable Housing Developer or any Owner, except for Health Center Developer, or in the relative proportions thereof, or with respect to the identity of the parties in control of Affordable Housing Developer or any Owner, except for Health Center Developer, or the degree thereof, by any method or means; provided, however, that a change in one or more constituent partners of Site 1 Owner or Site 2 Owner is permitted so long as Affordable Housing Developer remains in control of the day to day matters of one of the general partners of Owner. Affordable Housing Developer and each Owner, except for Health Center Developer, shall promptly notify the CDC -HA of any and all changes whatsoever in the identity of the parties in control of the same or the degree thereof, of which it or any of its officers have been notified or otherwise have knowledge or information. Any change (voluntary or involuntary) in the composition, management or control of Affordable Housing Developer or any Owner, except for Health Center Developer, shall be a Default, except as otherwise permitted hereunder. 603.2 Permitted Transfers. Notwithstanding any other provision of this Agreementto the contrary, the CDC -HA approval of an assignment of this Agreement or conveyance of Site 1 or Site 2 or the improvements thereon, or any part thereof, will be granted in connection with any of the following, subject to the CDC -HA and the applicable party executing appropriate documents of transfer which contain any exceptions or reservation of rights permitted under this Agreement (each a "Permitted Transfer"): (a) the leasing of one or more Affordable Units to an occupant in compliance with the Declaration; (b) transfer of up to a Ninety -Nine and Ninety -Nine Hundredths Percent (99.99%) limited interest in the Site 1 Owner or Site 2 Owner to a tax credit investor partner in connection with a tax credit syndication; (c) transfer by the tax credit investor partner of the Site 1 Owner or Site 2 Owner of such tax credit investor partner's interest to an entity in which the tax credit investor partner or its affiliate manages and controls, directly or indirectly, the management decisions of such entity in connection with the tax credit syndication; (d) The conveyance or dedication of any portion of the Property to the City or other appropriate governmental agency, or the granting of easements or permits to facilitate completion of the Scope of Development. (e) Any conveyance for financing purposes (subject to such financing being specifically allowed under this Agreement), including the grant of a deed of trust to secure the funds necessary for completion of the Scope of Development. (f) any transfer directly resulting from the foreclosure of a deed of trust permitted under subsection (e), above; or (g) in the event all of general partners of any Owner are removed by the investor limited partner of such Owner for cause following default under such Owner's partnership agreement, the CDC -HA hereby approves the transfer of the general partners' Page 43 of 49 Attachment No. 3 Kimball Highland DDA interests to a 501(c)(3) tax exempt nonprofit corporation and/or an affiliate of the investor limited partner of such Owner selected by the investor limited partner of such Owner and approved by the CDC -HA, which approval shall not be unreasonably withheld, conditioned or delayed; or (h) Either (i) the exercise by a 501(c)(3) tax exempt nonprofit corporation affiliate of Affordable Housing Developer of its option and right of first refusal to be granted by Site 1 Owner upon the closing of the tax credit syndication for Phase 1, or (ii) the exercise by a 501(c)(3) tax exempt nonprofit corporation affiliate of Affordable Housing Developer of its option and right of first refusal to be granted by Site 2 Owner upon the closing of the tax credit syndication for Phase 2. 603.3 Successors and Assigns. All of the terms, covenants and conditions of this Agreement shall be binding upon Affordable Housing Developer, each Owner, except for Health Center Developer, and each of their permitted successors and assigns. Whenever the term "Affordable Housing Developer," "Affordable Housing Developer" or "Owner" is used in this Agreement, such term shall include any other permitted successors and assigns as herein provided, except for Health Center Developer. 603.4 Assignment by the CDC -HA. The CDC -HA may assignor transfer this Agreement in its entirety, or any of its rights or obligations hereunder. 604. Non -Liability of Officials and Employees. 604.1 CDC -HA. No member, official or employee of the City or CDC -HA shall be personally liable to Affordable Housing Developer, any Owner, or any successor in interest, in the event of any Default or breach of this Agreement or for any amount which may become due to Affordable Housing Developer, any Owner or any of their successors, or on any obligations under the terms of this Agreement. 604.2 Affordable Housing Developer and Owners. No member, directors, official or employee of the Affordable Housing Development or any Owner shall be personally liable to the City or CDC -HA, or any successor in interest, in the event of any Default or breach of this Agreement or for any amount which may become due to the City or CDC -HA or its successors, or on any obligations under the terms of this Agreement. 