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25 - Award of Affordable Housing Funds
Q SEW PART CITY OF z NEWPORT BEACH CItIFOR�`P City Council Staff Report November 24, 2015 Agenda Item No. 25 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Kimberly Brandt, Community Development Director - 949-644-3232, kbrandt@newportbeachca.gov PREPARED BY: Jaime Murillo, Senior Planner PHONE: 949-644-3209 TITLE: Award of Affordable Housing Funds ABSTRACT: Request for the City Council to grant Affordable Housing Funds in the following manner: An agreement with Community Development Partners granting $1,975,000 to assist with the acquisition, rehabilitation and conversion of an existing 12 -unit apartment building located at 6001 Coast Boulevard for affordable housing (Newport Shores Project); 2. An agreement with Habitat for Humanity Orange County (Habitat OC) granting up to $600,000 to establish a critical home repair program for lower-income seniors (Senior Home Repair Program). It is estimated that approximately 30 repair projects will be completed at various locations throughout the City; and 3. Pursue an agreement with Seaview Lutheran Plaza granting approximately $1.6 million to assist with the rehabilitation of an existing 100 -unit apartment building that is affordable to lower-income seniors located at 2800 Pacific View Drive. Improvements would include accessibility upgrades for persons with disabilities, and bathroom and kitchen renovations (Seaview Lutheran Plaza Project). RECOMMENDATION: a) Find the projects to be funded to be categorically exempt pursuant to Title 14 of the California Code of Regulations (Section 15301, Article 19 of Chapter 3, Guidelines for Implementation of the California Environmental Quality Act) under Class 1 (Existing Facilities); 25-1 Award of Affordable Housing Funds November 24, 2015 Page 2 b) Approve and authorize the Mayor and City Clerk to execute the agreement with Community Development Partners and approve Budget Amendment No. 16BA-013, transferring $1,975,000 from the Affordable Housing Reserve Account to fund the Newport Shores Project; c) Approve and authorize the Mayor and City Clerk to execute the agreement with Habitat OC Partners and approve Budget Amendment No. 16BA-013, transferring up to a maximum $600,000 from the Affordable Housing Reserve Account to fund the Senior Home Repair Program; and d) Authorize staff to negotiate an agreement with Seaview Lutheran Plaza for the remaining balance of approximately $1.6 million of the Affordable Housing Fund for the proposed renovations and accessibility improvements. FUNDING REQUIREMENTS: The current balance of the Affordable Housing Reserve Account is approximately $4.2 million and is sufficient to fund the proposals as recommended. DISCUSSION: Background As a result of the City's former Inclusionary Housing Ordinance, the City has collected approximately $4.2 million in the Affordable Housing Fund (Fund). The fees were paid by developers of residential housing in -lieu of providing affordable units. The purpose of the Fund is to construct, rehabilitate, or subsidize affordable housing or assist other governmental entities, private organizations or individuals to provide or preserve affordable housing. To assist with decision making for use of the Fund, Attachment C contains the City's 2014-2021 Housing Plan from the Housing Element of the General Plan, which includes quantified objectives for new construction, rehabilitation, and preservation, and the City's housing goals, policies, and programs. With direction received from the City's Affordable Housing Task Force (AHTF) in 2013, staff contacted owners of existing affordable housing complexes that are at -risk of converting to market -rate housing due to expiration of affordability covenants. This was an attempt to negotiate affordability extensions (preservation goals) in exchange for funds; however, there was a lack of interest on the part of the property owners. 25-2 Award of Affordable Housing Funds November 24, 2015 Page 3 On April 13, 2015, the AHTF recommended the preparation and release of a Request for Proposals (RFP) that would be distributed to developers and housing providers to identify other potential uses for the Fund. Request for Proposals On April 29, 2015, the City published RFP No. 15-55 for use of the Fund toward affordable housing development or programs (Attachment D). The RFP was posted on the City website for public review and distributed to known housing developers and service providers, and persons on the City's Housing Interest list. Potential respondents were also sent a copy of the solicitation through the City's Vendor Database. The RFP submittal deadline ended on June 30, 2015, and the City received six proposals. The RFP, questions and answers, and all proposals are accessible for viewing at http://newportbeachca.gov/affordablehousingfund. Of the six proposals received, one proposal (Meta Housing Corporation) was withdrawn due to loss of site control and one proposal (Shopoff Realty Investments) was disqualified. The remaining four proposals were forwarded to the evaluation panel for review. The following table summarizes each of the proposals. Table 1- Summary of Proposals Proposer Amount Project/ Address Evaluated Further Requested Program Amiran $3.5 million Acquisition and 6001 Newport Yes Construction Loan conversion of 12- Shores Dr. Disqualified by Company unit apartment Evaluation Panel for loss of site control and experience Community $1.5 million Acquisition, 6001 Newport Yes Development Loan rehabilitation, and Shores Dr. Partners/ Mercy conversion of 12 - House Increased unit apartment to (Newport Shores $1,975,000 Project) Habitat for $600,000 Very low-income 30 homeowners Yes Humanity/ Grant senior home repair through City OASIS program (Senior Home Repair Project) 25-3 Award of Affordable Housing Funds November 24, 2015 Page 4 Table 1- Summary of Proposals Proposer Amount Project/ Address Evaluated Further Requested Program Meta Housing $4.2 million Acquisition, 20312 Santa No Corp. /Western Loan rehabilitation, and Ana Ave. Loss of site control Community conversion of 24- and proposer Housing unit apartment withdrew Shopoff Realty $3.6 million Construction of 92 Uptown Newport No Investments/ Grant affordable very low Disqualified The Picerne income units (already has an Group agreement with City) Seaview $2.8 million Accessibility 2800 Pacific Yes Lutheran Plaza Grant improvements and View Dr. $1.6 M in funding remodeling of recommended existing 100 -unit senior apartment (Seaview Lutheran Plaza Project) Evaluation Panel and Evaluation Criteria The evaluation panel consisted of three staff members: Jaime Murillo — Senior Planner, Melinda Whelan — Assistant Planner, and Lauren Whitlinger — Real Property Administrator; and one subject matter expert, Clint Whited — the City's Community Development Block Grant and housing consultant. These panelists were selected based on their experience with housing -related programs and/or real estate and development. The evaluation panel reviewed the four proposals and interviewed each proposer's team to determine how well the RFP's review criteria were met. At the conclusion of the interview, the evaluation panel disqualified the proposal submitted by Amiran Construction Company for not meeting the review criteria, including lack of site control and affordable housing development experience. The evaluation panel found the other three proposals favorable based on prior experience, community benefits, implementation of City housing goals, and project value. Since the total requested funds (approximately $5.4 million) exceeded the current Fund balance of $4.2 million, the evaluation panel recommended prioritizing funding for the Newport Shores Project and the Senior Home Repair Program, with the remaining balance recommended for Seaview Lutheran Plaza. The scoring sheets for each proposal are included as Attachments E, F, and G. The following tables summarize the three recommended proposals. 25-4 Award of Affordable Housing Funds November 24, 2015 Page 5 Table 2- Community Development Partners/ Mercy House Newport Shores Project Proposal- Acquisition, rehabilitation, and conversion of 12 -unit apartment building Request- $1,975,000 loan (55 -year, 0% interest) Review Criteria- 83.3% Point Achieved Program Highlights Proposal achieves rehabilitation and preservation objectives of Housing Element. Existing units are not well maintained, which has resulted in rents remaining low and affordable. Proposal would restrict rents long-term (preserving affordability) while improving the property to provide a suitable living environment for tenants and enhancement to neighborhood. A scope of proposed improvements and architectural renderings is included as Attachment H. Deferrable, cash flow dependent loan which will use 25 percent of available cash flow for payment of principal and interest beginning 15th year after execution. If there is no cash flow available in a given year, payment is deferred. All amounts owed will be repaid at maturity of the loan in Year 55. Long-term affordability (55 years) due to tax credits. Demonstrated ability to leverage additional funds (i.e. financing and tax credits) on past projects and in submitted proposal for project. Includes deeper levels of affordability, including six extremely low (<30% Area Median Income or AMI)-, five very low- (<50% AMI), and one low-income unit (<60% AMI). Proposal includes supportive services from Mercy House designed to help all residents retain their housing and promote self-sufficiency. Services would include money management, life skills, problem solving, community resources, and referrals. Includes seven set-aside units for veterans with additional services tailored toward veteran's needs. Emphasized weatherization and appliance upgrades for improved efficiency and reduced long-term tenant utility costs. Site is near park, recreational amenities, and major bus route. Implements Housing Element Goals H1, H2, H4, and H5; Housing Policies H1.1, H2.1, H4.1, H4.2, and H 5.1; and Housing Programs 2.1.6, 2.2.4, 4.1.4, and 4.2.2. 25-5 Award of Affordable Housing Funds November 24, 2015 Page 6 Table 3- Habitat for Humanity/OASIS Senior Center Senior Home Repair Program Proposal- Home repair program for very -low income seniors (approximately 30) Request- $600,000 Review Criteria- 86.24% Point Achieved Program Highlights Partnership between Habitat for Humanity and the City of Newport Beach OASIS Senior Center. OASIS will utilize staff's existing resources and familiarity with the City's senior population to identify homeowners in need of assistance. Once identified and qualified by staff, Habitat OC will implement the needed improvements. The proposal combines the strengths of each group into a program that can efficiently and successfully serve the City's senior population. Targets very low income seniors (<50% AMI) in need of the following types of repair: accessibility, safety concerns, health and well-being (toilets, plumbing, roof), and code enforcement. Allows seniors to age in place and remain within the community. Fulfills several Housing Element Goals and Programs related to identifying home owners in need of home repair assistance, rehabilitating deteriorated housing stock, and assisting special housing needs group. With some marketing and developing administrative procedures between Habitat OC and OASIS, this program is ready to proceed. Implements Housing Element Goals H1, H4, and H5; Housing Policies H1.1, H2.1, and H 5.1; and Housing Programs 1.1.1, and 1.1.2. 25-6 Award of Affordable Housing Funds November 24, 2015 Page 7 Table 4- Seaview Lutheran Plaza, Inc. Proposal- Accessibility and renovation improvements to an existing 100 -unit senior affordable apartment building Request- $2.8 million Review Criteria- 72.4% Point Achieved Program Highlights Proposal achieves rehabilitation and preservation objectives of Housing Element. Proposal would restrict rents long-term (preserving affordability) while improving the accessibility of the units for its senior and disabled residents. The renovations will also update the 30 year old interior finishes, fixtures, and appliances with new and durable materials to last the duration of the affordability term. Long-term affordability: The existing housing agreement with the City is set to expire in 2039; however, proposer is willing to extend agreement an additional 30 years until 2069. Emphasized fixture and appliance upgrades for improved energy efficiency (LED lighting) and reduced water usage (low -flow faucets and toilets). Includes deep levels of affordability, including 87 extremely low-, 12 very low-, and one low-income unit. Implements Housing Element Goals H1, H2, H4, and H5; Housing Policies H1.1, H2.1, H4.1, H4.2, and H 5.1; and Housing Programs 2.1.6, 2.2.4, 4.1.1, 4.1.4, and 4.2.2. Affordable Housing Task Force (AHTF) Review and Recommendation The AHTF is a City committee tasked with identifying, evaluating, and implementing affordable housing projects to satisfy community needs and achieve regional housing goals. The committee is comprised of Mayor Selich, Councilmember Peotter, and Councilmember Muldoon. The Newport Shores Project and Senior Home Repair Program proposals were presented to the AHTF on August 11, 2015. The AHTF received presentations by staff and representatives of the two proposals. At the conclusion of the meeting, the Committee agreed with the evaluation panel's recommendations and findings and recommended moving the two proposals forward to City Council for approval and funding. The members also recommended additional funding for the Newport Shore Project ($1.5 million originally requested) to increase the probability of receiving low - 25 -7 Award of Affordable Housing Funds November 24, 2015 Page 8 income housing tax credits, which has been calculated as $1,975,000. Obtaining tax credits is a priority and the Agreement includes that Community Development Partners will submit for the tax credits for a second round if the first round is not successful. If the second round is not successful the Agreement requires the $1,975,000 be refunded to the Affordable Housing Fund or a renegotiation and amendment of the agreement is required. The Seaview Lutheran Plaza project was reviewed by the AHTF on November 4, 2015, at which time the AHTF recommended that the remaining Fund balance of approximately $1.6 million be allocated to Seaview Lutheran Plaza. The AHTF also recommended that at least half be provided as a deferred loan with any remaining provided as a grant. The committee members requested that the staff negotiate the terms of the loan with Seaview Lutheran Plaza and return to a future AHTF meeting to finalize the recommendation. Upon final recommendation from the AHTF, staff will present the draft agreement to the City Council at a future agenda date. ENVIRONMENTAL REVIEW: Staff recommends the City Council find this project exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15301 (Existing Facilities) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3. This exemption allows for the operation, repair, maintenance, permitting, leasing, and minor alterations to an existing structure involving negligible or no expansion of use. Project funding will lead to the renovation and continued use of existing residential dwelling units with no expansion of use. NOTICING: No notice other than posting of the agenda is required for this action. However, a courtesy notice was distributed to all property owners within a 300 -foot radius of the Newport Shores Project site and the Seaview Lutheran Plaza Project site, and the surrounding homeowner's associations, and also e-mailed to the City Housing Interest List. The item also appeared on the agenda for this meeting, which was posted at City Hall and on the City website. This agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). In addition, Community Development Partners has initiated neighborhood outreach for the Newport Shores community to inform them of their proposal as outlined on Page 68 of Attachment E. 25-8 Award of Affordable Housing Funds November 24, 2015 Page 9 ATTACHMENTS: Attachment A — Community Development Partners Affordable Housing Agreement Attachment B — Habitat OC Affordable Housing Agreement Attachment C — 2014-2021 Housing Plan, Goals, Policies, and Programs Attachment D — Request for Proposal No. 15-55 Attachment E — Newport Shores Project Score Sheet and Proposal Attachment F — Habitat OC Senior Home Repair Program Score Sheet and Proposal Attachment G — Seaview Lutheran Plaza Project Score Sheet and Proposal Attachment H — Newport Shores Project Scope of Improvements and Architectural Renderings Attachment I — Budget Amendment 25-9 Attachment A Community Development Partners Affordable Housing Agreement (Newport Shores) 25-10 AFFORDABLE HOUSING AGREEMENT AND JOINT ESCROW INSTRUCTIONS by and between CITY OF NEWPORT BEACH, a California municipal corporation and charter city and COMMUNITY DEVELOPMENT PARTNERS, a California corporation 25-11 TABLE OF CONTENTS Page 1. SUBJECT OF AGREEMENT..........................................................................................1 1.1 Purpose of Agreement............................................................................... l 1.2 The Site..................................................................................................... l 1.3 Parties to the Agreement...........................................................................2 2.1.1 1.3.1 The City.................................................................................................... 2 Cost of Development..............................................................................18 1.3.2 The Developer...........................................................................................2 1.4 Definitions................................................................................................. 2 1.5 Prohibition Against Change in Ownership, Management and Control of . 2.1.3 Developer and Prohibition Against Transfer of the Site ...........................6 1.6 Representations by the Developer............................................................ 7 1.7 Representations by the City...................................................................... 8 2. FINANCING...................................................................................................................10 2.1 Scope of Development............................................................................18 Developer's Financing Plan....................................................................10 3.2 Changes to Scope of Development.........................................................18 2.1.1 Funding of City Loan..............................................................................10 Cost of Development..............................................................................18 2.1.2 City Acquisition Assistance....................................................................10 3.5 2.1.3 Other Developer Financing for the Project.............................................10 3.6 Indemnity................................................................................................19 2.1.4 Project Budget; Project Pro Forma......................................................... 11 2.1.5 Developer Submittals.............................................................................. 11 2.2 Local, State and Federal Laws................................................................ City's Disbursement of City Acquisition Assistance..............................12 3.10 Taxes and Assessments...........................................................................21 2.2.1 City Acquisition Assistance Funding Conditions and Escrow Right of the City to Satisfy Other Liens on the Site After Title Passes.. 21 3.12 Instructions..............................................................................................12 23 3.13 2.2.2 Waiver.....................................................................................................12 3.14 Notice of Default to Mortgage, Deed of Trust or Other Security Interest 2.2.3 Failure of Conditions Precedent; Termination........................................17 23 2.3 Title Insurance........................................................................................18 2.4 Subordination..........................................................................................18 3. DEVELOPMENT OF THE SITE...................................................................................18 3.1 Scope of Development............................................................................18 3.2 Changes to Scope of Development.........................................................18 3.3 Cost of Development..............................................................................18 3.4 Tenancy During Development and Relocation Costs ............................19 3.5 Construction Contract; Construction Schedule.......................................19 3.6 Indemnity................................................................................................19 3.7 City and Other Governmental Agency Permits......................................19 3.8 Rights of Access.....................................................................................19 3.9 Local, State and Federal Laws................................................................ 20 3.10 Taxes and Assessments...........................................................................21 3.11 Right of the City to Satisfy Other Liens on the Site After Title Passes.. 21 3.12 Limitation on Encumbrances.................................................................. 23 3.13 Holder Not Obligated to Construct Improvements ................................. 23 3.14 Notice of Default to Mortgage, Deed of Trust or Other Security Interest Holders; Right to Cure............................................................................ 23 882/036753-0123 2765748.6 all/16/15 —1- 25-12 Page 3.15 Failure of Holder to Complete Improvements........................................24 3.16 Right of City to Cure Mortgage, Deed of Trust or Other Security Interest Default..................................................................................................... 24 3.17 Hazardous Materials...............................................................................24 3.17.1 Indemnity.................................................................................... 24 3.17.2 Definitions...................................................................................25 3.18 Materiality............................................................................................... 25 4. USE OF THE SITE.........................................................................................................26 4.1 Affordable Housing................................................................................26 4.2 Uses In Accordance with City Regulatory Agreement ...........................26 4.3 Nondiscrimination...................................................................................26 4.4 Effect of Violation of the Terms and Provisions of this Agreement ......27 4.5 Maintenance of the Site..........................................................................28 5. DEFAULTS AND REMEDIES.....................................................................................28 5.1 Defaults -- General..................................................................................28 5.2 Legal Actions.......................................................................................... 28 6.3 5.2.1 Specific Performance..............................................................................28 31 6.4 5.2.2 Institution of Legal Actions; No Attorney's Fees...................................29 31 6.5 5.2.3 Applicable Law.......................................................................................29 6.6 5.2.4 Acceptance of Service of Process........................................................... 29 5.3 Rights and Remedies Are Cumulative....................................................29 5.4 Inaction Not a Waiver of Default............................................................29 5.5 Termination by the City..........................................................................29 5.6 City's Option to Acquire Plans............................................................... 30 6. GENERAL PROVISIONS.............................................................................................30 6.1 Notices, Demands and Communications Between Parties .....................30 6.2 Conflicts of Interest.................................................................................31 6.3 Enforced Delay; Extension of Times of Performance ............................ 31 6.4 Non -Liability of Officials and Employees of the City ............................ 31 6.5 Interpretation; Entire Agreement, Waivers; Attachments ......................31 6.6 Time of Essence......................................................................................32 6.7 Maintenance of Books and Records.......................................................32 6.8 Right to Inspect.......................................................................................32 6.9 Binding Effect of Agreement..................................................................32 6.10 Severability............................................................................................. 