605. Relationship Among the CDC -HA, Affordable Housing Developer " and Each Owner. It is hereby acknowledged that the relationship among the CDC -HA, Affordable Housing Developer and each Owner is that of independent contractors and not that of a partnership or joint venture and that the CDC -HA, Affordable Housing Developer and ,each Owner shall not be deemed or construed for any purpose to be the agent of the other. The Affordable Housing Developer, Site 1 Owner and Site 2 Owner each agrees to indemnify, hold harmless and defend the CDC -HA and Health Center Developer from any claim made against the CDC -HA or Health Center Developer arising from a claimed relationship of partnership or joint venture among the CDC -HA, Health Center Developer, Affordable Housing Developer or Owner. The Health Center Developer agrees to indemnify, hold harmless and defend the CDC -HA and Affordable Housing Page 44 of 49 Attachment No. 3 Kimball. Highland DDA n Developer from any claim made against the CDC -HA or Affordable Housing Developer arising from a claimed relationship of partnership or joint venture among the CDC -HA, Health Center Developer, Affordable Housing Developer or Owner. 606. CDC -HA Approvals and Actions. Whenever a reference is made herein to an action or approval to be undertaken by the CDC -HA, the Executive Director of the CDC -HA or his or her designee is authorized to act on behalf of the CDC -HA unless specifically provided otherwise or the context should require otherwise. 607. Counterparts. This Agreement may be signed in multiple counterparts which, when signed by all parties, shall constitute a binding agreement. 608. Integration. This Agreement contains the entire understanding between the parties relating to the subject matter of this Agreement. All prior or contemporaneous agreements, understandings, representations and statements, oral and written, are merged in this Agreement and shall be of no further force or effect. Each party is entering this Agreement based solely upon the representations set forth herein and upon each party's own independent investigation of any and all facts such party deems material. All exhibits referred to in this Agreement are hereby incorporated in this Agreement by this reference, regardless of whether or not the exhibits are actually attached to this Agreement. The Recitals to this Agreement are hereby incorporated in this Agreement by this reference. 609. No Real Estate Brokerage Commissions. The CDC -HA, Health Center Developer and Affordable Housing Developer each represent and warrant to the others that no broker or finder is entitled to any commission or finder's fee in connection with Site 2 or the Kimball Public Right of Way. The parties agree to defend and hold harmless the other party from any claim to any such commission or fee from any broker, agent or finder with respect to this Agreement which is payable by such party. 610. Attorneys' Fees. The parties agree that the prevailing party in litigation for the breach and/or interpretation and/or enforcement of the terms of this Agreement shall be entitled to their expert witness fees, if any, as part of their costs of suit, and reasonable attorneys' fees as may be awarded by the court, pursuant to California Code of Civil Procedure ("CCP") Section 1033.5 and any other applicable provisions of California law, including, without limitation, the provisions of CCP Section 998. 611. Titles and Captions. Titles and captions are for convenience of reference only and donot define, describe or limit the scope or the intent of this Agreement or of any of its terms. References to section numbers are to sections in this Agreement, unless expressly stated otherwise. 612. Interpretation. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall be deemed to include the others where and when the context so dictates. The word "including" shall be construed as if followed by the words "without limitation." This Agreement shall be interpreted as though prepared jointly by both parties. Page 45 of 49 Attachment No. 3 Kimball Highland DDA 613. No Waiver. A waiver by any party of a breach of any of the covenants, conditions or agreements under this Agreement to be performed by the other party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions of this Agreement. 614. Modifications. Any amendment, alteration, change or modification of or to this Agreement, in order to become effective, shall be made in writing and in each instance signed on behalf of each party (any amendment, alteration, change ,or modification of this Agreement on behalf of the CDC -HA, including without limitation changes to the economic terms of this Agreement and its exhibits, shall be made on behalf of the CDC -HA by the Executive Director of the CDC -HA in such Executive Director's sole discretion). 615, Severability. If any term, provision, condition or covenant of this Agreement or its application to any party or circumstances shall be held, to any extent, invalid or unenforceable, the remainder of this Agreement, or the application of the term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law. 616. Computation of Time. The time in which any act is to be done under this Agreement is computed by excluding the first day (such as the day escrow opens), and including the last day, unless the last day is a holiday or Saturday or Sunday, and then that day is also excluded. The term "holiday" shall mean all holidays as specified in Section 6700 and 6701 of the California Government Code. If any act is to be done by a particular time during a day, that time shall be Pacific Time Zone time. 617, Legal Advice. Each. party represents and warrants to the other the following: they have carefully read this Agreement, and in signing this Agreement, they do so with full knowledge of any right which they may have; they have received independent legal advice from their respective legal counsel as to the matters set forth in this Agreement, -or have knowingly chosen not to consult legal counsel as to the matters set forth in this Agreement; and, they have freely signed this Agreement without any reliance upon any agreement, promise, statement or representation by or on behalf of the other parties, or their respective agents, employees, or attorneys, except as specifically set forth in this Agreement, and without duress or coercion, whether economic or otherwise. 618, Time of Essence. Time is expressly made of the essence with respect to the performance by the CDC -HA, Health Center Developer and Affordable Housing Developer of each and every obligation: and condition of this Agreement. 619. Cooperation. Each party agrees to cooperate with the other in this transaction and, in that regard, to sign any and all documents which may be reasonably necessary, helpful, or appropriate to carry out the purposes and intent ofthis Agreement including, but not limited to, releases or additional agreements. 620.- Conflicts of Interest. No member, official or employee of the City or the CDC -HA shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, Page 46 of 49 Attachment No. 3 Kimball Highland DDA official or employeeparticipate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. 621. Exhibits and Recitals Incorporated. All exhibits referred to in this Agreement are hereby incorporated in this Agreement by this reference, regardless of whether or not the exhibits are actually attached to this Agreement. The recitals to this Agreement are hereby incorporated in this Agreement by this reference. 622. Applicable Law. The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 623. Authority to Sign. All individuals signing this Agreement for a party which is a corporation, limited liability company, partnership or other legal entity, or signing under a power of attorney, or as a trustee, guardian, conservator, or in any other legal capacity, covenant to the CDC -HA that they have the necessary capacity and authority to act for, sign and bind the respective entity orprincipal on whose behalf they are signing. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above. CDC -HA: Community Development Commission -Housing Authority of the City of National City By: Brad Raulston, Executive Director APPROVED AS TO FORM: Angil P Morris -Jones, City Attorney CDC -HA General Counsel By: [SIGNATURES CONTINUED ON FOLLOWING PAGE] Page 47 of 49 AFFORDABLE HOUSING DEVELOPER: Community HousingWorks, a California nonprofitlblic be efit co r . ration By: [SIGNATURES CONTINUED ON FOLLOWING PAGE] 48 Page 48 of 49 HEALTH CENTER DEVELOPER: Centro De Salud De La Comunidad De San Ysidro, Inc., a California nonprofit public benefit corporation, dba San Ysidro Hea By: Ke%n Mattson President & CEO 49 Page 49 of 49 EXHIBIT A PARCEL MAP SITE 2 RESIDENTIAL q,k•\ha -� 1 \s„,,,,E. • ,r ,% .- \-,«,,1 .% - , 14TH ST {I — — _j r STIL --4 tRfD M IS)mot Wtt.t nit LOT w.nneaswum., wwwww, womotr.xo w MOONY. w.ry urbx vrzatmmenut .ua ew.wa .0 n+n.wa.lvtnwa swans raao 1: ..o tpY a M NSW a Wm,vac.nOM I SIEET 1 OF 1 LOT EXHIBIT KIMBALL HIGHLAND KIMBALL WAY/14TH ST, NATIONAL CITY, CA TABLE 1 PROJECT DESCRIPTION KIMBALL HIGHLANDS MASTER PLAN CITY OF NATIONAL CITY I. Site Area II. Gross Building Area Net Residential Area Common Area (1) Circulation (1) Residential Gross Building Area Add: Senior Center Total Gross Building Area Construction Type/ Number of Stories III. IV. Unit Mix Studio One Bedroom Two Bedroom Three Bedroom Number of Units V. Density VI. Affordability Mix Units @ 30% of AMI Units @ 50%of AMI Units @ 60%of AMI Units @ 70%of AMI Manager Unit Total/Average Average Affordability VII. Parking (1) Residential Senior Center Total (1) SITE ONE 1320 Highland Parking Lot Per Developer correspondence dated 9/3/20. 