32 6.11 Counterparts............................................................................................ 32 6.12 Amendments to this Agreement..............................................................32 ATTACHMENTS 1 Site Map 2 Legal Description 882/036753-0123 2765748.6 al 1/16/15 -11- 25-13 3 Scope of Development 4 Schedule of Performance 5 City Note 6 City Deed of Trust 7 City Regulatory Agreement and Declaration of Covenants and Restrictions 8 Project Budget 9 Project Pro Forma 10 Notice of Affordability Restrictions on Transfer of Property 11 Real Estate Purchase Agreement dated June 30, 2015 12 Release of Construction Covenants 882/036753-0123 2765748.6 al 1/16/15 —iii— Page 25-14 AFFORDABLE HOUSING AGREEMENT AND JOINT ESCROW INSTRUCTIONS This Affordable Housing Agreement ("Agreement") is entered into as of the day of 2015 ("Agreement Date") by and between CITY OF NEWPORT BEACH, a California municipal corporation and charter city ("City"), and COMMUNITY DEVELOPMENT PARTNERS, a California corporation ("Developer"). City and the Developer, individually referred to herein as a "Party," and collectively referred to herein as the "Parties," hereby agree as follows: 1. SUBJECT OF AGREEMENT 1.1 Purpose of Agreement The purpose of this Agreement is to assist in financing the acquisition of an affordable rental housing development, consisting of not less than twelve (12) residential dwelling units, with all of such units restricted for rental and occupancy by "Eligible Tenants" at an "Affordable Rent" (as those terms are hereinafter defined) for a term of fifty five (55) years (the "Project") by the Developer with a loan in an amount of up to One Million Nine Hundred Seventy Five Thousand and 001100 Dollars ($1,975,000.00) from the City's Affordable Housing Fund. As used herein, the term "Unit" refers to an individual dwelling unit of the twelve (12) rental dwelling units, and the term "Units" refers to all of the twelve (12) rental dwelling units. The Units are subject to the "City Regulatory Agreement" (as that term is hereinafter defined and attached hereto and incorporated herein by reference as Attachment No. 7). The acquisition of the Project by Developer and the occupancy of the affordable rental housing project by Eligible Tenants, all as provided in this Agreement, are in the vital and best interests of the City and the health, safety, and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws and requirements under which the Project has been undertaken, including, but not limited to, California Constitution Article 34. 1.2 The Site The site is located at 6001 Coast Boulevard, in the City of Newport Beach, County of Orange, State of California ("Site" or "Property"). The Site is owned in fee by Danny P. Foley and Athena M. Foley, Trustees of the Danny and Athena Foley Family Trust dated July 12, 2007, as to an undivided fifty percent (50%) interest and Paul Stephen Foley and Kathy Foley, Trustees of the PS and KA Foley Trust dated October 1, 2010 (collectively, the "Site Owner") and consists of approximately seven thousand forty-four square feet (7,044 sf or 0.16 acres) of land area. The Site (identified as APN 045-114-15) is depicted on the Site Map, attached hereto and incorporated herein by reference as Attachment No. 1. The legal description of the Site is provided on Attachment No. 2, attached hereto and incorporated herein by this reference. Developer and Site Owner have entered into that certain Real Estate Purchase Agreement dated June 30, 2015, as amended, attached hereto and incorporated herein by reference as Attachment No. 11 ("Purchase Agreement"), pursuant to which the Site Owner has agreed to sell the Site to Developer. Escrow has opened pursuant to the Purchase Agreement ("Purchase Agreement Escrow") and is scheduled to close not later than December 31, 2015, which is after 882/036753-0123 2765748.6 al 1/16/15 —1- 25-15 the date the Parties entered into this Agreement. Any and all amendments to the Purchase Agreement now existing or existing in the future shall be incorporated into this Agreement by reference, and upon written request to and approval by City, which shall not be unreasonably withheld, City agrees to amend this Agreement to reflect any such amendment to the Purchase Agreement that extends the time to close escrow. 1.3 Parties to the Agreement 1.3.1 The City City is the City of Newport Beach, a California municipal corporation and charter city. The principal office and mailing address of the City is located at 100 Civic Center Drive, P.O. Box: 1768, Newport Beach, California 92660, or such other address as City shall hereafter designate in writing to Developer. 1.3.2 The Developer Developer is Community Development Partners, a California corporation. The principal office and mailing address of the Developer for purposes of this Agreement is 3416 Via Oporto, Suite 301, Newport Beach, California 92663, or such other address as Developer shall hereafter designate in writing to City. By executing this Agreement, each person signing on behalf of the Developer warrants and represents to the City that Developer has the full power and authority to enter into this Agreement, that all authorizations required to make this Agreement binding upon the Developer have been obtained, and that the person or persons executing this Agreement on behalf of the Developer are fully authorized to do so. Whenever the term "Developer" is used in this Agreement, such term shall include any and all nominees, assignees, or successors in interest as herein provided. 1.4 Definitions "Acquisition Lender" shall mean the lender of the Acquisition Loan. "Acquisition Loan" shall mean a loan obtained by Developer to pay a portion of the costs of acquisition of the Site not paid by the City Acquisition Assistance. "Affordable Rent" to be charged by Developer and paid by Eligible Tenants shall mean the Federal Low Income Housing Tax Credit gross monthly rent comprised of the sum of the tenant paid monthly rent, monthly utility allowance and other monthly non -optional charges that does not exceed the maximum rents as established and published by the California Tax Credit Allocation Committee for each respective approved income level in accordance with the Affordability Matrix. "Agreement Date" shall mean the later of the dates this Agreement is executed on behalf of City and Developer. 882/036753-0123 2765748.6 al 1/16/15 —2- 25-16 "AMI" shall mean the median family income (adjusted for family size) for the Orange County area established by the U.S. Department of Housing and Urban Development ("HUD"). "City Acquisition Assistance" shall mean the financial assistance to be provided by City to Developer in the amount set forth in Section 2.1.2, to be used by Developer to purchase the Site. "City Acquisition Assistance Funding Conditions" shall have the meaning ascribed in Section 2.2.1. "City Deed of Trust" shall mean that certain Deed of Trust with Assignment of Rents to secure the City Note and Developer's performance of its obligations under this Agreement and the City Regulatory Agreement, substantially in the form attached hereto and incorporated herein as Attachment No. 6. "City Loan" shall mean the City Acquisition Assistance. "City Manager" shall mean the individual duly appointed to the position of City Manager of the City, or his or her authorized designee. Whenever an administrative action is required by City to implement the terms of this Agreement, the City Manager, or his or her authorized designee, shall have authority to act on behalf of City, except with respect to matters reserved for City Council determination. "City Note" shall mean that certain promissory note, substantially in the form attached hereto and incorporated herein as Attachment No. 5, in favor of City, evidencing the City Loan. "City Regulatory Agreement" shall mean that certain Regulatory Agreement and Declaration of Covenants and Restrictions, substantially in the form attached hereto and incorporated herein as Attachment No. 7. "City Title Policy" shall have the meaning ascribed in Section 2.3 hereof. "Construction Lender" shall mean the first trust deed lender during the construction period (e.g., until the Conversion Date). The Construction Lender may or may not also be the Take -Out Lender. "Construction Loan" shall mean the proceeds of a loan made to finance the Project through the construction period (e.g., until the Conversion Date). "Conversion Date" shall mean the date on which the Take Out Loan has been fully funded and the Construction Loan has been repaid. "CTCAC" shall mean the California Tax Credit Allocation Committee. "Days" shall mean calendar days and the statement of any time period herein shall be calendar days, and not business days, unless otherwise specified. 882/036753-0123 2765748.6 al 1/16/15 —3- 25-17 "Eligible Tenant" shall mean a household shall mean a household whose annual income does not exceed the thirty percent (30%), forty percent (40%) fifty percent (50%) or sixty percent (60%) of the AMI level designated for the Unit to be occupied. "Escrow" shall mean Escrow No. , opened with the Escrow Agent. "Escrow Agent" shall mean Joy Eaton, in Irvine, California. "Escrow Holder" shall mean Lawyers Title in Irvine, California. "Funding Closing Date" shall mean the date on which each of the following occurs (i) Developer closes on the Construction Loan; and (ii) Developer receives its first contribution of Tax Credit equity from the Qualified Tax Credit Investor. "Hazardous Materials" shall have the meaning ascribed in Section 3.16.2 hereof. "Notice of Affordability Restrictions" shall mean the Notice of Affordability Restrictions on Transfer of Property substantially in the form attached hereto and incorporated herein as Attachment No. 10, which is required to be recorded against the Site concurrently with the funding of the City Acquisition Assistance. "Outside Funding Closing Date" shall mean the date that is one hundred eighty (180) days after the first date on which Developer has received an allocation of nine percent (9%) Tax Credits from CTCAC. "Outside Site Closing Date" shall mean December 31, 2015. "Project" shall have the meaning ascribed in Section 1.1 hereof. "Project Budget" shall mean that certain budget referred to in Section 2.1.4 of this Agreement and attached hereto as Attachment No. 8 which is incorporated herein by this reference. "Project Pro Forma" shall mean the financial information referred to in Section 2.1.4 of this Agreement and attached hereto and incorporated herein as Attachment No. 9 and is Developer's best estimate of the costs of ongoing operations based on the information available to Developer as of the Agreement Date. "Purchase Agreement" shall have the meaning ascribed in Section 1.2 hereof. "Qualified Tax Credit Investor" shall mean any entity or entities experienced in investing in projects financed with Tax Credits which acquires an ownership interest in the Project and has the right to receive Tax Credits. "Release of Construction Covenants" shall mean that certain Release of Construction Covenants, in the form attached hereto and incorporated herein as Attachment No. 12. 882/036753-0123 2765748.6 al 1/16/15 -4- 25-18 "Released/Indemnified Parties" shall mean City, its City Council, boards, committees and commissions, officers, agents, volunteers and employees. "Restricted Unit Matrix" means that certain affordability matrix attached to the City Regulatory Agreement and incorporated herein as Exhibit "C". This matrix requires the 12 one - bedroom units at the project site to be the following: 6 units at 30% AMI, 2 units at 40% AMI, 3 units at 50% AMI, and 1 unit at 60%. "Schedule of Performance" shall mean that certain Schedule attached hereto and incorporated herein as Attachment No. 4. "Scope of Development" shall mean that certain scope of development attached hereto and incorporated herein as Attachment No. 3. "Site" shall have the meaning ascribed in Section 1.2 hereof. "Site Closing Date" shall mean the date on which each of the following occurs: (i) the Escrow closes; (ii) Developer or an affiliate of the Developer obtains fee title to the Site; and (iii) the City Deed of Trust and the City Regulatory Agreement are recorded. "Site Owner" shall have the meaning ascribed in Section 1.2 hereof. "Take -Out Lender" shall mean the institution that holds a first deed of trust securing a loan made to finance the Project after the construction period (e.g., from and after the Conversion Date). The Take -Out Lender may or may not also be the Construction Lender. "Take -Out Loan" shall mean the loan made by the Take -Out Lender. "Tax Credit Program" shall mean the low-income housing tax credit program authorized pursuant to Internal Revenue Code Section 42, California Health and Safety Code Sections 50199.4-50199.22, California Revenue and Taxation Code Sections 12205, 12206, 17057.5, 17058, 23610.4, and 23610.5, and applicable federal and State regulations. "Tax Credits" shall mean the low income housing tax credits granted by CTCAC for the Project pursuant to the Tax Credit Program. "Tax Credit Regulatory Agreement" shall mean that certain regulatory agreement to be recorded against the Site as a condition of the receipt by the Project of an allocation by CTCAC of nine percent (9%) Tax Credits. "Title Company" shall mean Lawyers Title Company. "Unit" and "Units" shall have the meaning ascribed in Section 1.1 hereof. 882/036753-0123 2765748.6 all/16/15 -5- 25-19 1.5 Prohibition Against Change in Ownership, Management and Control of Developer and Prohibition Against Transfer of the Site The qualifications and identity of the Developer are of particular interest to the City. It is because of these qualifications and identity that the City has entered into this Agreement with the Developer. Consequently, no person, whether a voluntary or involuntary successor of Developer, shall acquire any rights or powers under this Agreement nor shall the Developer assign all or any part of this Agreement, the Site, or the City Regulatory Agreement without the prior written approval of the City. A voluntary or involuntary sale or transfer of a controlling interest in the Developer or the Site during the term of this Agreement shall be deemed to constitute an assignment or transfer for the purposes of this Section 1.5, and the written approval of the City shall be required prior to effecting such an assignment or transfer. Any purported transfer, voluntarily or by operation of law, except with the prior written consent of the City, shall render this Agreement absolutely null and void and shall confer no rights whatsoever upon any purported assignee or transferee. During the term of this Agreement and the City Regulatory Agreement the Developer shall not, except as permitted by this Agreement, assign or attempt to assign this Agreement or any rights or duties herein, nor make any total or partial sale, transfer, conveyance, or assignment of the whole or any part of the Site or any of the improvements thereon, without the prior written approval of the City. Notwithstanding any other provision of this Agreement to the contrary, City approval of an assignment of this Agreement or transfer of the Site, or any interest therein, shall not be required in connection with: (a) the conveyance or dedication of any portion of the Site to the City, or other appropriate governmental agency, including public utilities, where the granting of such conveyance or easement permits or facilitates the development of the Project on the Site; or (b) the transfer of all or any part of the Project or Site to an entity owned and controlled by Developer or the principals of Developer, including, without limitation, transfer to a limited partnership in which Developer, or an affiliate of Developer, is a general partner; (c) any mortgage, deed of trust, sale and leaseback, or other form of conveyance required for any reasonable method of financing or refinancing the development of the Project on the Site that is contemplated in the Project Budget or has otherwise been approved in writing by the City Manager, including all direct and indirect costs related thereto; (d) transfers resulting from the death or mental or physical incapacity of an individual; (e) transfers in trust for the benefit of a spouse, children, grandchildren, or other family member, or for charitable purposes; (f) transfers of less than controlling interest shares of stock in a publicly -held corporation or of the beneficial interest in any publicly -held partnership or real estate investment trust; (g) the admission of the Qualified Tax Credit Investor as a limited partner to a limited partnership in which Developer is a general partner and to which all or any part of the Project or Site has been transferred pursuant to Section (b) hereof, (h) the transfer by the Qualified Tax Credit Investor to an entity that is an affiliate of the Qualified Tax Credit Investor; and (i) the removal by the Qualified Tax Credit Investor of the general partner for a default under the partnership agreement, provided the replacement general partner is reasonably satisfactory to City. Notwithstanding anything in this Section 1.5 to the contrary, any transfer or assignment by Developer or any successor in interest to Developer not requiring the approval by City shall be effective when made but shall not be deemed to relieve Developer or any successor party from its obligations under this Agreement unless and until the transferor and transferee execute 882/036753-0123 2765748.6 al 1/16/15 -6- 25-20 and deliver to City an assignment and assumption agreement. Any transfer or assignment by Developer or any successor in interest to Developer requiring the approval by City pursuant to this Section 1.5 shall be effective and shall be deemed to relieve Developer or any successor party from its obligations under this Agreement only upon execution and delivery to the City by the transferor and transferee of an assignment and assumption agreement in a form and with content reasonably acceptable to City, and upon execution of an acknowledgment of same by City. This Section 1.5 shall not be applicable to the leasing of individual Units to Eligible Tenants in accordance with this Agreement and the City Regulatory Agreement, and no assignment and assumption agreement shall be required in connection therewith. 1.6 Representations by the Developer The Developer represents and warrants to the City as follows: (a) The Developer is duly established and in good standing under the laws of the State of California and has duly authorized, executed and delivered this Agreement and any and all other agreements and documents required to be executed and delivered by the Developer in order to carry out, give effect to, and consummate the transactions contemplated by this Agreement. This Agreement is enforceable against the Developer in accordance with its terms. The parties who have executed this Agreement on behalf of Developer are authorized to bind Developer by their signatures hereto. (b) The Developer does not have any contingent obligations or contractual agreements which will adversely affect the ability of the Developer to carry out its obligations hereunder. (c) There are no pending or, so far as is known to the Developer, threatened, legal proceedings to which the Developer is or may be made a party to or to which it or any of its property including, without limitation, the Site, is or may become subject, which have not been fully disclosed in the material submitted to the City, which will adversely affect the ability of the Developer to carry out its obligations hereunder. (d) There is no action or proceeding pending or, to the Developer's best knowledge, threatened, looking toward the dissolution or liquidation of the Developer and there is no action or proceeding pending or, to the Developer's best knowledge, threatened by or against the Developer which could affect the validity and enforceability of the terms of this Agreement, or adversely affect the ability of the Developer to carry out its obligations hereunder. (e) Developer is not the subject of a bankruptcy proceeding. (f) The execution and delivery of this Agreement and all other documents to be executed by Developer pursuant to this Agreement will not constitute or result in any default or event that with notice or the lapse of time, or both, would be a default, breach, or violation of any other agreement, instrument, or arrangement by which Developer is bound. 882/036753-0123 2765748.6 al 1/16/15 —7- 25-21 (g) The execution and delivery of this Agreement and all other documents to be executed by Developer pursuant to this Agreement and the consummation of the transactions contemplated herein will not violate any provision of or require any consent, authorization, or approval under any law or administrative regulation or any other order, award, judgment, writ, injunction or decree applicable to, or any governmental permit or license issued to Developer. (h) No representation, warranty, or covenant of Developer in this Agreement, or in any document or certificate furnished or to be furnished to City pursuant to this Agreement, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading. (i) All financial information delivered to City, including, without limitation, information relating to the financial condition of Developer, the Site, and the Project accurately represents such financial condition and has been prepared in accordance with accepted accounting principles consistently applied, unless otherwise noted in such information. Developer shall notify City in writing within ten (10) calendar days of any materially adverse changes to such information delivered to the City. 0) The Developer has, and will as required by its obligations hereunder, dedicate, allocate and otherwise make available, sufficient financial and other resources to perform its obligations under this Agreement. (k) ' To Developer's knowledge, except as disclosed, in writing, to City, no Hazardous Materials (as defined in Section 3.16.2 below) are now or have been released, used, or stored on or within any portion of the Site in violation of applicable laws or regulations governing the release, use, or storage of Hazardous Materials, and there has not been any federal, state, or local enforcement, clean-up, removal, remedial, or other governmental or regulatory actions instituted or completed affecting the Site. (1) Developer shall ensure a qualified operator is in place to operate the Project consistent with this Agreement, the Regulatory Agreement and Declaration of Covenants and Restrictions attached hereto. (m) Developer, for the term of this Agreement, shall procure and keep in full force and effect or cause to be procured and kept in full force and effect for the mutual benefit of Developer and City, insurance policies reasonably determined by City and commensurate with industry standards for the area. Each of the foregoing items (a) to (m), inclusive, shall be deemed to be an ongoing representation and warranty continuing through the term of this Agreement. The Developer shall advise the City in writing at the locations prescribed for notice in Section 1.3, if there is any change pertaining to any matters set forth or referenced in the foregoing items (a) to (m), inclusive. 1.7 Representations by the City City represents and warrants to Developer as follows: 882/036753-0123 2765748.6 al 1/16/15 25-22 (a) City is a California municipal corporation and charter city. The execution, performance, and delivery of this Agreement by City has been fully authorized by all requisite actions on the part of City. The parties who have executed this Agreement on behalf of City are authorized to bind City by their signatures hereto. (b) City does not, as far as is known to City, have any contingent obligations or contractual agreements which will adversely affect the ability of City to carry out its obligations hereunder. (c) There are no pending or, so far as is known to City, threatened, legal proceedings to which City is or may be made a party or to which it or any of its property is or may become subject, which will adversely affect the ability of City to carry out its obligations hereunder. (d) There is no action or proceeding pending or, to City's knowledge, threatened, looking toward the dissolution or liquidation of City and there is no action or proceeding pending or, to City's knowledge, threatened by or against City which could affect the validity and enforceability of the terms of this Agreement, or adversely affect the ability of City to carry out its obligations hereunder. (e) City is not the subject of a bankruptcy proceeding. (f) To City's knowledge, the execution and delivery of this Agreement and all other documents to be executed by City pursuant to this Agreement will not constitute or result in any default or event that with notice or the lapse of time, or both, would be a default, breach, or violation of any other agreement, instrument, or arrangement by which City is bound. (g) To City's knowledge, the execution and delivery of this Agreement and all other documents to be executed by City pursuant to this Agreement and the consummation of the transactions contemplated herein will not violate any provision of or require any consent, authorization, or approval under any law or administrative regulation or any other order, award, judgment, writ, injunction or decree applicable to, or any governmental permit or license issued to City. (h) To City's knowledge, no representation, warranty, or covenant of City in this Agreement, or in any document or certificate furnished or to be furnished to Developer pursuant to this Agreement, contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary to make the statements contained herein or therein not misleading. As used in this Section 1.7, the term "knowledge" or "known" shall mean the actual (not constructive or imputed) knowledge of the City Manager, without any investigation or inquiry or duty of investigation or inquiry. 