1.6 Acres Zoned: MXD-2 71,850 SF 6,981 SF 18,871 SF 97,702 SF 0 SF 97,702 SF 74% 7% 19% 100% Type V - 4 stories over Type I - 4 stories Number of Units 12 20 29 24 85 Units Units Units Units Units 14% 24% 34% 28% 100% 53 Units/Acre 10 Units 9 Units 50 Units 15 Units 12% 11% 59% 18% Average Unit Size (1) 470 SF 650 SF 850 SF 1.190 SF 845 SF 1 Unit 1% 85 Units 100% 57% AMI (Excl. Manager Unit) Structured - 4 Levels 90 Spaces 0 Spaces 90 Spaces (2) Includes 17 tuck -under spaces for residential use. 1.1 Spaces/Unit 330 SF/Space SITE TWO 1221 D Avenue 1.8 Acres Zoned: RM-3 54,100 SF 5,902 SF 12,640 SF 72,642 SF 8.834 SF 81,476 SF 74% 8% 17% 100% Type V - 3 stories over Type I -1 story Number Average of Units Unit Size (1) 0 Units 0% 470 SF 10 Units 17% 650 SF 35 Units 58% 850 SF 15 Units 25% 1.190 SF 60 Units 100% 902 SF 33 Units/Acre 5 6 38 10 1 60 58% Units Units Units Units 8% 10% 63% 17% Unit 2% Units 100% AMI (Excl. Manager Unit) Surface and Tuck -Under 66 Spaces (2) 20 Spaces 86 Spaces 1.1 Spaces/Unit 2.3 Spaces/1,000 SF TOTAL 3.4 Acres 125,950 SF 12,883 SF 31,511 SF 170,344 SF 8,834 SF 179,178 SF 74% 8% 18% 100% Number Average of Units Unit Size (1) 12 Units 8% 470 SF 30 Units 21% 650 SF 64 Units 44% 850 SF 39 Units 27% 1.190 SF 145 Units 100% 869 SF 43 Units/Acre 15 Units 10% 15 Units 10% 88 Units 61% 25 Units 17% 2 Units 1% 145 Units 100% 58% AMI (Excl. Manager Unit) 156 Spaces 20 Spaces 176 Spaces 1.1 Spaces/Unit 2.3 Spaces/1,000 SF Prepared by: Keyser Marston Associates, Inc. Page 1 Filename is\National City_Kimball Highland_v7_Final;10/9/2020;rsp TABLE 2 ESTIMATED DEVELOPMENT COSTS KIMBALL HIGHLANDS MASTER PLAN CITY OF NATIONAL CITY I. Direct Costs (1)(2) Off -Site Improvements (3)(4) Relocation (Cell Tower) (3) On -Site Improvements (s) Geotechnical Mitigation Parking ShelhConstruction - Residential Shell Construction - Senior Center FF&E Escalation Contingency _ Subtotal Direct Costs Add: Prevailing Wage Impact Total Direct Costs II. Indirect Costs Architecture & Engineering Permits & Fees (3) Legal & Accounting Taxes & Insurance Developer Fee Construction Management Marketing/Lease-Up Contingency Total Indirect Costs III. Financing Costs Loan Fees Predevelopment Loan Interest Interest During Construction/Lease-up Accrued Interest on Soft Debt Title/Recording/Escrow TCAC/Syndication Fees Operating Lease-Up/Reserves Total Financing Costs Totals Per Unit $1,198,860 $8,268 $890,000 $6,138 $3,888,117 $26,815 $2,698,072 $18,607 $4,424,918 $30,517 $32,365,000 $223,207 $2,050,592 $14,142 $220,000 $1,517 $2,347,000 $16,186 $3,255,000 $22,448 $53,337,559 $367,845 $8,112,000 $55,945 $61,449,559 $423,790 $3,746,720 $25,839 $2,159,838 $14,895 $377,900 $2,606 $799,939 $5,517 $9,671,000 $66,697 $212,000 $1,462 $199,700 $1,377 $375,067 $2,587 $17,542,164 $120,980 $1,258,000 $8,676 $247,140 $1,704 $3,156,000 $21,766 $457,060 $3,152 $65,000 $448 $312,490 $2,155 $709,939 $4,896 $6,205,629 $42,797 Comments $8 Per SF Site Allowance $26 Per SF Site $18 Per SF Site $25,142 Per Space $190 Per SF - Residential $232 Per SF - Senior Center Allowance 4.9% of Directs - Excl. FF&E 6.5% of Directs $298 Per SF GBA 15.3% of Directs - Excl. FF&E $343 Per SF GBA 7.0% of Directs (a) $12 Per SF GBA 0.7% of.Directs (a) 1.5% of Directs (s) 18.1% of Directs (a) 0.4% of Directs (a) Allowance 2.2% of Indirects 28.5% of Directs 2.0% of Directs 0.4% of Directs 5.1% of Directs 0.7% of Directs 0.1% of Directs 0.5% of Directs 1.2% of Directs 10.1% of Directs IV. Total Costs - Excl. Acquisition $85,197,000 $587,566 $475 Per SF GBA V. Land Acquisition Costs - Site One (7) $2,860,000 $19,724 VI. Capitalized Ground Lease - Site Two (6) $3,215,000 $22,172 $41 Per SF - Site One $41 Per SF - Site Two VII. Grand Total Costs $91,272,000 $629,462 $509 Per SF GBA (1) Assumes payment of prevailing wages. (2) Includes pro rata share of general conditions, contractor overhead and profit, and contractor insurance. (3) Estimate; not verified by KMA or City. • (4) Includes costs for sewer realignment. (5) Includes costs for additional grading and soils export. (6) Acquisition costs for Site One per Purchase and Sale Agreement dated 11/18/19 and subsequent Amendments. (7) Actual acquisition costs for Site Two pending appraisal. (8) Direct costs excluding prevailing wages. Prepared by: Keyser Marston Associates, Inc. Filename: National City Kimball Highland_v7_Final;10/9/2020;rsp Page 2 TABLE 3 NET OPERATING INCOME KIMBALL HIGHLANDS MASTER PLAN CITY OF NATIONAL CITY I. Gross Scheduled Income Studio Studio Studio Studio @ 30% AMI @ 50% AMI @ 60% AMI @ 70%AMI # of Units $/Month (1) 3 $581 1 $986 5 $1,188 3 $1,390 Total Annual $20,916 $11,832 $71,280 $50,040 One Bedroom One Bedroom One Bedroom One Bedroom @ 30% AMI @ 50% AMI @ 60% AMI - @ 70%AMI 3 3.- 18 6 $615 $1,049 $1,265 $1,482 $22,140 $37,764 $273,240 $106,704 Two Bedroom Two Bedroom Two Bedroom Two Bedroom Two Bedroom @ 30%AMI @ 50%AMI @ 60% AMI @ 70%AMI @ Manager 6 7 39 10 2 $736 $1,256 $1,516 $1,776 $0 $52,992 $105,504 $709,488 $213,120 $0 Three Bedroom Three Bedroom Three Bedroom Three Bedroom @ 30% AMI @ 50% AMI @ 60% AMI @ 70%AMI 3, 4 26 6 $846 $1,446 $1,747 $2,047 $30,456 $69,408 $545,064 $147,384 Total/Average 145 $1,418 $2,467,332 Add: Other Income Total Gross Scheduled Income (GSI) II. Effective Gross'Income (EGI) (Less) Vacancy Total Effective Gross Income (EGI), III. Operating Expenses (Less) Operating Expenses - (Less) Tenant Services (2) (Less) Property Taxes/Assessments (3) (Less) Replacement Reserves (Less) CaIHFA Monitoring Fees (Less) City Housing Authority Monitoring Fees Total Expenses $8 /Unit/Month 5.0% of GSI $5,400 /Unit/Year $0 /Unit/Year $69 /Unit/Year $300 /Unit/Year $52 /Unit/Year $201 /Unit/Year $6,021 /Unit/Year 37.0% of EGI $13,920 $2,481,252 ($124,063) $2,357,189 ($783,000) $0 ($10,000) ($43,500) ($7,500) ($29,000) ($873,000) IV. Net Operating Income $1,484,189 V. (Less) Payment for City's Land Loan VI. (Less) Payment for Housing Authority's Cash Loan 0.29% of City Cash Loan 0.93% of City Land Loan ($30,000) ($30,000) VII. NOI after Debt Service for Local Public Loans $1,424,189 (1) Reflects 2020 Tax Credit. Allocation Committee (TCAC) rents net of monthly utility allowance of $25 for studio, $34 for one -bedroom, $44 for two -bedroom units, and $55 for three -bedroom units. Utility profile consists of electric heat, (2) See Table 5. (3) Assumes that the project will qualify for tax-exempt status. Prepared by: Keyser Marston Associates, Inc. Filename: National City_Kimball Highland_v7_FinaI;10/9/2020;rsp Page 3 TABLE 4 FINANCING DEFICIT KIMBALL HIGHLANDS MASTER PLAN CITY OF NATIONAL CITY I. Sources of Funds Supportable Permanent Loan (1) Tax Credit Equity Investment - Federal (2) Tax Credit Equity Investment - State (2) Deferred Developer Fee (3) General Partner Equity Contribution (3) CaIHFA Mixed -Income Program (MIP) Loan (4) Accrued Interest on Soft Debt CDLAC/TCAC Refunds on Deposits Total Sources of Funds II. (Less) Development Costs - Excl. Acquisition Total Per Unit $22,599,000 $156,000 $30,176,000 $208,000 $10,279,000 $71,000 $0 $0 $7,471,000 $52,000 $6,400,000 $44,000. $457,000 $3,000 $200,000 $1,000 $77,582,000 $535,000 ($85,197,000) ($588,000). III. Residual Land Value ($7,615,000) ($53,000) IV. (Less) Land Acquisition Costs - Site One V. (Less) Capitalized Ground Lease Payment - Site Two ($2,860,000) ($20,000) ($3,215,000) ($22,000) VI. Financing Deficit ($13,690,000) ($94,000) VII. Proposed City Sources of Funds Ground Lease Note Residual Receipts Cash Loan Total City Sources of Funds $3,215,000 $22,000 $10,475,000 $72,000 $13,690,000 $94,000 1 Prepared by: Keyser Marston Associates, Inc. Filename: National City_Kimball Highland_v7_Final;10/9/2020;rsp Page 4 TABLE 4 (CONT'D.) FINANCING DEFICIT KIMBALL HIGHLANDS MASTER PLAN CITY OF NATIONAL CITY (1) Supportable Permanent Loan NOI Interest Rate Term (years) Debt Coverage Ratio Annual Debt Service Supportable Permanent Loan $1,424,189 4.61% 40 1.15 $1,238,425 $22,599,430 (2) Low Income Housing Tax Credits (Federal) Estimate of Eligible Basis: Total Development Costs (Less) Subtotal Ineligible Costs Eligible Basis Estimate of Maximum Threshold Basis Limit: * $91,272,000 11% ($9,962,230) $81,309,770 $85,704,132 * Reflects basis adjustments for prevailing wages, elevator, and units below 50% AMI. development impact fees of $1,734,838. Tax Credit Proceeds: Maximum Eligible Basis (Less) Voluntary Adjustment in Basis Total Requested Unadjusted Basis Impacted Bonus Factor Tax Credit Qualified Units/Applicable Factor Tax Credit Rate Total Tax Credits @ Limited Partner Share Present Market Value @ Federal 0% 130% 100% 3.07% 10 100% 93% $81,309,770 $81,309,770 $105,702,701 $105,702,701 $3,245,073 $32,450,729 $32,447,484 $30,176,160 Includes State $81,309,770 49% ($40,028,223) $41,281,547 100% $41,281,547 100% $41,281,547 30.00% $12,384,464 1 $12,384,464 100% $12,383,226 83% $10,279,105 (3) Estimate of Deferred Developer Fee Eligible Basis (Less) Developer Fee Unadjusted Eligible Basis Total Developer Fee General Partner Equity Contribtuion Deferred Developer Fee Total.Deferred/Contributed Developer Fee Upfront Developer Fee $81,309,770 ($9,671,206) $71,638,564 13.5% $9,671,206 $7,471,206 77,3% $7,471,206 $2,200,000 (4) CaIHFA Mixed Income Program (MIP) Units at 50% AMI - 80% AMI Per Unit Allocation Total MIP Loan 128 Units $50,000 /Unit $6,400,000 Prepared by: Keyser Marston Associates, Inc. Filename: National City_Kimball Highland_v7_Final;10/9/2020;rsp Page 5 TABLE 5 CASH FLOW PROJECTION KIMBALL HIGHLANDS MASTER PLAN CITY OF NATIONAL CITY I. Gross Scheduled Income (GSI) (Less) Vacancy 1 2 3 4 5 6 7 8 9 2.5% $2,481,252 $2,543,283 $2,606,865 $2,672,037 $2,738,838 $2,807,309 $2,877,492 $2,949,429 $3,023,165 5.0% ($124,063) ($127,163) ($130,342) ($133,601) ($136,9411 ($140,364) ($143,873) ($147,470) ($151,157) II. Effective Gross Income (EGI) $2,357,189 $2,416,120 $2,476,523 $2,538,436 $2,601,897 $2,666,945 $2,733,618 $2,801,959 $2,872,008 (Less) Operating Expenses (1) ($873,000) ($901,620) ($931,239) ($961,891) ($993,613) ($1,026,442) ($1,060,417) ($1,095,578) ($1,131,966) (Less) Annual Payment to City ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) (Less) Annual Payment to Housing Authority ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) III. Net Operating Income (NOI) $1,424,189 $1,454,500 $1,485,285 $1,516,545 $1,548,284 $1,580,503 $1,613,201 $1,646,381 $1,680,042 (Less) Debt Service ($1,238,425) ($1,238,425) ($1,238,425) ($1,238,425) ($1,238,425) ($1,238,425) ($1,238,425) ($1,238,425) ($1,238,425) IV. Project Cash Flow $185,764 $216,075 $246,859 $278,120 $309,859 $342,077 $374,776 $407,956 $441,617 V. (Less) Asset Management Fees Limited Partner Asset Mgmt. Fees 3.0% ($12,500) ($12,875) ($13,261) ($13,659) ($14,069) ($14,491) ($14,926) ($15,373) ($15,835) General Partner Asset Mgmt. Fees 3.0% ($25,000) ($25,750) ($26,523) ($27,318) ($28,138) ($28,982) ($29,851) ($30,747) ($31,669) (Less) Total Asset Management Fees ($37,500) ($38,625) ($39,784) ($40,977) ($42,207) ($43,473) ($44,777) ($46,120) ($47,504) VI. (Less) Resident Services Fee 3.5% ($60,000) ($62,100) ($64,274) ($66,523) ($68,851) ($71,261) ($73,755) ($76,337) ($79,009) VII. Net Cash Flow $88,264 $115,350 $142,802 $170,620 $198,801 $227,343 $256,244 $285,499 $315,105 VIII. Developer Fee Repayment $0 IX. Cash Flow Available for Distribution (2) $88,264 $115,350 $142,802 $170,620 $198,801 $227,343 $256,244 $285,499 $315,105 (1) Reflects annual escalation at 3.5% for operating expenses and monitoring fee; 0% for replacement reserves; and 2.0% for taxes/assessments. (2) See Table 6 for cash flow distribution. Prepared by: Keyser Marston Associates, Inc. Filename iional City_Kimball Highland_v7_Final;10/9/2020;rsp Page 6 _ TABLE 5 CASH FLOW PROJECTION KIMBALL HIGHLANDS MASTER PLAN CITY OF NATIONAL CITY • 10 11 12 13 14 15 36 55 I. Gross Scheduled Income (GSI) 2.5% $3,098,744 $3,176,212 $3,255,618 $3,337,008 $3,420,433 $3,505,944 $5,888,520 $9,413,684 (Less) Vacancy 5.0% ($154,936) ($158,809) ($162,779) ($166,849) ($171,020) ($175,296) ($294,423) ($470,680) II. Effective Gross Income (EGI) $2,943,808 $3,017,403 $3,092,838 $3,170,159 $3,249,413 $3,330,648 $5,594,097 $8,943,004 (Less) Operating Expenses (1) ($1,169,624). ($1,208,596) ($1,248,929) ($1,290,670) ($1,333,868) . ($1,378,575) ($2,777,874) ($5,284,106) (Less) Annual Payment to City. ($30,000) ($30,000) ($30,000). ($30,000) ($30,000) ($30,000) ($30,000). ($30,000) (Less) Annual Payment to Housing Authority ($30,000) ($30,000) ($30,000) . ($30,0001 ($30,000) ($30,000) ($30,000) ($30,000) III. Net Operating Income (NOI) $1,714,184 $1,748,807 $1,783,909 $1,819,489 $1,855,545 $1,892,074 $2,756,222 $3,598,898 (Less) Debt Service ($1,238,425) ($1,238,425) ($1,238,425) ($1,238,425) ($1,238,425) ($1,238,425) ($1,238,425) Pli IV. • Project Cash Flow $475,759 $510,382 $545,484 $581,064 $617,120 $653,649 . $1,517,797 $3,598,898 V. (Less) Asset Management Fees -Limited Partner Asset Mgmt. Fees 3.0% ($16,310) ($16,799) ($17,303) ($17,822) ($18,357) ($18,907) $0 $0 General Partner Asset Mgmt. Fees 3.0%. ($32,619) ($33,598) ($34,606) ($35,644) ($36,713) ($37,815) ($70,347) ($123,353) (Less) Total Asset Management Fees ($48,929) ($50,397). ($51,909) ($53,466). ($55,070) ($56,722) ($70,347) ($123,353) VI. (Less) Resident Services Fee 3.5% ($81,774) ($84,636) ($87,598) ($90,664) ($93,837) ($97,122) ($200,015) ($384,530)' VII. Net Cash Flow $345,056 $375,349 $405,977 $436,934 $468,212 $499,805 $1,247,435 $3,091,015 VIII. Developer Fee Repayment IX. Cash Flow Available for Distribution (2) $345,056 $375,349 $405,977 $436,934 $468,212 $499,805 $1,247,435 $3,091,015 (1) Reflects annual escalation at 3.5% for operating expenses and monitoring fee; 0% for replacement reserves; and 2.0% for taxes/assessments. (2) See Table 6 for cash flow distribution. Prepared by: Keyser Marston Associates, Inc. Filename is\National City_Kimball Highland_v7_Fina1;10/9/2020;rsp Page 7 TABLE 6 PUBLIC LOAN REPAYMENT SCHEDULE KIMBALL HIGHLANDS MASTER PLAN CITY OF NATIONAL CITY I. Cash Flow Available for Distribution 1 2 3 4 5 6 7 8 9 $88,264 $115,350 $142,802 $170,620 $198,801 $227,343 $256,244 $285,499 $315,105 II. Allocated to Pay Down Public Loans 50.0% $44,132 $57,675 $71,401 $85,310 $99,401 $113,672 $128,122 $142,749 $157,552. City of National City - Land Value Loan Beginning Balance Interest (Less) Debt Service Payment .(Less) Cash Flow Credit (1) Ending Balance Projected Total Cash to the City (Rounded) $3,215,000. ; $3,251,377 $3,278,525 $3,296,320 $3,304,637 $3,303,352 $3,292,343 $3,271,486 $3,240,662 3.0% $96,450 $96,450 $96,450 $96,450 $96,450 $96,450 $96,450 $96,450 $96,450 ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,073) ($39,302) ($48,6551 ($58,133) ($67,735) ($77,460) ($87,307) ($97,274) ($107,361) $3,251,377 $3,278,525 $3,296,320 $3,304,637 $3,303,352 $3,292,343 $3,271,486 $3,240,662 $3,199,750 $60,000 $69,000 $79,000 $88,000 $98,000 $107,000 $117,000 $127,000 $137,000 IV. Housing Authority National City - Cash Loan Beginning Balance Interest (Less) Debt Service Payment (Less) Cash Flow Credit (1) Ending Balance $10,475,000 1 $10,759,250 $11,043,500 $11,327,750 $11,612,000 $11,896,250 $12,180,500 $12,464,750 $12,749,000 3.0% $314,250 $314,250 $314,250 $314,250 $314,250 $314,250 $314,250 ' $314,250 $314,250 ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) $10,759,250 $11,043,500 $11,327,750 $11,612,000 $11,896,250 $12,180,500 $12,464,750 $12,749,000 $13,033,250 V. "CaIHFA Mixed -Income Program Loan Beginning Balance : $6,400,000 1 $6,561,941 $6,719,568 Interest 2.75% $176,000 $176,000 $176,000 (Less) Cash Flow Credit 31.9% ($14,059) ($18,373) ($22,746) Ending Balance $6,561,941 $6,719,568' $6,872,822 (1) The City and Housing Authority (combined) will