882/036753-0123 2765748.6 al 1/16/15 -9- 25-23 2. FINANCING 2.1 Developer's Financing Plan Developer intends to finance the development of the Project with a combination of funds from the proceeds of the following: (i) the City Loan; (ii) the Acquisition Loan; (iii) Nine Percent (9%) Tax Credits; (iv) the Construction Loan; (v) The Take -Out Loan; (vi) Affordable Housing Program (AHP) Funds from the Federal Home Loan Bank; (vii) Welfare Property Tax Exemption (if eligible); (viii) Veteran Affairs Supportive Housing (VASH) vouchers; and (ix) such other financing sources as may be obtained by Developer in accordance with the terms and conditions of this Agreement. Developer shall utilize all of such funding exclusively for development of the Project on the Site, and not for any other purpose. Developer shall notify the City in writing in the event of any change or modification to the sources of Developer's financing as set forth in this Section 2.1. 2.1.1 Fundingof f City Loan The City Loan shall be disbursed to the Developer through the Escrow pursuant to Section 2.2 below. Within five (5) business days after the Agreement Date the City shall deposit the full amount of the City Acquisition Assistance into the Escrow. 2.1.2 City Acquisition Assistance City shall provide Developer with financial assistance, in the maximum principal amount of One Million Nine Hundred Seventy Five Thousand and 001100 Dollars ($1,975,000.00) to assist Developer with Developer's acquisition costs for the Site ("City Acquisition Assistance"). The City Acquisition Assistance shall be disbursed in accordance with the provisions of Section 2.2.1 below and the escrow instructions outlined in Section 2.2.2. Repayment of the City Acquisition Assistance shall be in accordance with the terms of the City Note. Developer acknowledges that the City Acquisition Assistance is an amount that in combination with the Acquisition Loan will cover the Developer's acquisition costs for the Site. 2.1.3 Other Developer Financing for the Project a. Application to CTCAC. Developer shall prepare and submit a complete application to CTCAC (California Tax Credit Allocation Committee) for an allocation of Nine Percent (9%) Tax Credits at the first opportunity following the Agreement Date. Developer agrees to promptly submit to City all of the following documents at such time as the same are submitted by Developer to CTCAC or other applicable body or when such documents are received by Developer, as applicable (any documents submitted prior to the Agreement Date shall also have been submitted by Developer to City prior to the Agreement Date): 882/036753-0123 2765748.6 a11/16/15 i) A true and correct copy of the preliminary reservation letter from CTCAC. -10- 25-24 ii) A complete copy of the regulatory agreement between CTCAC and Developer. In addition to the foregoing sources of funding for the Project, Developer, in consultation with the City, shall diligently seek other sources of funding that are or may be available to help fund the Project. b. Failure to obtain Nine Percent (9%) Tax Credits. Developer and City acknowledge that the application process for Nine Percent (9%) Tax Credits is highly competitive and there is no guarantee that Developer shall receive an allocation of Tax Credits. Developer agrees to use best efforts to obtain an allocation of Nine Percent (9%) Tax Credits for so long as is commercially reasonable to do so but shall under any circumstances apply at the first two (2) opportunities following the Agreement Date (unless Developer successfully receives an allocation during its first opportunity following the Agreement Date and in such event shall have no reason to apply during the second opportunity). C. Alternative Financing. In the event that Developer is unsuccessful in obtaining an allocation of Nine Percent (9%) Tax Credits after submitting a minimum of two (2) applications, City agrees to work in good faith with Developer to identify and procure alternative financing to implement the Scope of Development, attached hereto as Attachment No. 3. The failure by the Developer to obtain an allocation of Nine Percent (9%) Tax Credits or alternative funding within the time periods described herein shall not be a default under this Agreement or any other document related hereto, but shall require the parties to renegotiate the terms of this Agreement within a reasonable time period mutually agreeable to the Parties, but in no event less than 90 days. If the Parties are unable to agree during such renegotiation to terms for amending this Agreement, Developer shall have a reasonable period of time to market and sell the Project and Developer shall pay to City from the proceeds of said sale the lesser of said proceeds or the amount of the City Acquisition Assistance then outstanding. Sale price to be agreed upon between City and Developer and based upon a real property appraisal. 2.1.4 Project Budget;_ Project Pro Forma The anticipated sources and uses of funds for the development of the Project are set forth in the Project Budget, which is attached hereto and incorporated by reference (Attachment No. 8). The financial projections for the Project are set forth in the Project Pro Forma, which is attached hereto and incorporated by reference (Attachment No. 9). Developer and City acknowledge that the Project Budget and Project Pro Forma are estimates as of the Agreement Date and are subject to change based on changes in costs, AMI, TCAC regulations governing allocations of Nine Percent (9%) Tax Credits and other such matters related to the development of the Project. Developer shall submit updated Project Budget and Project Pro Forma upon request from City. 2.1.5 Developer Submittals Promptly upon Developer's receipt of a notification of an award of any of the financing described in the Project Budget, Developer shall notify the City Manager, or its designee, in writing. 882/036753-0123 2765748.6 al 1/16/15 -11- 25-25 2.2 City's Disbursement of City Acquisition Assistance and Escrow Instructions 2.2.1 City Acquisition Assistance Funding Conditions The City Acquisition Assistance shall be disbursed through the Escrow. Within five (5) business days after the Agreement Date, subject to City and Escrow Agent executing escrow instructions consistent with the requirements of Section 2.2.2, City shall deposit the City Acquisition Assistance into the Escrow. City's obligation to instruct the Escrow Agent to disburse to the Site Owner all or a portion of the City Acquisition Assistance shall be conditional and contingent upon the satisfaction, or waiver by the City in its reasonable discretion, of each and all of the following conditions (collectively, "City Acquisition Assistance Funding Conditions"): a. All conditions precedent to "Closing" under the Purchase Agreement (attached hereto as Attachment No. 11) shall have been satisfied, or waived by the appropriate Party, and on or before the Outside Site Closing Date, the Escrow shall have closed or be closing concurrently with disbursement of the City Acquisition Assistance; b. Developer shall have delivered to City or the Title Company the City Deed of Trust, and the City Regulatory Agreement and Declaration of Covenants and Restrictions, both duly executed and acknowledged by Developer for recordation by the Title Company and the Title Company shall have recorded, or shall record, concurrently with the disbursement of the City Acquisition Assistance, each of the same; C. Developer shall have executed and delivered to City the City Note; d. The Title Company shall be irrevocably committed to issue the City Title Policy on the date Escrow Agent disburses the City Acquisition Assistance; and Agreement. e. Developer is not in material default of any term or condition of this 2.2.2 Escrow Instructions a. Payment toward Purchase Price. Not later than five (5) business days following the opening of escrow, City shall deposit in Escrow in good funds, the sum of ONE HUNDRED THOUSAND DOLLARS ($100,000.00) (the "Deposit"), which Deposit shall be applicable to the Purchase Price as defined in the Purchase Agreement upon the closing of escrow. "Good funds" shall mean a wire transfer of funds, cashier's or certified check drawn on or issued by the offices of a financial institution located in the State of California, or cash. In the event the Purchase Agreement is terminated by Site Owner on or before the expiration of the Due Diligence Period, (defined as commencing upon the Opening of Escrow and continuing thereafter for forty-five (45) days), or Developer disapproves of any of the items requiring approval of Developer hereunder on or before the expiration of the Due Diligence Period, the Deposit shall be promptly returned to City. Developer shall have the unqualified and unrestricted right to terminate its obligations under this Agreement on or before the expiration of the Due Diligence Period. 882/036753-0123 2765748.6 a 11/16/15 —12- 25-26 i) On or before the Closing Date as defined in the Purchase Agreement, City shall deposit the balance of the City Acquisition Assistance, subject to any other credits or debits hereunder, with Escrow Holder in Good Funds. b. Opening of Escrow. Within five (5) business days after the execution of this Agreement by City, the parties shall open an escrow ("Escrow") with the Escrow Holder by causing an executed copy of this Agreement to be deposited with Escrow Holder. Escrow shall be deemed open on the date that City delivers this executed Agreement to Escrow Holder. C. Preliminary Title Report. Following execution of this Agreement but in no event later than five (5) days following opening of Escrow, Developer shall provide City a preliminary title report issued through Lawyer's Title Company (the "Title Company"), describing the state of title of the Property, (the "Preliminary Title Report") together with copies of all exceptions specified therein. City shall notify Developer in writing of any objections City may have to title exceptions or other matters ("Disapproved Exceptions") contained in the Preliminary Title Report within fifteen (15) business days after issuance of the Preliminary Title Report ("City's Objection Notice"). City shall not unreasonably withhold its approval of the Preliminary Title Report. If City fails to deliver City's Objection Notice within said fifteen (15) business day period, City shall be conclusively deemed to have approved the Preliminary Title Report and all matters shown thereon. In the event City delivers City's Objection Notice within said period, Developer shall have a period of ten (10) business days after receipt of City's Objection Notice in which to notify City of Developer's election to agree to attempt to remove the Disapproved Exceptions prior to the Close of Escrow ("Developer's Notice"). Developer shall only elect to decline to remove Disapproved Exceptions which Developer in good faith believes Developer's reasonable efforts would not result in removal or as to which removal would result in cost or expense to Developer other than nominal administrative expense incurred in the process of removal. Developer's failure to deliver Developer's Notice within said ten (10) business day period shall be deemed Developer's election to decline to remove the Disapproved Exceptions. If Developer notifies City of its election to decline to remove the Disapproved Exceptions, if Developer is deemed to have elected to decline to remove the Disapproved Exceptions, or if Developer is unable to remove the Disapproved Exceptions, City may elect either to terminate this Agreement and the Escrow or to accept title to the Property subject to the Disapproved Exception(s). City shall exercise such election by delivery of written notice to Developer and Escrow Holder within ten (10) business days following the earlier of (i) the date of written advise from Developer that such Disapproved Exception(s) cannot be removed; or (ii) the date Developer declines or is deemed to have declined to remove such Disapproved Exception(s). If City fails to deliver said written notice of termination of this Agreement and the Escrow within said ten (10) business day period, City's disapproval of the Disapproved Exception(s) shall be deemed waived and City shall deemed to have agreed to accept a form of lender's title policy on the Property subject to the Disapproved Exception(s). It shall be a condition of the close of escrow, for the benefit of Developer, that Escrow Holder be irrevocably committed, at the close of escrow and, following recording of a deed, to provide the City, at Developer's cost, with a CLTA Standard Coverage Policy of Title Insurance in the amount of the City Acquisition Assistance, subject only to the exceptions 882/036753-0123 2765748.6 al 1/16/15 —13 — 25-27 approved by City pursuant to Section 2.2.2 (c), and the preprinted exceptions and stipulations in said policy (the "Title Policy"). d. Escrow. City and Developer agree to open an escrow in accordance with this Agreement at an escrow company of City's choice within five (5) days of execution of this Agreement by both parties. Section 2.2.2 constitutes the joint escrow instructions of the City and Developer, and Escrow Holder to whom these instructions are delivered is hereby empowered to act under this Agreement. The parties hereto agree to perform all acts reasonably necessary to close this escrow if, as and when required hereby. City agrees to deposit the City Acquisition Assistance in sufficient time to permit the close of escrow to occur in a timely manner. City and Developer agree to deposit with Escrow Holder any additional instruments as may be reasonably necessary to complete this transaction. All funds received in this escrow shall be deposited with other escrow funds in a general escrow account(s) and may be transferred to any other such escrow trust account in any State or National Bank doing business in the State of California. All disbursements shall be made by check from such account; provided, however, that Escrow Holder shall make any disbursement to Site Owner in accordance with the following wire transfer instructions: Bank: Address: Attn: ABA/Routing No.: Benefiting Account Name: Beneficiary Account No.: _ For further credit or reference to: Sale of 6001 Coast Boulevard e. Escrow Holder is Authorized to and shall: i) Pay and deduct from the Purchase Price any amount necessary to satisfy any delinquent taxes together with penalties and interest thereon, and/or delinquent or nondelinquent assessments or bonds except those which title is to be taken subject to in accordance with the terms of this Agreement; ii) Pay and deduct from the Purchase Price set forth, up to and including the total amount of unpaid principal and interest on note(s) secured by mortgage(s) or deed(s) of trust, if any, and all other amounts due and payable in accordance with terms and conditions of said trust deed(s) or mortgage(s) including late charges, if any except penalty (if any), for payment in full in advance of maturity, shall, upon demand(s) be made payable to the mortgagee(s) or beneficiary(ies) entitled there under; iii) Pay and charge Developer for all recording fees incurred in this transaction including payment of reconveyance fees and forwarding fees for partial or full reconveyances of deeds of trust or release or mortgage by Developer; 882/036753-0123 2765748.6 a I 1/ 16/15 -14- 25-28 iv) Pay and charge Developer for any escrow fees, charges, and costs payable under this Section 2.2.2 (e) of this Agreement; v) Prorate, as between Developer and Site Owner, real estate taxes through the close of escrow and rent under Residential Income Property Purchase Agreement and Joint Escrow Instructions, dated June 30, 2015,through the close of escrow, with Developer to be charged with and have the benefit of the day of the close of escrow; vi) Disburse funds in accordance with this Agreement, record the Deed and City Regulatory Agreement and Declaration of Covenants and Restrictions in the Official Records of the County Recorder of Orange County, California, and immediately following such recordation, and immediately provide recorded documents to City when conditions of this escrow have been fulfilled by Developer and Site Owner; vii) The term "close of escrow," if and where written in these instructions, shall mean the date necessary instruments of conveyance are recorded in the Official Records office of the County Recorder of Orange County, California, and all funds have been disbursed to Site Owner in accordance with this Agreement. Recordation of instruments delivered through this escrow is authorized if necessary or proper in the issuance of the Title Policy; viii) All time limits within which any matter herein specified is to be performed may be extended by mutual agreement of the parties hereto. Any amendment of, or supplement to, any instructions must be in writing. f. Close of Escrow. Time is of the essence in these instructions. Subject to satisfaction of the conditions in Section 2.2.1, Escrow is to close on or before December 31, 2015 ("Closing Date"), unless such date is extended by mutual written agreement by both Developer and City. g. Brokers. The Parties represent and warrant that no brokers were used in connection with this transaction under this Agreement. h. Closing Date. Escrow shall close on or before December 31, 2015, ("Closing Date"). The terms "the Close of Escrow", and/or the "Closing" are used herein to mean the time Site Owner's Grant Deed is filed for record by the Escrow Holder in the Office of the County Recorder of Orange County, California. City and Developer each specifically agrees to strictly comply and perform its obligations herein in the time and manner specified and waives any and all rights to claim such compliance by mere substantial compliance with the terms of this Agreement. City and Developer shall have the right, but not the obligation, to extend the Closing Date by mutual written agreement. i. Distribution of Documents. Following Close of Escrow, Escrow Holder shall distribute the documents as follows: i) To Developer: 882/036753-0123 2765748.6 al 1/16/15 -15- 25-29 (1) One certified conformed copy of the Grant Deed, the original to be mailed to Developer following recordation thereof, (2) One duplicate original of the Non -Foreign Affidavit; and (3) One certified copy, conformed if recorded, of any other document delivered to Escrow Holder by City or Developer pursuant to the terms hereof. ii) To City: (1) One certified conformed copy of the Grant Deed, the original to be mailed to Developer following recordation thereof; and (2) One certified copy, conformed if recorded, of any other document delivered to Escrow Holder by City or Developer pursuant to the terms hereof. j. Title Policy to be Issued by City. When Escrow Holder holds for City the Grant Deed in favor of Developer executed and acknowledged by Site Owner covering the Property, Escrow Holder shall cause to be issued and delivered to City and Buyer as of the Closing a ALTA standard coverage policy of title insurance ("Title Policy"), or, upon Developer's request therefore, an ALTA standard coverage policy of title insurance, issued by Title Company, with liability in the amount of the City Acquisition Assistance covering the Property and showing title vested in Developer free of encumbrances, except: i) All nondelinquent general and special real property taxes and assessments for the current fiscal year; ii) Easements, encumbrances, covenants, conditions, restrictions, reservations, rights-of-way and other matters of record, as approved or deemed approved by City pursuant to Section 2.2.2 (h) above; iii) The standard printed exceptions and exclusions contained in the ALTA form policy; and iv) Any exceptions created or consented to by City, including without limitation, any exceptions arising by reason of City's City Acquisition Assistance. k. Escrow Provisions. i) Escrow Instructions. This Agreement, when signed by City and Developer, shall also constitute escrow instructions to Escrow Holder. If required by Escrow Holder, City and Developer agree to execute Escrow Holder's standard escrow instructions, provided that the same are consistent with and do not conflict with the provisions of this Agreement. In the event of any such conflict, the provisions of this Agreement shall prevail. 882/036753-0123 2765748.6 al 1/16/15 -16- 25-30 ii) General Escrow Provisions. Escrow Holder shall deliver the Title Policy to the Developer and instruct the Orange County Recorder to mail the Grant Deed to Developer at the address set forth in Section 1.3 after recordation. All funds received in this Escrow shall be deposited in one or more general escrow accounts of the Escrow Holder with any bank doing business in Orange County, California, and may be disbursed to any other general escrow account or accounts. All disbursements shall be made by Escrow Holder's check. This Agreement and any modifications, amendments, or supplements thereto may be executed in counterparts and shall be valid and binding as if all of the parties' signatures were on one document. iii) Payment of Costs. Developer shall be responsible for payment of all costs, including but not limited to: the Escrow fee, title insurance premiums for that portion of the Title Policy premium which would be incurred for a CLTA form policy, the charge for drawing the Grant Deed, charges for recording the Grant Deed, and that portion of the Title Policy premium which is attributable to the additional cost of obtaining any additional coverage requested by City, including the difference between CLTA and ALTA coverage. All other costs of Escrow not otherwise specifically allocated by this Agreement shall be paid by Developer. This transaction is exempt from payment of documentary transfer taxes. iv) Termination and Cancellation of Escrow. Time is of the essence of this Agreement. Unless otherwise agreed to as provided by Section 2.2.2 (h), if Escrow fails to close by June 30, 2016, as provided above, Escrow shall terminate automatically without further action by Escrow Holder or any party, and Escrow Holder is instructed to return all funds and documents then in Escrow to the respective depositor of the same with Escrow Holder. Cancellation of Escrow, as provided herein, shall be without prejudice to whatever legal rights City or Developer may have against each other arising from the Escrow or this Agreement. 2.2.3 Waiver City may at any time or times, at its election, waive any of the conditions set forth in Section 2.2.1 above to its obligations hereunder, but any such waiver shall be effective only if contained in a writing signed by City and delivered to Developer. 2.2.4 Failure of Conditions Precedent; Termination In the event that by Outside Site Closing Date each of the conditions set forth in Section 2.2.1 is not fulfilled, or waived by City pursuant to Section 2.2.1, City may, at its option, terminate this Agreement, thereby releasing the parties from further obligations hereunder. In the event this Agreement is terminated, all documents and funds delivered by Developer to City or the Title Company shall be returned immediately to Developer and all documents and funds delivered by City to Developer or the Title Company shall be returned immediately to City. Nothing in this Section 2.2.3 shall be construed as releasing any Party from liability for any default of its obligations hereunder or breach of its representations and warranties under this Agreement occurring prior to the termination of this Agreement. 8821036753-0123 2765748.6 al 1/16/15 —1 7- 25-31 2.3 Title Insurance As one of the City Acquisition Assistance Funding Conditions, Developer shall obtain on City's behalf and at the Developer's expense from the Title Company an ALTA lender's policy of title insurance, together with such endorsements as may be reasonably requested by City with liability in the amount of the City Note, covering the Site, showing title vested in Developer, and insuring the validity and priority of, respectively, the City Deed of Trust and the City Regulatory Agreement, and subject only to those Schedule B Exceptions as set forth in the Preliminary Title Report issued by the Title company as its Order No. (the "City Title Policy"). 2.4 Subordination The City agrees to subordinate the City Deed of Trust and City Regulatory Agreement to the deed of trust securing the Acquisition Loan before the close of escrow. City agrees to subordinate the City Deed of Trust and City Regulatory Agreement to the Construction Loan only upon Developer's receipt of approval of Nine Percent (9%) Tax Credits. Such subordination as contemplated in this Section 2.4 shall only take place pursuant to written subordination agreement(s) approved by City's legal counsel (the "Subordination Agreement"). 3. DEVELOPMENT OF THE SITE 3.1 Scope of Development Developer agrees to rehabilitate the existing rental housing development containing twelve (12) apartment dwelling units as set forth in this Agreement and in the Scope of Development. The Developer shall commence and complete the applicable scope of work by the time established therefor in the Schedule of Performance. 3.2 Changes to Scope of Development If the Developer desires to make any changes in the Scope of Development the Developer shall notify the City in writing of such proposed changes. City's prior written consent shall be required for any material changes in the Scope of Development, which consent shall not be unreasonably withheld. If City has not issued a written response to any change to the Scope of Development requested pursuant to this Section 3.2 within fifteen (15) business days of its submission by Developer such change shall be deemed approved. 3.3 Cost of Development With the exception of the City Loan, all costs for acquiring the Site, planning, designing, and rehabilitating the Project shall be borne exclusively by the Developer. The Developer shall also bear all costs related to discharging the duties of the Developer set forth in this Agreement. 882/036753-0123 2765748.6 al 1/16/15 _ 1 g- 25-32 3.4 Tenancy During Development and Relocation Costs Developer shall be responsible for and bear all costs of relocation of Affordable Housing Unit tenants, if necessary. Developer shall not increase the rent charged to any tenant of an Affordable Housing Unit until such time as the Release of Construction Covenants has been issued. 3.5 Construction Contract; Construction Schedule Prior to commencing rehabilitation of the Project, Developer shall provide to City a copy of a fee-based construction contract or guaranteed maximum price construction contract between Developer and its general contractor for all of the improvements required to be constructed by Developer hereunder, certified by Developer to be a true and correct copy thereof. The Developer shall obtain building permits, if applicable, and commence and complete rehabilitation of the Project by the respective times established therefor in the Schedule of Performance. 3.6 Indemnity The Developer shall indemnify, defend, and hold harmless the Released/Indemnified Parties from and against any and all claims or suits for, and damages to, property and injuries to persons, including death resulting from defects, obstructions or from any cause arising from Developer's Work on the Project, or the Work of any subcontractor or supplier performing work on the Project, demands, obligations, damages, actions, causes of action, losses, judgments, fines, penalties, liabilities, costs and expenses (including expert witness fees, attorney's fees, disbursements, and costs), which may arise under this Agreement or in any manner relate (directly or indirectly) to the negligence, recklessness, or misconduct of the Developer or its principals, officers, agents, employees, volunteers, vendors, suppliers, subconsultants, subcontractors, anyone employed directly or indirectly by any of them or for whose acts they may be liable, or any or all of them. 3.7 City and Other Governmental Agency Permits Before commencement of rehabilitation of the Project the Developer shall, at its own expense, secure or cause to be secured any and all permits which may be required by the City or any other governmental agent affected by such rehabilitation. If required, Developer shall obtain a City business license during the term of this Agreement. 3.8 Rights of Access For purposes of assuring compliance with this Agreement, representatives of the City shall have the right of access to the Site without charges or fees, upon twenty-four (24) hour notice to Developer during the period of this Agreement for the purposes of ensuring compliance with this Agreement, including, but not limited to, the inspection of the work being performed in rehabilitating the Project, so long as they comply with all safety rules. Such representatives of the City shall be those who are so identified in writing by the City Manager. Developer and Developer entities shall be responsible for any bodily injury or related damages and indemnify 882/036753-0123 2765748.6 al 1/16/15 -19- 25-33 the City for all claims or suits for, and damages to, property and injuries to persons, including accidental death (including expert witness fees, attorney's fees, and costs) arising out of the activities of the City as referred to in this Section 3.7. 3.9 Local, State and Federal Laws Developer shall carry out the construction of the Project in conformity with all applicable laws, regulations, rules, statutes, ordinances, and requirements of the governmental agencies having jurisdiction, including without limitation the City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the Newport Beach Municipal Code and City Charter, 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., the Unruh Civil Rights Act, Civil Code Section 51, et seq., and the California Building Standards Code, Health and Safety Code Section 18900, et seq., and all federal, state, and local labor laws and regulations, including, without limitation, if applicable, the requirements to pay prevailing wages under federal law (the Davis Bacon Act, 40 U.S.C. Section 3141, et seq., and the regulations promulgated thereunder set forth at 29 CFR Part 1 (collectively, "Davis Bacon")) and California law (Labor Code Section 1720, et seq.). The Parties acknowledge that a financing structure utilizing certain federal and/or state funding sources and financing scenarios may trigger compliance with applicable state and federal prevailing wage laws and regulations. Developer shall be solely responsible, expressly or impliedly, and legally and financially, for determining and effectuating compliance with all applicable federal, state and local public works requirements, prevailing wage laws, and labor laws and standards, and City makes no representation, either legally and/or financially, as to the applicability or non -applicability of any federal, state and local laws to the Project, either onsite or offsite. Developer expressly, knowingly and voluntarily acknowledges and agrees that City has not previously represented to Developer or to any representative, agent or affiliate of Developer, or its contractor or any subcontractor(s) for the construction or development of the Project, in writing or otherwise, in a call for bids or otherwise, that the work and construction undertaken pursuant to this Agreement is (or is not) a "public work," as defined in Section 1720 of the Labor Code or under Davis Bacon. Developer knowingly and voluntarily agrees that Developer shall have the obligation to provide any and all disclosures or identifications as required by Labor Code Section 1781 and/or by Davis Bacon, as the same may be amended from time to time, or any other similar law or regulation. In addition to any other Developer indemnifications of City set forth in this Agreement, Developer shall indemnify, protect, pay for, defend (with legal counsel reasonably acceptable to City) and hold harmless the Released/Indemnified Parties from and against any and all loss, liability, damage, claim, cost, expense and/or "increased costs" (including reasonable attorney's fees, court and litigation costs, and fees of expert witnesses) which, in connection with the development, construction (as defined by applicable law) and/or operation of the Project, 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 Developer with any applicable local, state and/or federal law or regulation, including, without limitation, any 882/036753-0123 2765748.6 al 1/16/15 —20- 25-34 applicable federal and/or state labor laws or regulations (including, without limitation, if applicable, the requirement to pay state and/or federal prevailing wages); (ii) the implementation of Section 1781 of the Labor Code and/or of Davis Bacon, as the same may be amended from time to time, or any other similar law or regulation; and/or (iii) failure by Developer to provide any required disclosure or identification as required by Labor Code Section 1781 and/or by Davis Bacon, as the same may be amended from time to time, or any other similar law or regulation. It is agreed by the Parties that, in connection with the development and construction (as defined by applicable law or regulation) of the Project, including, without limitation, any and all public works (as defined by applicable law or regulation), Developer shall bear all risks of payment or non-payment of prevailing wages under applicable federal, state and local law or regulation and/or the implementation of Labor Code Section 1781 and/or by Davis Bacon, as the same may be amended from time to time, and/or any other similar law or regulation. "Increased costs," as used in this Section 3.8, shall have the meaning ascribed to it in Labor Code Section 1781, as the same may be amended from time to time. The foregoing indemnity shall survive termination of this Agreement and shall continue after completion of the construction and development of the Project by Developer. 3.10 Taxes and Assessments The Developer shall pay prior to delinquency all real estate taxes and assessments on the Site so long as the Developer retains any ownership interest therein. The Developer shall remove or have removed any levy or attachment made on the Site or any part thereof, or assure the satisfaction thereof within a reasonable time but in any event prior to any sale or transfer of all or any portions thereof. Notwithstanding the above, the Developer shall have the right to contest the validity or amounts of any tax, assessment, or encumbrance available to the Developer in respect thereto, and nothing herein shall limit the remedies available to the Developer in respect thereto. 3.11 Right of the City to Satisfy Other Liens on the Site After Title Passes After the Developer has had written notice and has failed after a reasonable time to challenge, cure, or satisfy any liens or encumbrances on the Site which are not otherwise permitted under this Agreement, the City shall have the right but no obligation to satisfy any such liens or encumbrances, and City reserves the right to consider such failure a breach of this Agreement. In the event City elects to satisfy any such lien or encumbrance, Developer shall reimburse to City such costs as are reasonably incurred by City in satisfying such lien or encumbrance, including any late fees that may be accrued or assessed by the lien holder or the City. City's satisfaction of any such lien or encumbrance shall not be considered a waiver of Developer's failure. Notwithstanding the above, the Developer shall have the right to contest the validity or amounts of any tax, assessment, or encumbrance available to the Developer in respect thereto. 3.12 Release of Construction Covenants Upon written request by Developer, and upon satisfactory completion of the construction of the Project, as evidenced by the City's issuance of a certificate of occupancy or other written documentation of successful completion of final inspection of the building (excluding any 8821036753-0123 2765748.6 al 1/16/15 —21- 25-35 temporary certificate of occupancy issued by the City), City shall issue to Developer a Release of Construction Covenants as long as Developer is not in default under this Agreement or any documents related hereto. The Release of Construction Covenants shall be, and shall so state, a conclusive determination of satisfactory completion of construction of the Project. After the date Developer is entitled to issuance of the Release of Construction Covenants, and notwithstanding any other provision of this Agreement to the contrary, any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the Site shall not (because of any such ownership, purchase, lease, or acquisition) incur any obligation or liability under this Agreement, except that such party shall be bound by the covenants herein that survive the issuance of the Release of Construction Covenants and the covenants set forth in the City Regulatory Agreement. The Release of Construction Covenants is not a notice of completion as referred to in California Civil Code Section 3093. If City refuses or fails to furnish a Release of Construction Covenants after written request from Developer, City shall, within fifteen (15) days after the written request, provide the Developer a written statement of the reasons City refused or failed to furnish a Release of Construction Covenants. The statement shall also contain the City's opinion of the action Developer must take to obtain a Release of Construction Covenants. If City refuses or fails to furnish the Release of Construction Covenants for the reason that specific minor non- life safety items or materials are not available or landscaping or other punch -list items are not complete and the cost thereof is less than two percent (2%) of the City Loan amount, as set forth in the Project Budget, City shall issue the Release of Construction Covenants upon the posting by Developer with City of a cash deposit, bond, or irrevocable letter of credit (in a form acceptable to City), at Developer' s option, in an amount representing one hundred percent (100%) of the fair value of the work not yet completed. Commencing on the date City issues a Release of Construction Covenants, and continuing throughout the term of the City Regulatory Agreement, Developer shall procure and maintain, at its sole cost and expense, in a form and content satisfactory to City Manager, the following types of insurance: i) "All Risks" property insurance on a replacement cost basis in an amount equal to full replacement cost thereof, as the same may change from time to time. The above insurance policy or policies shall contain no coinsurance provision and include coverage for earthquake to the extent generally and commercially available at commercially reasonable rates, if such insurance is generally obtained for affordable housing developments in southern California. City shall be a loss payee under such policy or policies. ii) Business interruption, rental value, and extra expense insurance to protect Developer and City covering loss of revenues and/ or extra expense incurred by reason of the total or partial suspension or delay of, or interruption in, the operation of the Project caused by loss or damage to, or destruction of, any part of the insurable real property structures or equipment as a result of the perils insured against under the all risk physical damage insurance, covering a period of suspension, delay or interruption of at least twelve ( 12) months, in an amount not less than the amount required to cover such business interruption, rental value, and/ or extra expense loss during such period. 882/036753-0123 2765748.6 a 11/16/15 -22- 25-36 iii) Boiler and machinery insurance in the aggregate amount of the full replacement value of the equipment typically covered by such insurance. 3.13 Limitation on Encumbrances Except as otherwise permitted by this Agreement Developer shall not mortgage the Site or any portion thereof or any interest therein, any other mortgages or conveyances for financing that encumber the Site or any portion thereof, without the prior written approval of the City Manager, which approval shall not be unreasonably withheld. 3.14 Holder Not Obligated to Construct Improvements The holder of any mortgage, deed of trust or other security interest authorized by this Agreement shall in no way be obligated by the provisions of this Agreement to construct or complete the Project or to guarantee such construction or completion, nor shall any covenant or any other provision in the City Regulatory Agreement be construed so to obligate such holder. Nothing in this Agreement shall be deemed to construe, permit or authorize any such holder to devote the Site to any uses or to construct any improvements thereon other than those uses or improvements provided for or authorized by the City General Plan, any applicable Specific Plan, and applicable zoning, as the same may be amended from time to time. 3.15 Notice of Default to Mortgage Deed of Trust or Other Security Interest Holders, Right to Cure Whenever the City shall deliver any notice or demand to the Developer with respect to any breach or default by the Developer in completion of construction of the Project, the City shall at the same time deliver a copy of such notice or demand to each holder of record of any mortgage, deed of trust or other security interest authorized by this Agreement who has previously made a written request to the City therefor. It is the duty of the entity making the request to provide the City with up to date contact information. Each such holder shall (insofar as the rights of the City are concerned) have the right, at its option, within sixty (60) calendar days after the receipt of the notice, to cure or remedy or commence to cure or remedy any such default and to add the cost thereof to the security interest debt and the lien on its security interest. In the event there is more than one such holder, the right to cure or remedy a breach or default of the Developer under this Section 3.13 shall be exercised by the holder first in priority or as the holders may otherwise agree among themselves, but there shall be only one (1) exercise of such right to cure and remedy a breach or default of the Developer under this Section 3.13. Nothing contained in this Agreement shall be deemed to permit or authorize such holder to undertake or continue the construction or completion of the Project (beyond the extent necessary to conserve or protect the improvements or construction already made) without first having expressly assumed the Developer's obligations to the City by written agreement satisfactory to the City. The holder in that event must agree to complete, in the manner provided in this Agreement, the construction to which the lien or title of such holder relates and submit evidence satisfactory to the City that it has the qualifications and financial responsibility necessary to perform such obligations. Any such holder properly completing such improvements shall be entitled, upon written request made to the City, to a Release of Construction Covenants from the City. 882/036753-0123 2765748.6 a11/16/15 —23- 25-37 3.16 Failure of Holder to Complete Improvements In any case where, sixty (60) calendar days after an uncured default by the Developer in completion of rehabilitation under this Agreement, the holder of any mortgage, deed of trust or other security interest creating a lien or encumbrance upon the Site has not exercised the option to construct, or if it has exercised the option, has not proceeded diligently with construction, the City may purchase the mortgage, deed of trust or other security interest by payment to the holder of the amount of the unpaid debt, plus any accrued and unpaid interest. If the ownership of the Site has vested in the holder, the City, if it so desires, shall be entitled to a conveyance of the Site from the holder to the City upon payment to the holder of an amount equal to the sum of the following: 1. The unpaid mortgage, deed of trust or other security interest debt at the time title became vested in the holder (less all appropriate credits, including those resulting from collection and application of rentals and other income received during foreclosure proceedings); 2. All expenses with respect to foreclosure, including reasonable attorneys' fees and trustee's fees; 3. The net expenses, if any (exclusive of general overhead), incurred by the holder as a direct result of the subsequent management of the Site or part thereof; 4. The costs of any authorized improvements made by such holder; and 5. An amount equivalent to the interest that would have accrued on the aggregate of the amounts in Subparagraphs 1-4 had all such amounts become part of the mortgage or deed of trust debt and such debt had continued in existence to the date of payment by the City. 3.17 Right of City to Cure Mortgage, Deed of Trust or Other Security Interest Default In the event of a default or breach by the Developer of a mortgage, deed of trust or other security interest with respect to the Site prior to the completion of the Project, and the holder has not exercised its option to complete the construction, the City may cure the default prior to completion of any foreclosure. In such event, the City shall be entitled to reimbursement from the Developer of all costs and expenses incurred by the City in curing the default. The City shall also be entitled to a lien upon the Site to the extent of such costs and disbursements. Any such lien shall be subject to mortgages, deeds of trust or other security interests executed for the sole purpose of obtaining funds to purchase and develop the Site as authorized herein. 3.18 Hazardous Materials 3.18.1 Indemnity The Developer agrees to defend, indemnify, protect and hold harmless the Released/Indemnified Parties from, regarding and against any and all liabilities, obligations, orders, decrees, judgments, liens, demands, actions, "Environmental Response Actions" (as defined in Section 3.16.2 below), claims, losses, damages, fines, penalties, expenses, 882/036753-0123 2765748.6 al 1/16/15 —24- 25-38 "Environmental Response Costs" (as defined in Section 3.16.2 below) or costs of any kind or nature whatsoever, together with fees (including, without limitation, reasonable attorneys' fees and experts' and consultants' fees), occurring during and caused by Developer's use and occupancy of the Site, and resulting from or in connection with the actual or claimed generation, storage, handling, transportation, use, presence, placement, migration and/or release of Hazardous Materials at, on, in, beneath or from the Site, unless caused by the negligence or willful misconduct of Indemnities. The Developer's defense, indemnification, protection and hold harmless obligations herein shall include, without limitation, the duty to respond to any governmental inquiry, investigation, claim or demand regarding the Hazardous Materials, at the Developer's sole cost. Notwithstanding the foregoing or anything to the contrary contained herein, Developer's obligations pursuant to this Section 3.16.1 shall not extend to any Environmental Response Actions and/or Environmental Response Costs caused solely by the gross negligence or willful misconduct of the Released/Indemnified Parties. 3.18.2 Definitions a. As used in this Agreement, the term "Environmental Response Actions" means any and all activities, data compilations, preparation of studies or reports, interaction with environmental regulatory agencies, obligations and undertakings associated with environmental investigations, removal activities, remediation activities or responses to inquiries and notice letters, as may be sought, initiated or required in connection with any local, state or federal governmental or private party claims, including any claims by the Developer. b. As used in this Agreement, the term `Environmental Response Costs" means any and all costs associated with Environmental Response Actions including, without limitation, any and all fines, penalties and damages. C. As used in this Agreement, the term "Hazardous Materials" means any substance, material or waste which is (1) defined as a "hazardous waste," "hazardous material," "hazardous substance," "extremely hazardous waste," or "restricted hazardous waste" under any provision of California law; (2) petroleum; (3) asbestos; (4) polychlorinated biphenyls; (5) radioactive materials; (6) designated as a "hazardous substance" pursuant to Section 311 of the Clean Water Act, 33 U.S.C. Section 1251 et seq. (33 U.S.C. Section 1321) or listed pursuant to Section 307 of the Clean Water Act (33 U.S.C. Section 1317); (7) defined as a "hazardous substance" pursuant to the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. (42 U.S.C. Section 6903) or its implementing regulations; (8) defined as a "hazardous substance" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq. (42 U.S.C. Section 9601); or (9) determined by a California, federal or local governmental authority to be capable of posing a risk of injury to health, safety or property. 3.19 Materiality The Developer acknowledges and agrees that the defense, indemnification, protection and hold harmless obligations of the Developer for the benefit of the City set forth in this Agreement are a material element of the consideration to the City for the performance of its obligations 8821036753-0123 2765748.6 al 1/16/15 -2 5- 25-39 under this Agreement, and that the City would not have entered this Agreement unless the Developer's obligations were as provided for herein. 4. USE OF THE SITE 4.1 Affordable Housing Developer hereby covenants and agrees, for itself and its successors and assigns, to use and maintain the Site during the term of the City Regulatory Agreement only as a rental apartment housing project with twelve (12) Units, with each such Unit to be rented to and occupied by Eligible Tenants at an Affordable Rent, all as more fully described in the City Regulatory Agreement. 