receive 68.1% of the public agencies' share of residual receipts. The City's Land Loan will be repaid in its entirety before the Housing Authority receives any - re"sidual receipt payments. The City Land Loan is.. projected to be repaid in Year 27. Prepared by: Keyser Marston Associates, Inc. Filename: i:j' -al City_Kimball Highland_v7_Final;10/9/2020;rsp $6,872,822 $7,021,645 $7,165,979 $7,305,767 $7,440,952 $7,571,477 $176,000 $176,000 $176,000 $176,000 $176,000 $176,000 ($27,177) ($31,666) ($36,212) ($40,815) ($45,475) ($50,191) $7,021,645 $7,165,979 $7,305,767. $7,440,952 $7,571,477. $7,697,286 • Page R TABLE 6 PUBLIC LOAN REPAYMENT SCHEDULE KIMBALL HIGHLANDS MASTER PLAN CITY OF NATIONAL CITY I. Cash Flow Available for Distribution 10 11 12 13 14 15 36 55 $345,056 $375,349 $405,977 $436,934 $468,212 $499,805 $1,247,435 $3,091,015 II. Allocated to Pay Down Public Loans 50.0% $172,528 $187,674 $202,988 $218,467 $234,106 $249,902 $623,718 $1,545,507 III. City of National City - Land Value Loan Beginning Balance $3,199,750 $3,148,176 $3,084,734 $3,008,953 $2,920,351 $2,818,434 Interest 3.0% $95,993 594,4.45 $92,542 $90,269 $87,611 $84,553 (Less) Debt Service Payment ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) (Less) Cash Flow Credit (1) ($117,566) ($127,888) ($138,323) ($148,871) ($159,528) ($170,2921 Ending Balance $3,148,176 $3,084,734 $3,008,953 $2,920,351 $2,818,434 $2,702,695 Projected Total Cash to the City (Rounded) $148,000 $158,000 $168,000 $179,000 $190,000 $200,000 IV. Housing Authority National City - Cash Loan Beginning Balance $13,033,250 $13,317,500 $13,601,750 $13,886,000 $14,170,250 $14,454,500 Interest 3.0% $314,250 $314,250 $314,250 $314,250 $314,250 $314,250 (Less) Debt Service Payment ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) (Less) Cash Flow Credit (1) 0 0 0 0 $0 $0 Ending Balance $13,317,500 $13,601,750 $13,886,000 $14,170,250 $14,454,500 $14,738,750 $17,386,082 $314,250 ($30,000) ($425,022) $17,245,310 $6,619,019 $198,571 ($30,000) ($1,053,160) $5,734,000 V. CaIHFA Mixed -Income Program Loan Beginning Balance $7,697,286 $7,818,324 $7,934,537 $8,045,872 $8,152,276 $8,253,697 $9,077,648 $4,889,943 Interest 2.75% $176,000 $176,000 $176,000 $176,000 $176,000 $176,000 $176,000 $134,473 (Less) Cash Flow Credit 31.9% ($54,9621 ($59,787) ($64,665) ($69,596) ($74,578) ($79,611) ($198,695) ($492,347) Ending Balance $7,818,324 $7,934,537 $8,045,872 $8,152,276 $8,253,697 $8,350,087 $9,054,952 $4,532,000 (1) The City and Housing Authority (combined) will receive 68.1% of the public agencies' share of residual receipts. The City's Land Loan will be repaid in its entirety before the Housing Authority receives any residual receipt payments. The City Land Loan is projected to be repaid in Year 27. Prepared by: Keyser Marston Associates, Inc. Filename: is National City_Kimball Highland_v7_Final;10/9/2020;rsp Page 9 RESOLUTION NO. 2020 - RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION -HOUSING AUTHORITY OF THE CITY OF NATIONAL CITY ("HOUSING AUTHORITY") (1) AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE A DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE HOUSING AUTHORITY, COMMUNITY HOUSINGWORKS, AND CENTRO DE LA SALUD DE LA COMUNIDAD DE SAN YSIDRO, INC., DBA SAN YSIDRO HEALTH, FOR THE DEVELOPMENT OF THE KIMBALL HIGHLAND MASTER PLAN THAT INCLUDES (A) 60 AFFORDABLE HOUSING UNITS AND A NEW SENIOR CENTER ON A PARCEL OF LAND OWNED BY THE HOUSING AUTHORITY LOCATED AT 1221 "D" AVENUE, AND (B) 85 AFFORDABLE HOUSING UNITS, A PROGRAM OF ALL-INCLUSIVE CARE FOR THE ELDERLY CENTER, AND A FEDERALLY QUALIFIED HEALTH CENTER ON A PARCEL OF LAND LOCATED ON THE WESTERLY SIDE OF 1320 HIGHLAND AVENUE; AND (2) AUTHORIZING THE ESTABLISHMENT OF A HOUSING AUTHORITY FUND BASELINE APPROPRIATION OF $10,475,000 BUT NOT -TO - EXCEED $11,662,000 FROM FUND BALANCE OF THE HOUSING AUTHORITY FUND FOR A HOUSING AUTHORITY LOAN TO COMMUNITY HOUSINGWORKS TO FINANCE THE DEVELOPMENT OF THE AFFORDABLE HOUSING AND NEW SENIOR CENTER WHEREAS, the Community Development Commission -Housing Authority of the City of National City ("Housing Authority" or "CDC -HA"), Community Housing Works ("Affordable Housing Developer") and Centro De Salud De La Comunidad De San Ysidro, Inc., dba San Ysidro Health ("Health Center Developer") are all of the parties to that certain Exclusive Negotiation Agreement (D Avenue: Mixed -Use Master Plan) by and among Housing Authority, Affordable Housing Developer, and Health Center Developer, dated as of November 19, 2019 (as amended, the "ENA"); and WHEREAS, the Disposition and Development Agreement ("Agreement" or "DDA") among the Housing Authority, Affordable Housing Developer, and Health Center Developer will supersede the ENA in its entirety; and WHEREAS, the Affordable Housing Developer entered into a Purchase and Sale Agreement with Patricia L. Peterson, Trustee of the L.O. Lindemulder Trust No. 1, and Patricia L. Peterson, and Mary M. Peterson, Co -Trustee of the Peterson Family Trust B dated July 1, 1980 (collectively, "Seller") pursuant to which the Affordable Housing Developer intends to acquire that certain real property