4.2 Uses In Accordance with City Regulatory Agreement The Developer covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Site or any part thereof that the Developer and such successors and assignees, shall devote the Site to the uses specified in the City Regulatory Agreement, and this Agreement for the periods of time specified therein. The foregoing covenants shall run with the land. 4.3 Nondiscrimination Developer 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 any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926. 1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, rental, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereof, nor shall Developer, or any person claiming under or through him or her, 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 Site, or any part thereof. 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: 1. In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators, 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 any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any 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 premises herein conveyed. Notwithstanding the forgoing, with respect to familial status, the forgoing shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. The foregoing covenants shall run with the land." 882/036753-0123 2765748.6 al 1/16/15 —26- 25-40 2. In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, 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 any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, 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, sublessees, subtenants, or vendees in the premises herein leased. Notwithstanding the forgoing, with respect to familial status, the forgoing shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. 3. In contracts pertaining to the Site: "There shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises which are the subject of this agreement, nor shall the grantee or any person claiming under or through him or her, establish or permit any 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 premises herein conveyed. Notwithstanding the forgoing, with respect to familial status, the forgoing shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. The foregoing covenants shall run with the land." The covenants established in this Agreement shall, without regard to technical classification and designation, be binding for the benefit and in favor of the City and City's successors and assigns, and any successor in interest to the Site, together with any property acquired by the Developer pursuant to this Agreement, or any part thereof. The covenants against discrimination shall remain in effect in perpetuity. 4.4 Effect of Violation of the Terms and Provisions of this Agreement The City 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 rights 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. This Agreement and the covenants shall run in favor of the City, without regard to whether the City has been, remains or is an owner of any land or interest therein in the Site. The City shall have the right, if this Agreement or covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other property proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and covenants may be entitled. 8821036753-0123 2765748.6 al 1/16/15 —27- 25-41 4.5 Maintenance of the Site The Developer shall maintain the Project on the Site in conformity with the Newport Beach Municipal Code, City charter, county, state, and federal law, and the requirements of the City Regulatory Agreement, and shall keep the Site free from any accumulation of debris or waste materials. If, at any time, Developer fails to maintain the Site or any portion thereof, and said condition is not corrected within thirty (30) calendar days of receipt written notice from the City (or within sixty (60) calendar days of receipt of written notice from the City if such condition is not capable of correction within thirty (30) calendar days but Developer has commenced and is diligently pursuing such correction), the City may enter the Site or applicable portion thereof to perform the necessary maintenance thereon and Developer shall reimburse to City such costs as are reasonably incurred for such maintenance, including any late fees, penalties, interest, or other fees that may be accrued or assessed by the lien holder or the City. This covenant shall run with the land and shall remain in effect for the term of the City Regulatory Agreement. 5. DEFAULTS AND REMEDIES 5.1 Defaults -- General Subject to the extensions of time set forth in Section 6.3, failure or delay by either Party to perform any term or provision of this Agreement constitutes a default under this Agreement. If either Party defaults with regard to any of the provisions of this Agreement, the non -defaulting Party shall serve written notice of such default upon the defaulting Party. If the default is not cured by the defaulting Party within thirty (30) calendar days after service of the notice of default (or within such other period as is set forth herein), the non -defaulting Party shall be entitled to pursue whatever remedies to. which such Party is entitled under this Agreement; provided however that if the default cannot reasonably be cured within such thirty (30) calendar day period, the defaulting Party shall have such additional time to cure as is reasonable under the circumstances, as long as the defaulting Party commences to cure within such thirty (30) calendar day period and diligently prosecutes such cure to completion. 5.2 Legal Actions 5.2.1 Specific Performance The non -defaulting Party, upon expiration of applicable notice and cure periods, shall be permitted, but not obligated, to commence an action for specific performance of the terms of this Agreement, or to cure, correct or remedy any default hereunder or to obtain any other legal or equitable remedy consistent with the purpose of this Agreement. In this regard, Developer specifically acknowledges that City is entering into this Agreement for the purpose of assisting in the redevelopment of the Site and the provision of affordable housing and not for the purpose of enabling Developer to speculate in land. 882/036753-0123 2765748.6 a11/16/15 —28- 25-42 5.2.2 Institution of Legal Actions; No Attorney's Fees Any legal actions must be instituted in the Superior Court of the County of Orange, State of California, or in the Federal District Court in the Southern District of California. In the event of any litigation between the parties hereto, the prevailing Party shall not be entitled to receive its attorney's fees and costs and such other costs incurred in investigating the action and prosecuting the same, including costs for expert witnesses, costs on appeal, and for discovery. 5.2.3 Applicable Law The internal laws of the State of California shall govern the interpretation and enforcement of this Agreement, without regard to conflict of law principles. 5.2.4 Acceptance of Service of Process In the event that any legal action is commenced by the Developer against the City, service of process on the City shall be made by personal service upon the City Manager or in such other manner as may be provided by law. In the event that any legal action is commenced by the City against the Developer, service of process on the Developer shall be made by personal service upon any officer or director of the Developer and shall be valid whether made within or without the State of California or in such other manner as may be provided by law. 5.3 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 either Party of one (1) 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. 5.4 Inaction Not a Waiver of Default Any failures or delays by either 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. 5.5 Termination by the City In the event that prior to the City's provision to Developer of the City Acquisition Assistance: a. The Developer (or any successor in interest) assigns or attempts to assign this Agreement or any rights therein or in the Site in violation of Section 1.5 of this Agreement; or 882/036753-0123 2765748.6 a11/16/15 —29- 25-43 b. There is a change in the ownership of the Developer contrary to the provisions of Section 1.5 hereof; or C. The Developer is in material default hereof, and such default or failure is not be cured within thirty (30) calendar days, or for those defaults which cannot reasonably be cured within thirty (30) calendar days, commenced to be cured within said thirty (30) calendar day period and thereafter diligently prosecuted to completion, after the date of written demand therefor by the City; or d. The Developer fails to satisfy any or all of City Acquisition Financing Funding Conditions by the Outside Site Closing Date; then, at the option of the City, upon such written notice thereof to the Developer as may be set forth above, this Agreement shall be terminated, and thereafter neither Party shall have any further rights or liability against the other under this Agreement. In the event of termination under this section, the Developer shall refund to the City the full amount of the City Acquisition Assistance within ten (10) calendar days. 5.6 City's Option to Acquire Plans If this Agreement is terminated by the City, at the option of the City, which may be exercised in the City's sole and absolute discretion, the City shall have the right to purchase from Developer all materials, including without limitation, any and all plans, blueprints, drawings, sketches, specifications, tentative or final subdivision maps, landscape plans, utilities plans, soils reports, noise studies, environmental assessment reports, grading plans and any other materials relating to the rehabilitation of the Project on the Site ("Plans"), together with copies of all of the Plans, as have been prepared for the development of the Site to date of the termination. City's acquisition or use of the Plans or any of them shall be without any representation or warranty by Developer as to the accuracy or completeness of any such Plans, and City shall assume all risks in the use of the Plans. 6. GENERAL PROVISIONS 6.1 Notices. Demands and Communications Between Parties Written notices, demands and communications between the City and the Developer shall be sufficiently given if (i) delivered by hand, (ii) delivered by reputable same-day or overnight messenger service that provides a receipt showing date and time of delivery, or (iii) dispatched by registered or certified mail, postage prepaid, return receipt requested, to the principal offices of the City and the Developer at the addresses specified in Section 1.3.1 and 1.3.2, respectively. Such written notices, demands and communications may be sent in the same manner to such other addresses as either Party may from time to time designate by mail as provided in this Section 6.1. Any written notice, demand, or communication shall be deemed received immediately if delivered by hand or delivered by messenger in accordance with the preceding paragraph, and shall be deemed received on the third (3rd) day from the date it is postmarked if delivered by registered or certified mail in accordance with the preceding paragraph. 882/036753-0123 2765748.6 a11/16/15 —30- 25-44 6.2 Conflicts of Interest No member, officer, official, or employee of the City shall have any personal interest, direct or indirect, in this Agreement, nor shall any member, official or employee participate in any decision relating to the Agreement which affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is directly or indirectly interested. 6.3 Enforced Delay Extension of Times of Performance In addition to specific provisions of this Agreement, performance by either 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; tsunamis; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; acts or omissions of the other party; acts or failures to act of the City or any other public or governmental agency or entity (except that the acts or failures to act of the City shall not excuse performance by the City); or any other causes beyond the control or without the default 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 enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the Party claiming such extension is sent to the other Party within fifteen (15) calendar days after the commencement of the cause. Times of performance under this Agreement may also be extended in writing by the mutual agreement of City and Developer. The City Manager shall have the authority to administratively approve extensions of time on behalf of City. 6.4 Non -Liability of Officials and Employees of the City No member, official or employee of the City shall be personally liable to the Developer, or any successor in interest, in the event of any default or breach by the City, or for any amount which may become due to the Developer or its successors, or on any obligations under the terms of this Agreement. 6.5 Interpretation• Entire Agreement, Waivers; Attachments The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either Party by reason of the authorship of this Agreement or any other rule of construction that might otherwise apply. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the Parties or their predecessors in interest with respect to all or any part of the subject matter hereof. All waivers of the provisions of this Agreement must be in writing by the appropriate authorities of the City and the Developer, and all amendments hereto must be in writing by the appropriate authorities of the City and the Developer. Except as otherwise expressly provided, in 882/036753-0123 2765748.6 al 1/16/15 -31- 25-45 any circumstance where under this Agreement either Party is required to approve or disapprove any matter, approval shall not be unreasonably withheld. hereof. The exhibits and attachments to this Agreement are incorporated herein and made a part 6.6 Time of Essence Time is of the essence in the performance of this Agreement. 6.7 Maintenance of Books and Records Developer shall prepare and maintain all books, records, and reports necessary to substantiate Developer's compliance with the terms of this Agreement. 6.8 Right to Inspect City shall have the right, upon not less than twenty-four (24) hours' notice, at all reasonable times during business hours, to inspect the books and records of the Developer pertinent to the purposes of this Agreement. 6.9 Binding Effect of Agreement This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their legal representatives, successors, and assigns. This Agreement shall likewise be binding upon and obligate the Site and the successors in interest, owner or owners thereof, and all of the tenants, lessees, sublessees, and occupants of such Site. 6.10 Severability Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. If, however, any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 6.11 Counterparts This Agreement may be executed in one (1) or more counterparts, each of which, when this Agreement shall have been signed by all the parties hereto, shall be deemed to be an original, and such counterparts shall constitute one and the same instrument. 6.12 Amendments to this Agreement The Developer and the City agree to mutually consider reasonable requests for amendments to this Agreement which may be made by either of the Parties hereto, the Qualified Tax Credit Investor, or the Construction Lender, provided such requests are consistent with this Agreement and would not substantially alter the basic business terms included herein. The City 882/036753-0123 2765748.6 al 1/16/15 -32- 25-46 Manager shall have the authority to approve, on behalf of the City, amendments to this Agreement. 882/036753-0123 2765748.6 a11/16/15 [End of Agreement — Signature page follows] -33- 25-47 IN WITNESS WHEREOF, the City and the Developer have signed this Agreement on the respective dates set forth below. Dated: Dated: 2015 2015 Dated: 2015 Dated: 12015 8821036753-0123 2765748.6 a l III 6115 CITY OF NEWPORT BEACH, a California municipal corporation and charter city Dave Kiff City Manager ATTEST: Leilani 1. Brown City Clerk APPROVED AS TO FORM: J 1. f-zr Aaron arp %++h^ WI141]s City Attorney COMMUNITY DEVELOPMENT PARTNERS, a California corporation Eric A. Paine Chief Executive Officer -34- 25-48 882/036753-0123 2765748.6 al 1/16/15 ATTACHMENT NO.1 SITE MAP [SEE FOLLOWING PAGE] 6e 25-49 Ile 2r9 22s ?39 2�S 222 2�s 2r8 ?3r A3 tiF�A �rir 22� �ES 2r9 OR Newport 1270 2rS �0 Shores Park �tiy CQ �S Ile rn* Site Location I J °7 7 sago /� 2°s �o s°Qo: s Sg3° �sr �•rh, �"I hp �� oh sF. w051 h h0 S� Newport ppp pry QHF� Park rop � R Op 1tF h hpp pti� � h yap ph04 g q h hp p� hp �. 5904 Newport Beach Every reasonable effort has been made to assure the accuracy accuracy of the data provided, however, The City of GIS Newport Beach and its employees and agents disclaim any and all responsibility from or relating to 4 �,�WpoRh any results obtained in its use. Q ' Y1 0 100 200 Imagery: 2009-2013 photos provided by Eagle _ Feet Imaging www.eagleaedal.com 1t11$12G15 25-50 ATTACHMENT NO.2 LEGAL DESCRIPTION All that certain real property situated in the County of Orange, State of California, commonly known as 6001 Coast Boulevard and described as follows: Lots 11, 12 and 13 in Block 160 of River Section, Newport Beach, in the City of Newport Beach, County of Orange, State of California, as shown on a map recorded in Book 4, Page 25 of Miscellaneous Maps, in the office of the County Recorder of said County. EXCEPT therefrom Lot 11 all oil, gas, minerals and other hydrocarbon substances lying below a depth shown below but with no right of surface entry, as provided in the deeds of record Depth: 50 feet EXCEPT therefrom Lot 13 all oil, gas, minerals and other hydrocarbon substances lying below a depth shown below but with no right of surface entry, as provided in the deeds of record Depth: 50 feet EXCEPT therefrom Lot 12 all oil, gas, minerals and other hydrocarbon substances lying below a depth shown below but with no right of surface entry, as provided in the deeds of record Depth: 400 feet Assessor's Parcel Number: 045-114-15 882/036753-0123 2765748.6 a 11116/ 15 -1- 25-51 8821036753-0123 2765748.6 al 1/16115 ATTACHMENT NO.3 SCOPE OF DEVELOPMENT [SEE FOLLOWING DOCUMENT] -1- 25-52 newport shores 1 0.1 2.15 bettershelter 25-53 Newport Shores residential design enhancement package. A classic design approach that results in a timeless and contemporary aesthetic by utilizing simple sustainable materials. Create a new sense of community for future tenants to enjoy. Provide communal areas for gardening, relaxation and fun. Interact with local artists to create a local urban experience. A welcome addition to the existing Newport Beach landscape. bettersheiter 25-54 l r r Resealing of panting lot Removal of asphalt for new planting wells Filling in of -existing pool and removal of pool fencing Repair of brokewdamaged flatwork as needed i7emclitian Remove all winelows& frames Remove all exterior swceo and plywood soffit Removal of exterior light fixtures Remove roofs (subject to type of new root) Rena of gutters Remove exterior dry rat Remove unit items including: Al I cabinets. vanities and countertops All exterior front doors & frames All windows & frames (included above) Al I interior doors and frames All interior door hardware All drywall cuts as needed for electrical upgrades AEI boor finishes- vinyl Y carpel All window coverings Alt bathroom accessories Alt kitchen appliances including kitchen hood All water heaters All plumbing fixtures All HVAC/heat systems Ail smoke deleclors All exhaust fans All Electrical fixtures and outlet & switch covers Sanitary sewer Scope all main tines - repair as direCled Asphalt pavement Slurry seal 5tnpe1paini Wheel stops all spaces FE-ric EQ 8 Gales New decorative fencing Pedesiri an gates to adffacent open space Ttash enclosure gates Site furnishing To be selected Landscape & Imyation Ail neer Landscape & irrigandm including oominunity garden outdoor galhering space BBC} area Masonry Redesigned bloO wall alongside adjacent to open space Wood & Plastics Finish Carpentry -as required ArcThiteclural casework - interior trim Cabinets -all new at units Counters & Vanities - solid surface - all new at units Stairs - repairs where headed Wood decorative siding at facade Thermal & Moisture Protection I nsulatian - existing to be examined, must meet energy requirements Waterproofing -- weather barrier for any new siding Roofing -- TPO or built up or foam Gutters. downspout & roof flashing Flashing - including any necessary wall caps Caulking and Sealant Sealing second floor decks Deo' S. Windows Doors & frames - new front doors and frames New interior doors 8. jambs New sliding doors w balconies Windows - alt new Hardware - all new Skyiighls - all new or remove Compty with City egress requirements Finishes Drywall - repair where necessary Siding Systems • wood decorative siding in select locations Ceiling - repair only where necessary, scrape acoustic ceilings Flooring - all new in units - resilient flooring or vinyl plank Painting - exterior - all Painting- interior- all �m-.s Signage Monument 5igm'mural Building Signage - new throughout Bath Accessories - all new in units Fire Protection Specialties - exterior fire extinguishers Equipment Kitchen Equipment - range, micro hood, refer, dishwasher - all new in units Furnishing Window Coverings - all new in units Soec_al CcnstructIan Hazardous Material Remediation - to comply with environmental survey Solar PV Panels - to be selected Laundry Room Upgrades - new flooring, drywall where r-eeded. painting, light futures, venting, WJD equipment MP.aankra! R Phimbino Plumbing Equipment - all new central hot water system Plumbing Fixtures - all new in unfits including garbage disposal HVAC Systems - new heating in all units ExIiaust Fans - all new at bathrooms Electrical Electrical Equipment - new interior subpanels Electrical Finish -- interior - new fixtures, outlets, and covers. as required New smoke defectors & carbon monoxide detectors Electricai Fmrsb - exterior -new fixtures Security Access & Surveillance - camera system. FOB access to common areas New ceiling fans Framing convert one unit to be ADA accessible Seismic Retr4liis to be applied per code bettershelter 25-55 newport shores existing condition - front view bettershelter 25-56 newport shores r proposed design - front view �i bettershelter 25-57 nerpart shores new canvas awning 4" pine wood planks; new pin mounted new fascia and frame natural finish signage applied;painted passion Stucco; new light new metal fruit vine painted fixtures frame garage doors new double pane windows 4" wood planks; painted stucco; painted 4" pine wood planks; natural finish at entry bettershelter 25-58 PJv!Y. R fL 44 IF jr - moi- � - .. ,y�� _ - ' • '"�.'�;_' ^':::C;y a � 'Y.�;f'•v;r proposed design - knack view newport shores Ilk - T P 11 bettershelter 25-60 replace existing railing update existing railing; paint paint existing new light fixtures block wall low impact newport shores stucco; painted r new light fixtures 4" pine wood planks; new slatted security gate natural finish 4" wood planks; painted stucco; painted replant existing planters paint existing planters bettershelter 25-61 newport shares existing condition - side view bettershelter 25-62 7_1 newport shores proposed design - side view bettershelter 25-63 newport shores new double new fascia new canvas awning pane windows applied;painted and frame -0-7 'ter. ti -• stucco; 4" wood planks; existing storage; passion stucco; painted painted paint sane as fruit vine painted stucco 4' pine wood planus; natural finish at entry 4" wood planks, painted bettershefter 25-64 Removal of acnhAt fnr nPuu planting wells — p; Lit.. Little John Bottiebrush Icee Blue Podocarpus super red aloe proposed site plan NA I 0-4, •- - communal gardens newoort shores rnexican feather grass atrican aloe California natives/ drought tolerant plantings (all existing interior planters; all new raised planters) dwarf agave bettershelter 25-65 board formed raised concrete planters - communal gardening common area covered niche dining area proposed site pian existing planter decorative the newport shares existing raised planter I planter existing existing planter I planter �3 f built-in lounge area with bench awning -to match front decks exposed aggregate pathways wood decking california natives f drought tolerant plantings (all b c- t! t- c ex.planters) shelter 25-66 EL proposed design vibe newport shores proposed garage doors U7" . . bettershefter 25-67 nerport shores the J \ NF WPORT SHORES proposed signage and local artist application bettershelter 25-68 newport shores r- � h • . t _ E w proposed security gate proposed back wall design - wood slats proposed bench and common area above existing block wall seating Bette rshetter 25-69 ne rport shores proposed plantings - native drought tolerant species j - t"161 ; i� - L conceptual common area design elements bettershelter 25-70 44 common area planters for communal gardening ne port shores camman area speciality the RK' e �g7. common area niche dining area bettershelter 25-71 proposed upper front parch finish and awning - E74WWII in W. -, 7=-7 - . proposed new railing - or acid to existing report shores proposed light fixtures proposed light fixtures low impact at wall facing wetlands bettefsheltelr 25-72 ATTACHMENT NO.4 SCHEDULE OF PERFORMANCE 882/036753-0123 2765748.6 al 1/16/15 -2- 25-73 ACTIVITY TIME FRAME 1. Developer executes and delivers to City or Not less than five (5) calendar days prior to Escrow Agent, City Regulatory Agreement, the Site Closing Date. City Deed of Trust, and Notice of Affordability Restrictions. (Section 2.2.1(b)) 2. Developer executes and delivers to City the Not less than five (5) calendar days prior to City Note. (Section 2.2.1(c)) Site Closing Date. 3. City deposits City Acquisition Assistance Within five (5) business days after into Escrow. (Section 2.2. 1) Developer has satisfied all of the City Acquisition Assistance Funding Conditions. 4. Escrow Agent disburses City Acquisition Upon satisfaction of conditional and Assistance. (Section 2.2.1) contingent requirements, and City instruction to disburse on the Site Closing Date. 5. Developer submits applications for First Opportunity following Site Closing allocation of Nine Percent (9%) Tax Credits Date, expected to be March, 2016 (Section 2.1.3) 6. Developer closes on all of the construction On or before the Outside Funding Closing funding set forth in the Project Budget, Date. including the Construction Loan and Tax Credits. 7. Developer obtains building permits (if Within thirty (30) calendar days after necessary) and commences rehabilitation of Funding Closing Date. the Project. (Section 3.5) 8. Developer completes rehabilitation of the Within twelve (12) months after Developer Project, records a notice of completion and commences construction. obtains a certificate of occupancy from City or its equivalent, if applicable (Section 3.5) 9. Developer submits annual report pursuant Not later than 60 days after the end of each to the requirements of Section 3.5 of the fiscal year. the September 1 following the 882/036753-0123 2765748.6 al 1/16/15 -2- 25-73 ACTIVITY TIME FRAME Regulatory Agreement and Declarations June 30 end of each fiscal year for term of and Covenants to Health and Safety Code the City Regulatory Agreement. Section 33418 to City. It is understood that the foregoing Schedule is subject to all of the terms and conditions of the text of the Agreement including, without limitation, Section 6.3. The summary of items of performance in the Schedule is not intended to supersede or modify any more complete description in the text; in the event of any conflict or inconsistency between this Schedule and text of the Agreement, the text of the Agreement shall govern. 882/036753-0123 2765748.6 a11/16/15 -3- 25-74 ATTACHMENT NO.5 CITY NOTE [SEE FOLLOWING DOCUMENT] 882/036753-0123 2765748.6 al 1/16/15 25-75 PROMISSORY NOTE Loan Amount: $1,975,000.00 '2015 Newport Beach, California FOR VALUE RECEIVED, COMMUNITY DEVELOPMENT PARTNERS, a California corporation ("Borrower") promises to pay to the CITY OF NEWPORT BEACH, a California municipal corporation and charter city ("City"), the principal sum of One Million Nine Hundred Seventy Five Thousand Dollars ($1,975,000.00), or so much of such principal as may be disbursed pursuant hereto and in accordance with that certain Affordable Housing Agreement between the City and Borrower dated for identification purposes only as of , 2015 ("Agreement'), plus interest on the outstanding principal balance, in accordance with the terms and conditions set forth herein. This Note evidences the obligation of Borrower to City for the repayment of certain funds ("City Loan") loaned to Borrower by City pursuant to the Agreement, in connection with the acquisition of real property located at 6001 Coast Boulevard, in the City of Newport Beach ("Property"). All capitalized terms unless otherwise defined herein shall have the same meaning as set forth in the Agreement, which is incorporated herein by this reference. Reference is also made to the following additional agreements and documents, of even date herewith, involving City and Borrower and/or pertaining to the Property: (i) Deed of Trust with Assignment of Rents by and between Borrower as Trustor, City as beneficiary, and Title Insurance Company as Trustee, and recorded in the Office of the Orange County Recorder ("City Deed of Trust'). The City Deed of Trust secures repayment of this Note and performance under the Agreement and City Regulatory Agreement. (ii) Regulatory Agreement by and between Borrower and City, for the benefit of City, and recorded in the Office of the Orange County Recorder ("City Regulatory Agreement'). 1. Definitions. "Affiliate" shall mean any person or entity directly or indirectly,. through one or more intermediaries, controlling, controlled by or under common control with Borrower which, if Borrower is a partnership or limited liability company, shall include each of the constituent members or general partners, respectively, thereof. The term "control" as used in the immediately preceding sentence means, with respect to a person that is a corporation, the right to the exercise, directly or indirectly, of more than 50% of the voting rights attributable to the shares of the controlled corporation, and, with respect to a person that is not a corporation, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled person. "Annual Financial Statement" shall mean the financial statements prepared by Borrower for each calendar year beginning in the first year for which payment is due under this Note until 8821036753-0123 2765748.6 a11/16/15 25-76 the Maturity Date, including a balance sheet, income statement, statement of retained earnings, statement of cash flows, and footnotes thereto, prepared in accordance with generally accepted accounting principles consistently applied, as audited by an independent certified public accountant. "Applicable Percentage" shall mean twenty-five percent (25%). "Assignment" shall mean any voluntary or involuntary conveyance, disposition, assignment, encumbrance (other than a Refinancing as defined below or the creation of the Senior Loan or any other financing permitted by the Agreement), sublease, sale or transfer of the Property, including, without limitation, any transfer by Borrower of all or any portion of its rights under or interest in the Property, any unpermitted change of ownership or control of Borrower, any foreclosure of Borrower's interest in the Property, whether by judicial proceedings, or by virtue of any power contained in a deed of trust, indenture or other instrument creating a lien against the Property, or any assignment of Borrower's estate in the Property through, or in lieu of, foreclosure or other appropriate and bona fide proceedings in the nature thereof, provided, however, that the term "Assignment" as used herein shall not include any permitted transfer as set forth in Section 8 hereof or in Section 1.5 of the Agreement. "Capital Improvements" shall mean all work and improvements with respect to the Property for which costs and expenses may be capitalized in accordance with GAAP. "City Manager" shall mean the individual duly appointed to the position of the City Manager of the City of Newport Beach, or his or her authorized designee. "Debt Service" shall mean scheduled debt service (including impounds, expenses, and other amounts payable) on the Senior Loan. "Developer Fee" shall mean the fee to be paid to the Developer for rehabilitating the Property. A portion of the Developer Fee may be deferred (the "Deferred Developer Fee"). "Fiscal Year" shall mean the fiscal year of Borrower, which is the calendar year. "GAAP" shall mean generally accepted accounting principles as in effect from time to time, consistently applied. "Maturity Date" shall mean the date the Term expires. "Net Operating Income " shall mean, for the applicable period of time, (i) the amount, if any, by which Operating Income for such period exceeds Operating Expenses paid by Borrower during such period; and, provided there is such an excess, less (ii) the Developer Fee, until such fee is paid in full,. "Operating Expenses " shall mean, for the applicable period of time, all costs and expenses reasonably incurred by Borrower in the ordinary course of the management, ownership, and/or operation of the Property by Borrower, including, without limitation, the payment of Debt Service, the funding of reasonable reserves, and the payment of the following fees paid annually: (a) asset management fees paid to the general partners of the Property owner and the Qualified 882/036753-0123 2765748.6 al 1/16/15 —2- 25-77 Tax Credit Investor; (b) a fee to cover the cost of coordinating any social services required by CTCAC; (c) a property management fee. Operating Expenses shall not include any expenses for Capital Improvements, except for Capital Improvements allowed in the Approved Budget, approved by any lender providing a Senior Loan, or approved, with such approval not to be unreasonably withheld or delayed, by the City Manager. Operating Expenses shall be calculated on a cash basis. "Operating Income " shall mean, for the applicable period of time, all proceeds received by Borrower from the operation of the Property and from any and all sources resulting from or attributable to the operation of the Property, including, without limitation, all rentals, parking receipts, laundry income received by Borrower, forfeited security deposits, and all expense reimbursements paid to Borrower by tenants of the Property. Operating Income shall be calculated on a cash basis. Operating Income excludes insurance proceeds and/or condemnation proceeds. "Senior Loan" shall mean the Acquisition Loan, Construction Loan ,Take -Out Loan and any loans made to Developer by its principals in compliance with its organizational documents. "Senior Loan Documents" shall mean any and all agreements and documents related to a Senior Loan. "City Loan Documents" shall mean, collectively, the Agreement, this Note, the City Regulatory Agreement, and the City Deed of Trust. "Term" shall mean the period commencing on the execution hereof, and terminating on the fifty-fifth (55th) anniversary hereof unless Developer is successful in obtaining an allocation of 9% Tax Credits in which case termination shall be on the 55th Anniversary of the recording of a Notice of Completion for the rehabilitation described in the Scope of Work. 2. Interest and Repayment. 2.1 Basic Interest Rate. Except as provided in section 2.5 below, the disbursed and unpaid principal balance of the City Loan shall bear interest at the simple rate of zero percent (0%) per year (the "Basic Interest Rate"). As used herein, the term "disbursed" shall mean and refer to the time when the City has disbursed such funds to Borrower, pursuant to the Agreement. 2.2 Payment Dates and Amounts. (a) Principal and Interest Payments. Interest and principal payments on this Note shall be payable annually on April 1 of each year during the Term beginning with the 15th year following execution hereof or, if Developer successfully obtains an allocation of Nine Percent (9%) Tax Credits, the first year following the expiration of the fifteen (15) year tax credit compliance period. Payments shall be in an amount equal to the Applicable Percentage multiplied by the Net Operating Income minus GP or LP partnership management fees for the calendar year immediately preceding such annual payment date. For any year in which no payment is due or there is no Net Operating Income available for payment of principal and interest, then interest shall continue to accrue on the City Loan during such year. On or before each April 1 during the Term on which a payment is due, regardless as to whether any payment 882/036753-0123 2765748.6 al 1/16/15 —3- 25-78 of principal and interest is remitted, Borrower shall provide City with an accounting documenting the calculation of Net Operating Income for the previous calendar year. (c) Interest First. All payments shall be applied first to accrued interest and thereafter to principal. 2.3 Financial Statements. On each April 1 on which a payment is due pursuant to Section 2.2(a), Borrower shall submit to City its Annual Financial Statement for the preceding year. Net Operating Income shall be calculated by Borrower for each year for which payment is due pursuant to Section 2.2(a) (and certified by an authorized officer of Borrower) and reported by Borrower to City annually for each calendar year no later than April 1st of the following calendar year. All calculations and records shall be based upon Borrower's Annual Financial Statement and shall be subject to audit by City. In connection with any audit, Borrower shall provide to City for inspection and copying any records, receipts, account books, ledgers, checks, or other documents or other evidence reasonably requested by City for the purpose of verifying Borrower's calculation of Net Operating Income, and shall promptly pay to City any further amount due but not paid as a result of any miscalculation by Borrower. City shall promptly pay Borrower any overpayments made by Borrower as shown by such audit. 2.4 Maturity Dat . The outstanding principal balance together with any outstanding interest due thereon and any other sums payable under this Note shall be due and payable in full on the date the Term terminates (the "Maturity Date"). 2.5 Default Rate. Any amounts (including but not limited to amounts of principal and interest on the City Loan) which Borrower does not pay when otherwise due under the terms of this Note, shall bear interest at the rate of the lesser of ten percent (10%) per annum or the maximum rate allowed per law per annum ("Default Rate"), simple interest, from the date which is ten (10) days after such amount would otherwise be due until the date paid. 3. Prepayment; Application of Payments. At any time after the disbursement of the City Loan proceeds, Borrower may prepay all or a portion of the unpaid principal amount of the City Loan and accrued interest and any other sums outstanding without penalty. All payments, including any prepayments or funds received upon acceleration pursuant to Section 9.2(a) below, shall be applied first toward any outstanding costs of collection or other amounts (excluding City Loan principal or interest thereon) due under this Note or the Agreement, then toward outstanding interest accrued at the Default Rate, if any, then toward outstanding interest accrued at the Basic Interest Rate, if any, and finally toward the remaining principal balance under the Note. 4. Security and Source of Payment. Borrower's obligations under this Note, the Agreement and the City Regulatory Agreement shall be secured by the City Deed of Trust. The City Loan shall constitute a nonrecourse obligation of Borrower, and neither Borrower nor any partner, member, or shareholder thereof shall have any personal liability for repayment. 882/036753-0123 2765748.6 all/16/15 —4- 25-79 The foregoing limitation of liability is intended to apply only to the obligation for the repayment of the principal of, and payment of interest on this Note; nothing contained herein is intended to relieve the Borrower and, if Borrower is a partnership, limited liability company, or corporation, any general partner, member, or shareholder of Borrower of liability for damages caused to City as a result of (i) fraud or willful misrepresentation; (ii) the failure to pay taxes, assessments or other charges which may create liens on the real property described in the City Loan documents that are payable or applicable prior to any foreclosure under the Deed of Trust (to the full extent of such taxes, assessments or other charges); (iii) the retention of any rental income or other income arising with respect to the Property collected by Borrower after an Event of Default to the full extent of the rental income or other income retained and collected by Borrower after the giving of any such notice, and not used to pay Operating Expenses of the Property; (iv) the misapplication of any proceeds under any insurance policies or awards resulting from condemnation or the exercise of the power of eminent domain or by reason of damage, loss or destruction to any portion of the Property; and (v) breach of any environmental covenant or representation made by the Borrower relating to the Property. 5. Obligation of Borrower Unconditional. The obligation of Borrower to repay the City Loan and all accrued interest thereon shall be absolute and unconditional, and until such time as all of the outstanding principal of and interest on this Note shall have been fully paid, Borrower agrees that it: (a) will use the funds solely for the purposes set forth herein and in the Agreement; and (b) will not terminate or suspend any payment or obligations under this Note, the Agreement, or any other document executed hereunder or in connection herewith for any cause, including without limitation, any acts or circumstances that may constitute failure of consideration, commercial frustration of purpose, or any duty, liability or obligation arising out of or in connection with this Note, the Agreement or any document executed hereunder or in connection herewith. 6. Purpose of City Loan. The City Loan proceeds shall be used by Borrower for acquisition of the Property in connection with the Project outlined in the Agreement. In no event shall Borrower use or otherwise invest the proceeds of the City Loan except as expressly provided in this Note and in the Agreement. 7. Covenants of Borrower. As additional consideration for the making of the City Loan by City, Borrower covenants as follows: 7.1 Compliance with Agreement City Regulatory Agreement and City Deed of Trust. Borrower shall comply with all of its obligations under the Agreement, City Regulatory Agreement and the City Deed of Trust. Any amounts payable by Borrower under the Agreement, City Regulatory Agreement, or the City Deed of Trust (other than amounts also payable hereunder) shall be deemed added to the principal amount of the City Loan payable hereunder. 7.2 Other Loans. Borrower shall comply with all monetary and non -monetary covenants associated with any loan secured by an interest in the Property. Borrower shall provide 882/036753-0123 2765748.6 a11/16/15 —5- 25-80 to City a copy of any notice of default within five (5) calendar days after receiving any notice of a default or alleged default of such covenants by Borrower, and Borrower shall promptly cure any such default and cooperate in permitting City, to the extent City in its sole discretion elects to do so, to cure or assist in curing the default. Any cost or expenditure incurred by City in providing or assisting in such a cure shall be deemed added to the outstanding principal amount of the City Loan. 7.3 Payment of Deferred Developer Fee and Partnership Management Fee. Borrower shall not pay the Deferred Developer Fee or make any payments of the Partnership Management Fee unless and until Operating Income exceeds Operating Expenses. 8. Assignment of this Note. This Note shall be assignable by Borrower in compliance with Section 1.5 of the Agreement. Notwithstanding anything which may be or appear to be herein to the contrary, no purported assignment of this Note and/or the City Loan shall be effective if such assignment would violate the terms, conditions and restrictions of any applicable ordinances, laws, or regulations. City's consent to such assignment shall be expressly conditioned upon (a) the assignee's execution of such documents as required by City including, without limitation, any and all documents deemed necessary by City to provide for said assignee's assumption of all of the obligations of Borrower hereunder, under the City Regulatory Agreement, under the City Deed of Trust, and under the City Loan Documents, and (b) City's approval of the financial and credit worthiness of such proposed assignee. 9. Events of Default and Remedies. 9.1 Borrower Events of Default. The occurrence of any of the following shall, after the giving of any notice and expiration of any applicable cure period as described therein, constitute an event of default by Borrower hereunder ("Event of Default"): (a) The failure of Borrower to pay or perform any monetary covenant or obligation under the terms of this Note without curing such failure within ten (10) calendar days after receipt of written notice of such default from City (or from any party authorized by City to deliver such notice as identified by City in writing to Borrower); (b) The failure of Borrower to perform any non -monetary covenant or obligation under this Note without curing such failure within thirty (30) calendar days after receipt of written notice of such default from City (or from any party authorized by City to deliver such notice as identified by City in writing to Borrower) specifying the nature of the event or deficiency giving rise to the default and the action required to cure such deficiency. Provided, however, that if any default with respect to a non -monetary obligation is such that it cannot be cured within a 30 -day period, it shall be deemed cured if Borrower commences the cure within said 30 -day period and diligently prosecutes such cure to completion thereafter. Notwithstanding anything herein to the contrary, the herein described notice requirements and cure periods shall not apply to any Event of Default described in Sections 9.1(e) or 9.1(f) below; 882/036753-0123 2765748.6 al 1/16/15 -6- 25-81 (c) The failure of Borrowers to perform any covenant or obligation under the Agreement, City Deed of Trust or City Regulatory Agreement, unless the default is cured within the applicable cure period (if any). (d) The material falsity of any representation or breach of any representation or warranty made by Borrower under the terms of this Note, the Agreement, the City Regulatory Agreement or the City Deed of Trust; (e) Borrower or any constituent member or general partner, or majority shareholder, of Borrower shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian or the like of its property, (ii) fail to pay or admit in writing its inability to pay its debts generally as they become due, (iii) make a general assignment for the benefit of creditors, (iv) be adjudicated bankrupt or insolvent or (v) commence a voluntary petition that is not withdrawn within ten (10) calendar days of the filing thereof or answer seeking an arrangement with creditors or an order for relief or seeking to take advantage of any insolvency law or file an answer admitting the material allegations of a petition filed against it in any bankruptcy or insolvency proceeding; (f) If without the application, approval or consent of Borrower, a proceeding shall be instituted in any court of competent jurisdiction, under any law relating to bankruptcy, in respect of Borrower or any constituent member or general partner or majority shareholder of Borrower, for an order for relief or an adjudication in bankruptcy, a composition or arrangement with creditors, a readjustment of debts, the appointment of a trustee, receiver, liquidator or custodian or the like of Borrower or of all or any substantial part of Borrower's assets, or other like relief in respect thereof under any bankruptcy or insolvency law, and, if such proceeding is being contested by Borrower, in good faith, the same shall (i) result in the entry of an order for relief or any such adjudication or appointment, or (ii) continue undismissed, or pending and unstayed, for any period of ninety (90) consecutive days; (g) Voluntary cessation of the operation of the Property for a continuous period of more than thirty (30) calendar days or the involuntary cessation of the operation of the Property for a continuous period of more than sixty (60) days; (h) A transfer in violation of Section 1.5 of the Agreement; or (i) Subject to the notice and cure provisions set forth in the Agreement, Borrower shall be in default under any of the terms of the Senior Loan, any other financing, or any other secured or unsecured obligation relating to the Property, unless the default is cured within the cure period, if any, applicable thereto under the terms and obligation which is in default. 