identified as APN 560-410-03, 560- 050-06, 560-050-12 and 505-050-10 (collectively, the "Peterson Property") as Site 1 and a portion of Site 3 as shown on the Exhibit "A" of the Agreement; and; WHEREAS, the Affordable Housing Developer shall construct the approximately 85-unit affordable housing project, parking for the affordable housing project and off -site improvements ("Phase 1 Project") on Site 1; and Resolution No. 2020 — Page Two WHEREAS, the Housing Authority owns certain real property described as APN 560-410-06 and shown on the Parcel Map attached to the Agreement as Exhibit A, which the Housing intends to lease to an affiliate of the Affordable Housing Developer ("Site 2 Owner"), upon which the Site 2 Owner shall construct approximately 60-units of affordable housing, Senior Center operated by the City of National City, and parking ("Phase 2 Project") on Site 2 and the Housing Authority desires to ground lease Site 2 to the Site 2 Owner and the Affordable Housing Developer. desires for the Site 2 Owner to lease Site 2 from CDC -HA pursuant to a Ground Lease as defined in the Agreement; and WHEREAS, the Housing Authority owns that certain Public Right of Way located at Kimball Way as shown on the Exhibit "A" of the Agreement ("Kimball Public Right of Way") and the Housing Authority desires to sell fee simple title to the Kimball Public Right of Way to the Health Center Developer pursuant to Health and Safety Code Section 34312.3(b); and WHEREAS, prior to or concurrently with the closing of Affordable Housing Developer's acquisition of the Peterson Property from Seller, the Affordable Housing Developer desires to sell fee simple title to that certain real property and improvements identified as all of APN 560-410-03, and portions of APN 560-050-06 and 560-050-12 to Health Center Developer; and WHEREAS, the Kimball Public Right of Way and APN 560-410-03, and the portions of APN 560-050-06 and 560-050-12 are defined herein collectively as Site 3 and the Health Center Developer shall construct the Program of All -Inclusive Care for the Elderly Clinic and Federally Qualified Health Center to be developed by Health Center Developer on Health Center Site, parking for the Program of All -Inclusive Care for the Elderly Clinic and Federally Qualified Health Center ("Phase-3 Project"); and WHEREAS, the Housing Authority shall provide subordinate mortgage loans in the aggregate amount of up to the Housing Authority Loan Amount to the Site 1 Owner and/or Site 2 Owner to finance the acquisition, construction and development of the Phase 1 Project, and the Phase 2 Project, as applicable. Provided, however, it is anticipated that Site 1 Owner and Site 2 Owner will be the same entity and that the Phase 1 Project and the Phase 2 Project will be one and the same project; and WHEREAS, the baseline aggregate Housing Authority Loan Amount is up to $10,475,000.00; provided, however, the aggregate Housing Authority Loan Amount may be increased to $11,662,000.00 upon delivery by the Affordable Housing Developer to the CDC -HA of evidence which is sufficient to demonstrate that the other financing sources for the Phase 1 Project and the Phase 2 Project are insufficient to construct the Phase 1 Project and the Phase 2 Project, as determined in the sole discretion of the Executive Director of the Housing Authority. Resolution No. 2020 — Page Three NOW, THEREFORE, BE IT RESOLVED that the Community Development Commission -Housing Authority of the City of National City hereby finds and declares that the above recitals are true and correct. BE IT FURTHER RESOLVED that the Community Development Commission - Housing Authority of the City of National City authorizes the Executive Director to execute a Disposition and Development Agreement by and between the Housing Authority, Community HousingWorks, and Centro De La Salud De La Comunidad de San Ysidro, Inc., dba San Ysidro Health for the development of the Kimball Highland Master Plan that includes (a) 60 affordable housing units and a new senior center on a parcel of land owned by the Housing Authority located at 1221 "D" Avenue, and (b) 85 affordable housing units, a Program of All -Inclusive Care for the Elderly Center, and a Federally Qualified Health Center on a parcel of land located on the westerly side of 1320 Highland Avenue. BE IT FURTHER RESOLVED that the Community Development Commission - Housing Authority of the City of National City authorizes the establishment of a Housing Authority Fund baseline appropriation of $10,475,000 but not -to -exceed $11,662,000 from fund balance of the Housing Authority Fund for a Housing Authority Loan to Community HousingWorks to finance the development of the affordable housing and new senior center. PASSED and ADOPTED this 20TH day of October, 2020. Alejandra Sotelo Solis, Chairwoman ATTEST: Brad Raulston, Secretary APPROVED AS TO FORM: Angil P. Morris -Jones, General Counsel 0‘19-'.I1 DISPOSITION AND DEVELOPMENT AGREEMENT By and Among the COMMUNITY DEVELOPMENT COMMISSION - HOUSING AUTHORITY OF THE CITY OF NATIONAL CITY, SAN YSIDRO HEALTH, and COMMUNITY HOUSINGWORKS (Kimball Highland Master Plan)