9.2 City Remedies. Upon the occurrence and during the continuance of an Event of Default hereunder, City may, in its sole discretion, take any one or more of the following actions: (a) By notice to Borrower and the Qualified Tax Credit Investor, except in the case of a default by Borrower under Section 9.1(e) or Section 9.1(f) in which event no notice pursuant to this Note shall be required, declare the entire then unpaid principal balance of the City Loan immediately due and payable, and the same shall become due and payable without 882/036753-0123 2765748.6 al 1/16/15 -7- 25-82 further demand, protest or further notice of any kind, all of which are expressly waived. Upon such declaration, outstanding principal and (to the extent permitted by law) interest and any other sums outstanding in connection with the City Loan shall thereafter bear interest at the Default Rate, payable from the date of such declaration until paid in full; (b) Subject to the nonrecourse provisions of Section 4 above, take any and all actions and do any and all things which are allowed, permitted or provided by law, in equity or by statute, in the sole discretion of City, to collect the amounts then due and thereafter to become due hereunder, to exercise its rights under the City Deed of Trust, and to enforce performance and observance of any obligation, agreement or covenant of the Borrower under this Note, the Agreement or under any other document executed in connection herewith; (c) Subject to the nonrecourse provision of Section 4 above, upon the occurrence of an Event of Default which is occasioned by Borrower's failure to pay money, City may, but shall not be obligated to, make such payment. If such payment is made by City, Borrower shall deposit with City, upon written demand therefor, such sum plus interest at the Default Rate. In either case, the Event of Default with respect to which any such payment has been made by City shall not be deemed cured until such repayment (as the case may be) has been made by Borrower. Until repaid, such amounts shall have the security afforded the amounts evidenced by this Note; or (d) Subject to the nonrecourse provisions of Section 4 above, upon the occurrence of an Event of Default described in Section 9.1(e) or 9.1(f) hereof, City shall be entitled and empowered by intervention in such proceedings or otherwise to file and prove a claim for the whole amount owing and unpaid on the City Loan and, in the case of commencement of any judicial proceedings, to file such proof of claim and other papers or documents as may be necessary or advisable in the judgment of City and its counsel to protect the interests of City and to collect and receive any monies or other property in satisfaction of its claim. 9.3 No Remedy Exclusive. No remedy herein conferred upon or reserved to City is intended to be exclusive of any other available remedy or remedies, but each such remedy shall be cumulative and shall be in addition to every other remedy given under this Note or now existing at law or in equity or by statute; and may be exercised in such number, at such times and in such order as City may determine in its sole discretion. No delay or omission to exercise any right or power upon the occurrence of any Event of Default hereunder shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient by City. In order to entitle City to exercise any right or remedy reserved to it under this Note, no notice shall be required except as expressly provided herein. 10. Agreement to Pay Attorneys' Fees and Expenses. In the event that City brings any action or files any proceeding in connection with the enforcement of its rights under this Note or the City Deed of Trust, as a consequence of any breach by Borrower of its obligations thereunder, the prevailing party in such action or proceeding shall be entitled to have its reasonable attorneys' fees and out-of-pocket expenditures 8821036753-0123 2765748.6 a11/16/15 —8- 25-83 paid by the losing party. The attorneys' fees so recovered shall include fees for prosecuting or defending any appeal and shall be awarded for any supplemental proceedings until the final judgment is satisfied in full. In addition to the foregoing award of attorneys' fees, the prevailing party in any lawsuit on this Note or the City Deed of Trust shall also be entitled to its reasonable attorneys' fees incurred in any post judgment proceedings to collect or enforce the judgment. In addition to the foregoing, Borrower agrees to pay or reimburse City, upon demand by City, for all costs incurred by City in connection with enforcement of this Note or the City Deed of Trust, including without limitation, reasonable attorneys' fees and costs, if there shall be filed by or against Borrower any proceedings under any federal or state bankruptcy or insolvency laws, whether City is a creditor in such proceedings or otherwise. 11. Notices. All notices, demands, requests, elections, approvals, disapprovals, consents or other communications given under this Note shall be in writing and shall be given by personal delivery, first class mail certified or registered, return receipt requested, or reputable overnight delivery service that provides a receipt with the time and date of delivery and addressed as follows: City of Newport Beach To City 100 Civic Center Drive Newport Beach, California 92660 Attn: City Manager With a copy to: City of Newport Beach 100 Civic Center Drive Newport Beach, California 92660 Attn: Community Development Director Community Development Partners To Borrower: 3416 Via Oporto, Suite 301 Newport Beach, CA 92663 Attn: Eric A. Paine With a copy to: Law Offices of Patrick R. Sabelhaus 1006 Fourth Street, Sixth Floor Sacramento, CA 95814 Attn: Stephen A. Strain, Esq. Any Notice shall be deemed received immediately if delivered by hand or by overnight courier, and shall be deemed received on the third day from the date it is postmarked if delivered by registered or certified mail. 12. Severability. The invalidity or unenforceability of any one or more provisions of this Note will in no way affect any other provisions. 882/036753-0123 2765748.6 al 1/16/15 —9- 25-84 13. Interpretation. Whenever the context requires, all words used in the singular will be construed to have been used in the plural, and vice versa, and each gender will include any other gender. The captions of the paragraphs of this Note are for convenience only and do not define or limit any terms or provisions. Time is of the essence in the performance of this Note by Borrower. Borrower has been represented by counsel in the negotiation of this Note, and it shall not be interpreted in favor of or against any party on account of relative responsibilities in drafting. Notwithstanding any other provision of this Note, nothing herein or in this Note shall be deemed to require Borrower to pay interest in an amount in excess of any applicable usury law or other legal limitation on interest, and the terms of this Note shall be interpreted to require in each instance the lesser of (a) the amount stated in this Note, and (b) the maximum applicable legal limit. 14. No Waiver: Consents. Any waiver by City must be in writing and will not be construed as a continuing waiver. No waiver will be implied from any delay or failure by City to take action on account of any default of Borrower. Consent by City to any act or omission by Borrower will not be construed to be a consent to any other or subsequent act or omission or to waive the requirements for City's consent to be obtained in any future or other instance. 15. Governing Law. This Note shall be governed by the internal laws of the State of California without regard to conflict of law principles. 16. Representations and Warranties of Borrower. Borrower hereby warrants and represents to City that: 16.1 Organization and Standing. Borrower is a California legal entity as described in the Agreement, duly organized, qualified to operate in California and validly existing and in good standing under all applicable laws, and has all requisite power and authority to enter into and perform its obligations under this Note, the Agreement, the City Deed of Trust, the City Regulatory Agreement and all other documents executed in connection herewith. 16.2 Enforceability. This Note and all other instruments to be executed by Borrower in connection with the City Loan constitute the legal, valid and binding obligation of Borrower, without joinder of any other party. 16.3 Authorization and Consents. The execution, delivery and performance of this Note and all other instruments to be executed in connection herewith is consistent with the operating agreement, partnership agreement and any articles and bylaws governing Borrower and have been duly authorized by all necessary action of Borrower's members, partners, directors, officers and shareholders. 882/036753-0123 2765748.6 al 1/16/15 —1 0- 25-85 16.4 Due and Valid Execution. This Note and all other instruments to be executed in connection herewith, will, as of the date of their execution, have been duly and validly executed by Borrower. 16.5 Licenses. Borrower will obtain and maintain all material licenses, permits, consents and approvals required by all applicable governmental authorities to own and operate the Property. 16.6 Litigation and Compliance. To the best of Borrower's knowledge, there are no suits, other proceedings or investigations pending or threatened against, or affecting the business or the properties of Borrower (other than those as have been previously disclosed in writing to City) which could materially impair its ability to perform its obligations under this Note, nor is Borrower in violation of any laws or ordinances which could materially impair Borrower's ability to perform its obligations under this Note. 16.7 Default. To Borrower's current actual knowledge, there are no facts now in existence which would, with the giving of notice or the lapse of time, or both, constitute an "Event of Default" hereunder, as described in Section 9. 16.8 No Violations. To the best of Borrower's knowledge, the execution and delivery of this Note, the Agreement and all other documents executed or given thereunder, and the performances hereunder and thereunder by Borrower, as applicable, will not constitute a breach of or default under any instrument or agreement to which Borrower may be a party nor, to the best of Borrower's knowledge, will the same constitute a breach of or violate any law or governmental regulation. 17. Approvals. Any review or approval of any matter by the City or any City official or employee under this Note shall be solely for the benefit of City, and neither Borrower nor any other person shall rely upon such review or approval as an indication of the wisdom, soundness, safety, appropriateness, or presence or absence of any matter. Without limiting the generality of the foregoing, Borrower and not City shall be solely responsible for assuring compliance with laws, the suitability of the Property for the Project, the adequacy of the plans, and the safety of the Project construction site, the completed Project, and the operation thereof. 18. Waiver. Subject to Section 4, Borrower agrees that it will still be liable for repayment of this Note, even if the holder hereof does not follow the procedures of presentment, protest, demand, diligence, notice of dishonor and of nonpayment, which requirements are hereby waived. Failure of City or other holder hereof to exercise any right or remedy hereunder shall not constitute a waiver of any future or other default. No acceptance of a past due installment or indulgence granted from time to time shall be construed to be a waiver of, or to preclude the exercise of, the right to insist upon prompt payment thereafter or to impose late charges retroactively or prospectively, or to waiver or preclude the exercise of, the right to insist upon prompt payment thereafter or to impose late charges retroactively or prospectively, or to waive or preclude the exercise of any other rights which City may have. 882/036753-0123 2765748.6 al 1/16/15 -11- 25-86 882/036753-0123 2765748.6 a11/16/15 [End — Signature Page Follows] -12- 25-87 IN WITNESS WHEREOF, Borrower has executed this Note as of the date and year first above written. Dated: , 2015 COMMUNITY DEVELOPMENT PARTNERS, a California corporation Eric A. Paine Chief Executive Officer APPROVED AS TO FORM: Dated: l , 2015 Aaron C. Harp t.%m ►►]1sitc City Attorney 8821038753-0123 x765749.5 a11/ 16,'l5 -13- ATTACHMENT NO.6 CITY DEED OF TRUST [SEE FOLLOWING DOCUMENT] 8821036753-0123 2765748.6 a11/16/15 25-89 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City of Newport Beach 100 Civic Center Drive Newport Beach, California 92660 Attn: City Manager APN: [Free Recording Requested Government Code Sections 6103 and 273831 DEED OF TRUST WITH ASSIGNMENT OF RENTS This DEED OF TRUST, dated as of , 2015 for identification purposes only, is made by and among COMMUNITY DEVELOPMENT PARTNERS, a California corporation ("Trustor"), , a ("Trustee"), and CITY OF NEWPORT BEACH, a California municipal corporation and charter city ("Beneficiary"). Trustor grants, transfers and assigns to Trustee in trust, upon the trusts, covenants, conditions and agreements and for the uses and purposes hereinafter contained, with power of sale, and right of entry and possession, all of its title and interest in that real property (the "Property") in the City of Newport Beach, County of Orange, State of California, described in Exhibit A attached hereto and incorporated herein by this reference. Together with Trustor's interest in all buildings, structures and improvements of every nature whatsoever now or hereafter situated on the Property; and Together with the rents, issues and profits thereof, and together with all buildings and improvements of every kind and description now or hereafter erected or placed thereon, and all fixtures, including but not limited to all gas and electric fixtures, engines and machinery, radiators, heaters, furnaces, heating equipment, laundry equipment, steam and hot-water boilers, stoves, ranges, elevators and motors, bathtubs, sinks, water closets, basins, pipes, faucets and other plumbing and heating fixtures, mantles, cabinets, refrigerating plant and refrigerators, whether mechanical or otherwise, cooking apparatus and appurtenances, and all shades, awnings, screens, blinds and other furnishings, it being hereby agreed that all such fixtures and furnishings shall to the extent permitted by law be deemed to be permanently affixed to and a part of the realty; and Together with all building materials and equipment now or hereafter delivered to said premises and intended to be installed therein; and Together with all plans, drawings, specifications, and articles of personal property now or hereafter attached to or used in and about the building or buildings now erected or hereafter to be erected on the Property which are necessary to the completion and comfortable use and occupancy of such building or buildings for the purposes for which they were or are to be erected, including all other goods and chattels and personal property as are ever used or furnished in operating a building, or the activities conducted therein, similar to the one herein described and referred to, and all renewals or replacements thereof or articles in substitution 8821036753-0123 2765748.6 a11/16/15 —2- 25-90 therefor, whether or not the same are, or shall be attached to said building or buildings in any manner. To have and to hold the property hereinbefore described (including the Property and all appurtenances), all such property being referred to collectively herein as the "Property," to Trustee, its successors and assigns forever. FOR THE PURPOSE of securing (1) payment of indebtedness of Trustor to the Beneficiary in the principal sum of ONE MILLION NINE HUNDRED SEVENTY FIVE THOUSAND DOLLARS ($1,975,000) (the "City Loan"), evidenced by a promissory note dated , 2015 between Trustor and Beneficiary (the "City Loan Note"), together with all sums due thereunder including interest and other charges; and (2) the performance of each agreement of Trustor in this Deed of Trust and the City Loan Note, including, without limitation, that certain Affordable Housing Agreement entered into by and between Trustor and Beneficiary on or about , 2015 (the "AHA"), and that certain Regulatory Agreement and Declaration of Covenants and Restrictions entered into by and between Trustor and Beneficiary on or about the same date hereof (collectively, the "City Loan Documents"). Said City Loan Note and all of its terms are incorporated herein by reference and this conveyance shall secure any and all extensions, amendments, modifications or renewals thereof however evidenced, and additional advances of the City Loan evidenced by any note reciting that it is secured hereby. AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR COVENANTS AND AGREES: 1. That it will pay the City Loan Note at the time and in the manner provided therein; 2. That it will not permit or suffer the use of any of the Property for any purpose other than the use for which the same was intended at the time this Deed of Trust was executed, namely, as affordable rental housing; 3. That the City Loan Note is incorporated herein and made a part of this Deed of Trust. Upon default under the City Loan Note or this Deed of Trust, Beneficiary, at its option, may declare the whole of the indebtedness secured hereby to be due and payable; 4. That all rents, profits and income from the Property covered by this Deed of Trust are hereby assigned to Beneficiary for the purpose of discharging the debt hereby secured. Permission is hereby given to Trustor so long as no default exists hereunder, to collect such rents, profits and income; 5. That upon default hereunder and the expiration of any applicable notice and cure periods, Beneficiary shall be entitled to the appointment of a receiver by any court having jurisdiction, without notice, to take possession and protect the Property described herein and operate same and collect the rents, profits and income therefrom; b. That Trustor will keep the improvements now existing or hereafter erected on the Property insured against loss by fire and such other hazards, casualties and contingencies as may be required in writing from time to time by Beneficiary, and all such insurance shall be evidenced by standard fire and extended coverage insurance policy or policies, in the amount of 882/036753-0123 2765748.6 a11/16/15 —3- 25-91 the replacement value of the improvements. Such policies shall be endorsed with a standard mortgage clause with loss payable to Beneficiary and certificates thereof together with copies of original policies shall be deposited with Beneficiary. Such policies shall be endorsed with a standard mortgage clause with loss payable to Beneficiary subordinate to the rights and interest of the beneficiary of the deed of trust securing the Senior Loan, as described in paragraph 30, below) and certificates thereof together with copies of original policies shall be deposited with Beneficiary; 7. To pay, before delinquency, any taxes and assessments affecting said Property when due, all encumbrances, charges and liens, with interest, on said Property or any part thereof which appear to be prior or superior hereto, all costs, fees and expenses of this Trust unless exemption is obtained therefrom; 8. To keep said Property in good condition and repair, not to remove or demolish any buildings thereon, to complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged, or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor (unless contested in good faith if Trustor provides security satisfactory to Beneficiary that any amounts found to be due will be paid and no sale of the Property or other impairment of the security hereunder will occur); to comply with all laws affecting said Property or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof; not to commit, suffer or permit any act upon said Property in violation of law and/or covenants, conditions and/or restrictions affecting said Property; not to permit or suffer any alteration of or addition to the buildings or improvements hereafter constructed in or upon said Property without the consent of Beneficiary; 9. To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee, and to pay all costs and expenses, including cost of evidence of title and attorneys' fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear; 10. Should Trustor fail to make any payment or do any act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof. Beneficiary or Trustee, being authorized to enter upon said Property for such purposes, may commence, appear in and/or defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; may pay, purchase, contest or compromise any encumbrance, charge, or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, may pay necessary expenses, employ counsel, and pay counsel's reasonable fees; 11. Beneficiary shall have the right to pay fire and other property insurance premiums when due should Trustor fail to make any required premium payments. All such payments made by Beneficiary shall be added to the principal sum secured hereby; 12. To pay immediately and without demand all sums so expended by Beneficiary or Trustee, under permission given under this Deed of Trust, with interest from date of expenditure at the rate specified in the City Loan Note; 882/036753-0123 2765748.6 al 1/16/15 —4- 25-92 13. That the City Loan advanced hereunder is to be used for the acquisition of the Property; and upon the failure of Trustor to keep and perform such covenants, the principal sum and all arrears of interest, and other charges provided for in the City Loan Note shall, at the option of Beneficiary, become due and payable, anything contained herein to the contrary notwithstanding; 14. Trustor further covenants that it will not voluntarily create, suffer or permit to be created against the Property, subject to this Deed of Trust, any lien or liens (other than the lien of a deed of trust recorded prior in time and right to this Deed of Trust and/or the lien of a deed of trust to which Trustor has expressly agreed to subordinate the lien of this Deed of Trust, with City's written permission) except as authorized by Beneficiary, and further that it will keep and maintain the Property free from the claims of all persons supplying labor or materials which will enter into the construction of any and all buildings now being erected or to be erected on the Property; 15. That any and all improvements made or about to be made upon the Property, and all plans and specifications, comply with all applicable municipal ordinances and regulations and all other regulations made or promulgated, now or hereafter, by lawful authority, and that the same will upon completion comply with all such municipal ordinances and regulations and with the rules of the applicable fire rating or inspection organization, bureau, association or office. IT IS MUTUALLY AGREED THAT: 16. Subject to any cure rights under the AHA, if the construction of any improvements as herein referred to shall not be carried on with reasonable diligence, or shall be discontinued at any time for any reason other than events of Force Ma'e� ure pursuant to Paragraph 35 hereof, Beneficiary, after due notice to Trustor or any subsequent owner, is hereby invested with full and complete authority to enter upon the Property, employ watchmen to protect such improvements from depredation or injury and to preserve and protect the personal property therein, and to continue any and all outstanding contracts for the erection and completion of said building or buildings, to make and enter into any contracts and obligations wherever necessary, either in its own name or in the name of Trustor, and to pay and discharge all debts, obligations and liabilities incurred thereby. All such sums so advanced by Beneficiary (exclusive of advances of the principal of the indebtedness secured hereby) shall be added to the principal of the indebtedness secured hereby and shall be secured by this Deed of Trust and shall be due and payable on demand; 17. In the event of any fire or other casualty to the Project or eminent domain proceedings resulting in condemnation of the Project or any part thereof, Trustor shall have the right to rebuild the Project, and to use all available insurance or condemnation proceeds therefor subject to the prior right to any insurance proceeds or condemnation awards of the beneficiary of the deed of trust securing the Senior Loan, as described in paragraph 30; 18. Upon default by Trustor in making any payments provided for herein or in the City Loan Note secured hereby, and if such default is not made good within fifteen (15) calendar days after notice from Beneficiary, or if Trustor shall fail to perform any covenant or agreement in this Deed of Trust within thirty (30) calendar days after written demand therefor by Beneficiary (or, in the event that more than thirty (30) calendar days is reasonably required to cure such default, should Trustor fail to promptly commence such cure, and diligently prosecute 882/036753-0123 2765748.6 a 11/16/15 -5- 25-93 same to completion), Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale, and of written notice of default and of election to cause the Property to be sold, which notice Trustee shall cause to be duly filed for record and Beneficiary may foreclose this Deed of Trust. Beneficiary shall also deposit with Trustee this Deed of Trust, the City Loan Note and all documents evidencing expenditures secured hereby; 19. After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell Trustor's interest in said Property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said interest by public announcement at the time and place of sale, and from time to time thereafter may postpone the sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to the purchaser its deed conveying Trustor's interest in the property so sold, but without any covenant or warranty, express or implied. The recitals in the deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary, may purchase at the sale. Trustee shall apply the proceeds of sale to payment of (1) the expenses of such sale, together with the reasonable expenses of this trust including therein reasonable Trustee's fees or attorneys' fees for conducting the sale, and the actual cost of publishing, recording, mailing and posting notice of the sale; (2) the cost of any search and/or other evidence of title procured in connection with such sale and revenue stamps on Trustee's deed; (3) all sums expended under the terms hereof, not then repaid, with accrued interest at the rate specified in the City Loan Note; (4) all other sums then secured hereby; and (5) the remainder, if any, to the person or persons legally entitled thereto; 20. Beneficiary may from time to time substitute a successor or successors to any Trustee named herein or acting hereunder to execute this Deed of Trust. Upon such appointment, and without conveyance to the successor trustee, the latter shall be vested with all title, powers, and duties conferred upon any Trustee herein named or acting hereunder. Each such appointment and substitution shall be made by written instrument executed by Beneficiary, containing reference to this Deed of Trust and its place of record, which, when duly recorded in the proper office of the county or counties in which the property is situated, shall be conclusive proof of proper appointment of the successor trustee; 21. The pleading of any statute of limitations as a defense to any and all obligations secured by this Deed of Trust is hereby waived to the full extent permissible by law; 22. Upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed of Trust and the City Loan Note to Trustee for cancellation and retention and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters of fact shall be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as "the person or persons legally entitled thereto"; 23. The trust created hereby is irrevocable by Trustor; 24. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, 882/036753-0123 2765748.6 al 1/16/15 In 25-94 their heirs, legatees, devisees, administrators, executors, successors, and assigns. The term "Beneficiary" shall include not only the original Beneficiary hereunder but also any successor to Beneficiary's rights, powers, and responsibilities, and any future owner and holder including pledgees, of the City Loan Note secured hereby. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. All obligations of each Trustor hereunder are joint and several; 25. Trustee accepts this trust when this Deed of Trust, duly executed and acknowledged, is made public record as provided by law. Except as otherwise provided by law, Trustee is not obligated to notify any party hereto of pending sale under this Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee; 26. The undersigned Trustor requests that copies of any notice of default and of any notice of sale hereunder be mailed to it at: 3416 Via Oporto, Suite 301 Newport Beach, CA 92663 Attention: Eric A. Paine Trustor agrees, at any time after receipt of a written request from Beneficiary, to furnish to Beneficiary a detailed statement in writing of income, rents, profits, and operating expenses of the premises, and the names of the occupants and tenants in possession, together with the expiration dates of their leases and full information regarding all rental and occupancy agreements, and the rents provided for by such leases and rental and occupancy agreements, and such other information regarding the Property and their use as may be requested by Beneficiary. 27. In order to induce Beneficiary to make the loan evidenced hereby, Trustor agrees that in the event of any Transfer of the Property without the prior written consent of Beneficiary (other than a transfer resulting from a foreclosure, or conveyance by deed in lieu of foreclosure, by the holder of the deed of trust securing the Senior Loan), Beneficiary shall have the absolute right at its option, without prior demand or notice, to declare all sums secured hereby immediately due and payable. Consent to one such transaction shall not be deemed to be a waiver of the right to require consent to future or successive transactions. Beneficiary may grant or deny such consent in its sole discretion and, if consent should be given, any such transfer shall be subject to this paragraph 28, and any such transferee shall assume all obligations hereunder and agree to be bound by all provisions contained herein. Such assumption shall not, however, release Trustor from any liability thereunder without the prior written consent of Beneficiary. (a) As used herein, "transfer" includes the sale, agreement to sell, transfer or conveyance of the Property, or any portion thereof or interest therein, whether voluntary, involuntary, by operation of law or otherwise, the execution of any installment land sale contract or similar instrument affecting all or a portion of the Property, or the lease of all or substantially all of the Property. "Transfer" shall not include the leasing of individual residential units on the Property or any transaction that doesn't require approval by the Beneficiary pursuant to Section 1.5 of the AHA. (b) The term "sale" means any transfer, assignment, conveyance or lease (other than to a tenant for occupancy) of the Property and/or the improvements thereon, or any 882/036753-0123 2765748.6 al 1/16/15 —7- 25-95 portion thereof, or any interest therein by the Trustor, but excludes any purchase option agreement given to Trustor's general partner(s). Sale includes a sale in condemnation or under threat thereof. Sale does not include dedications and grants of easements to public and private utility companies of the kind customary in real estate development. Sale shall also not include any transaction that doesn't require approval by the Beneficiary pursuant to Section 1.5 of the AHA. Notwithstanding anything to the contrary contained in this Deed of Trust or in the City Loan Note, prior to declaring any default or taking any remedy permitted under this Deed of Trust, the City Loan Note or applicable law based upon an alleged default, the Qualified Tax Credit Investor (the "Investor"), if there is one, shall have a period of not less than thirty (30) calendar days to cure such alleged default; provided, however, if in order to cure such default the Investor reasonably believes that it must remove a general partner of Trustor, or all of them, pursuant to authority granted under the agreement that sets forth the terms of Trustor's limited partnership (the "Partnership Agreement"), and consistent with Section 1.5 of the AHA, the Investor shall so notify Beneficiary and so long as the Investor is reasonably and diligently attempting to remove the general partner or general partners, the Investor shall have until the date that is thirty (30) calendar days after the effective date of the removal of the general partner or general partners to cure such default. 28. Trustor shall permit Beneficiary and its agents or representatives to inspect the Property at any and all reasonable times, with twenty-four (24) hours advance notice. Inspections shall be conducted so as not to interfere with the tenants' use and enjoyment of the Property. 29. It is hereby expressly agreed and acknowledged by Trustor and Beneficiary that this Deed of Trust will be a subordinate deed of trust only to the deed of trust securing the Acquisition Loan before the close of escrow. Further, this Deed of Trust shall only be subordinate to the deed of trust securing the Construction Loan upon receipt and approval of the Nine Percent (9%) Tax Credits by Developer, and that the City Loan secured hereby, and the City Loan Note will be subject and subordinate only to these deeds of trust as such are defined in the AHA (collectively referred to as the "Senior Loan"). 30. For purposes of this Deed of Trust, "Hazardous Materials" means any substance, material, or waste which is or becomes regulated by any local governmental authority, the State of California, or the United States Government, including, but not limited to, any material or substance which is (i) defined as a "hazardous waste", "acutely hazardous waste", "extremely hazardous waste", or "restricted hazardous waste" under Section 25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii) defined as a "hazardous substance" under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter -Presley - Tanner Hazardous Substance Account Act), (iii) defined as a "hazardous material", "hazardous substance", or "hazardous waste" under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv) defined as a "hazardous substance" under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) petroleum, (vi) asbestos, (vii) polychlorinated byphenyls, (viii) listed under Article 9 or defined as "hazardous" or "extremely hazardous" pursuant to Article 11 of Title 22 of the California Code of Regulations, Chapter 20, (ix) designated as "hazardous substances" pursuant to Section 311 882/036753-0123 2765748.6 al 1/16/15 —g- 25-96 of the Clean Water Act (33 U.S.C. Section 1317), (x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. (42 U.S.C. Section 6903), (xi) defined as "hazardous substances" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq., (xii) methyl -tertiary butyl ether, (xiii) perchlorate or (xiv) any other substance, whether in the form of a solid, liquid, gas or any other form whatsoever, which by any governmental requirements either requires special handling in its use, transportation, generation, collection, storage, handling, treatment or disposal, or is defined as "hazardous" or harmful to the environment. For purposes hereof, "Hazardous Materials" excludes materials and substances in quantities as are commonly used in the construction and operation of an apartment complex provided that such materials and substances are used in accordance with all applicable laws. 31. In addition to the general and specific representations, covenants and warranties set forth in this Deed of Trust or otherwise, Trustor represents, covenants and warrants, with respect to Hazardous Materials, as follows: (a) Neither Trustor nor, to the best knowledge of Trustor, any other person, has ever caused or permitted any Hazardous Materials to be manufactured, placed, held, located or disposed of on, under or at the Property or any part thereof, and neither the Property nor any part thereof, or any property adjacent thereto, has ever been used (whether by Trustor or, to the best knowledge of the Trustor, by any other person) as a manufacturing site, dump site or storage site (whether permanent or temporary) for any Hazardous Materials; (b) Trustor hereby agrees to indemnify Beneficiary, its officers, employees, contractors and agents, and hold Beneficiary, its officers, employees, contractors and agents harmless from and against any and all losses, liabilities, damages, injuries, costs, expenses and claims of any and every kind whatsoever paid, incurred or suffered by, or asserted against Beneficiary, its officers, employees, contractors or agents for, with respect to, or as a direct or indirect result of, the presence or use, generation, storage, release, threatened release or disposal of Hazardous Materials on or under the Property or the escape, seepage, leakage, spillage, discharge, emission or release of any Hazardous Materials from the Property (including, without limitation, any losses, liabilities, damages, injuries, costs, expenses or claims asserted or arising under CERCLA, any so-called "Superfund" or "Superlien" law, or any other federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to or imposing liability or standards of conduct concerning any Hazardous Materials), caused by Trustor. (c) Trustor has not received any notice of (i) the happening of any event involving the use, spillage, discharge or cleanup of any Hazardous Materials ("Hazardous Discharge") affecting Trustor or the Property or (ii) any complaint, order, citation or notice with regard to air emissions, water discharges, noise emissions or any other environmental, health or safety matter affecting Trustor or the Property ("Environmental Complaint") from any person or entity, including, without limitation, the United States Environmental Protection City ("EPA"). If Trustor receives any such notice after the date hereof, then Trustor will give, within seven (7) business days thereafter, oral and written notice of same to Beneficiary. (d) Without limitation of Beneficiary's rights under this Deed of Trust, Beneficiary shall have the right, but not the obligation, to enter onto the Property or to take such 882/036753-0123 2765748.6 al 1/16/15 —9- 25-97 other actions as it deems necessary or advisable to clean up, remove, resolve or minimize the impact of, or otherwise deal with, any such Hazardous Materials or Environmental Complaint upon its receipt of any notice from any person or entity, including without limitation, the EPA, asserting the existence of any Hazardous Materials or an Environmental Complaint on or pertaining to the Property which, if true, could result in an order, suit or other action against Trustor affecting any part of the Property by any governmental agency or otherwise which, in the sole opinion of Beneficiary, could jeopardize its security under this Deed of Trust. All reasonable costs and expenses incurred by Beneficiary in the exercise of any such rights shall be secured by this Deed of Trust and shall be payable by Trustor upon demand together with interest thereon at a rate equal to the highest rate payable under the City Loan Note secured hereby. 32. The following shall be an "Event of Default:" (a) Failure of Trustor to pay, when due, principal and interest and any other sums or charges on the City Loan Note, in accordance with the provisions set forth in the City Loan Note and such failure is not cured within fifteen (15) calendar days after receipt of written notice from Beneficiary; or (b) A violation of the terms, conditions or covenants of the City Loan Note, this Deed of Trust, the AHA or City Regulatory Agreement after the expiration of any applicable cure period. 33. Subject to the extensions of time set forth in paragraph 35, and subject to the further provisions of this paragraph 34 and of paragraphs 36 and 37, failure or delay by the Trustor to perform any term or provision of this Deed of Trust constitutes a default under this Deed of Trust. The Trustor must immediately commence to cure, correct, or remedy such failure or delay and shall complete such cure, correction or remedy with reasonable diligence. (a) The Beneficiary shall give written notice of default to the Trustor with a copy to the limited partners of Trustor for which Beneficiary has been supplied with address for notice, specifying the default complained of by the Beneficiary. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. (b) The Trustor shall not be in default so long as it endeavors to complete such cure, correction or remedy with reasonable diligence, provided such cure, correction or remedy is completed within thirty (30) calendar days after receipt of written notice (or such additional time as may be reasonably necessary to correct the cause). (c) Any failures or delays by the Beneficiary 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. Delays by the Beneficiary in asserting any of its rights and remedies shall not deprive the Beneficiary 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. 34. Notwithstanding specific provisions of this Deed of Trust, performance hereunder shall not be deemed to be in default where delays or defaults are due to: war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; casualties; acts of God or other deities; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; inability to secure 882/036753-0123 2765748.6 al 1/16/15 _10- 25-98 necessary labor, materials or tools; delays of any contractor or supplier; acts of the other party; acts or failure to act of the Beneficiary, or any other public or governmental agency or entity (except that any act or failure to act of Beneficiary shall not excuse performance by Beneficiary); or any other causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform. An extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time the party claiming such extension gives notice to the other party, provided notice by the party claiming such extension is given within fifteen (15) calendar days after the commencement of the cause. Times of performance under this Deed of Trust may also be extended in writing by the Beneficiary and Trustor. 35. If a monetary event of default occurs under the terms of the City Loan Note or this Deed of Trust, prior to exercising any remedies thereunder Beneficiary shall give Trustor written notice of such default. Trustor shall have a period of fifteen (15) calendar days after such notice is given within which to cure the default prior to exercise of remedies by Beneficiary under the City Loan Note and this Deed of Trust. 36. If a non -monetary event of default occurs under the terms of the City Loan Note or this Deed of Trust, prior to exercising any remedies hereunder or thereunder, Beneficiary shall give Trustor notice of such default. If the default is reasonably capable of being cured within thirty (30) calendar days, Trustor shall have such period to effect a cure prior to exercise of remedies by the Beneficiary under the City Loan Note and this Deed of Trust. If the default is such that it is not reasonably capable of being cured within thirty (30) calendar days, and Trustor (a) initiates corrective action within said period, and (b) diligently, continually, and in good faith works to effect a cure as soon as possible, then Trustor shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by Beneficiary. In no event shall Beneficiary be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by any failure to cure a default or the default is not cured within one hundred eighty (180) calendar days after the first notice of default is given. 37. Beneficiary shall provide those limited partners of Trustor for which Beneficiary has been supplied with address for notice with a copy of any written notice provided to Trustor under the terms of the City Loan Documents. In the event of a monetary event of default, Trustor's limited partners shall have a period of fifteen (15) calendar days after receipt of such notice, or such longer period of time as may be set forth in the City Loan Documents, to cure the default prior to exercise of any remedy by Beneficiary. In the event a non -monetary event of default occurs under any City Loan Document, Trustor's limited partners shall have a period of thirty (30) calendar days after receipt of such notice, or such longer period of time as may be set forth in the City Loan Documents, to cure the default prior to exercise of any remedy by Beneficiary. Notwithstanding anything to the contrary contained in the City Loan Documents, Beneficiary hereby agrees that any cure of any default made or tendered by Trustor's limited partners shall be deemed to be a cure by Trustor and shall be accepted or rejected on the same basis as if such cure were made or tendered by Trustor. 38. Subject to paragraph 35, Trustor, upon the occurrence of an Event of Default as described in paragraph 33 that has not been cured with the applicable cure period set forth in paragraph 36 or 37, shall be obligated to repay the City Loan and, subject to the nonrecourse provision of the City Loan Note, Beneficiary may seek to enforce payment of any and all amounts due by Trustor pursuant to the terms of the City Loan Note. 882/036753-0123 2765748.6 al 1/16/15 —1 1- 25-99 39. All expenses (including reasonable attorneys' fees and costs and allowances) incurred in connection with an action to foreclose, or the exercise of any other remedy provided by this Deed of Trust, including the curing of any Event of Default, shall be the responsibility of Trustor. 40. Except as provided in paragraph 30, each successor owner of an interest in the Property, other than through foreclosure, deed in lieu of foreclosure or an owner who takes an interest in the Property after a foreclosure has occurred, shall take its interest subject to this Deed of Trust. 41. Notwithstanding anything to the contrary herein, Beneficiary agrees that any extended low-income housing commitment (as such term is defined in Section 42(h)(6)(B) of the Internal Revenue Code) (the "Extended Use Agreement") shall be subordinate to this Deed of Trust and shall be recorded against the Property; provided that such Extended Use Agreement, by its terms, will terminate upon foreclosure or upon a transfer of the Property by instrument in lieu of foreclosure in accordance with said Section 42(h)(6)(B). 882/036753-0123 2765748.6 al 1/16/15 [Signatures on Following Page] -12- 25-100 "Trustor" COMMUNITY DEVELOPMENT PARTNERS, a California corporation Dated: , 2015 Eric A. Paine Chief Executive Officer A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA )ss. COUNTY OF On , before me, , Notary Public, (here insert name and title of the officer) personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature 882/036753-0123 2765748.6 a11/16/15 -13- (seal) 25-101 EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY All that certain real property situated in the County of Orange, State of California, commonly known as 6001 Coast Boulevard and described as follows: Lots 11, 12 and 13 in Block 160 of River Section, Newport Beach, in the City of Newport Beach, County of Orange, State of California, as shown on a map recorded in Book 4, Page 25 of Miscellaneous Maps, in the office of the County Recorder of said County. EXCEPT therefrom Lot 11 all oil, gas, minerals and other hydrocarbon substances lying below a depth shown below but with no right of surface entry, as provided in the deeds of record Depth: 50 feet EXCEPT therefrom Lot 13 all oil, gas, minerals and other hydrocarbon substances lying below a depth shown below but with no right of surface entry, as provided in the deeds of record Depth: 50 feet EXCEPT therefrom Lot 12 all oil, gas, minerals and other hydrocarbon substances lying below a depth shown below but with no right of surface entry, as provided in the deeds of record Depth: 400 feet Assessor's Parcel Number: 045-114-15 882/036753-0123 2765748.6 al 1/16/15 -1- 25-102 ATTACHMENT NO.7 CITY REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS [SEE FOLLOWING DOCUMENT] 8821036753-0123 2765748.6 a11116115 25-103 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Newport Beach 100 Civic Center Drive Newport Beach, California 92660 Attn: City Manager (Space Above This Line for Recorder's Office Use Only) (Exempt from Recording Fee per Gov. Code § 27383) REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS This REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS ("Agreement") is made and entered into this day of ("Effective Date"), by and between the CITY OF NEWPORT BEACH, a California municipal corporation and charter city ("City") and COMMUNITY DEVELOPMENT PARTNERS, a California corporation ("Developer"). RECITALS: A. Developer is the owner of fee title to that certain real property more particularly described in Exhibit "A", attached hereto and incorporated by reference herein (the "Site"). B. Pursuant to an Affordable Housing Agreement entered into by and between Developer and City, dated (the "AHA"), City has agreed to provide financial assistance to Developer in an amount up to One Million Nine Hundred Seventy Five Thousand Dollars ($1,975,000.00) (the "City Loan") for the purpose of assisting Developer to acquire the Site of an affordable rental apartment complex consisting of twelve (12) units (the "Project"). The AHA requires Developer to enter into this Agreement, which provides, among other requirements, that twelve (12) of the apartment units within the Project be rented to and occupied by "Eligible Tenants" (as those terms are defined in Article 1.0 below). The AHA is incorporated herein by reference. C. Reference is also made to the following documents, of even date herewith: (i) Note, by Developer as "Borrower" in favor of the City as lender ("City Note"). The City Note evidences the City Loan. (ii) Deed of Trust with Assignment of Rents, by and between Developer as trustor and City as beneficiary, and recorded in the Official Records of the County of Orange ("City Deed of Trust"). The City Deed of Trust secures (a) repayment of the City Note, and (b) performance of Developer's obligations hereunder, and under the AHA. 882/036753-0123 2765748.6 a1 1/16/15 25-104 The AHA, the City Note and the City Deed of Trust are referred to herein collectively as the "City Agreements." The City Agreements are incorporated herein as if fully set forth. D. To assist Developer with rehabilitating the Project, Developer intends to apply for an allocation of low income housing tax credits from the California Tax Credit Allocation Committee (the "CTCAC") pursuant to pursuant to the Tax Credit Program (as defined below). If Developer is awarded an allocation of Tax Credits Developer will be required to enter into a regulatory agreement with TCAC (the "Tax Credit Regulatory Agreement") that will be recorded in the Official Records of the County of Orange. E. Pursuant to the City Agreements, Developer has agreed to acquire the Site and thereafter maintain the Project with not fewer than twelve (12) units restricted to rental to and occupancy by Eligible Tenants. F. City and Developer now desire to place restrictions upon the use and operation of the Site, in order to ensure that the Site shall be operated continuously as an affordable rental apartment complex in accordance with the terms hereof until the expiration of the Term (as defined below). AGREEMENT: NOW, THEREFORE, the Developer and City declare, covenant and agree, by and for themselves, their heirs, executors, administrators, successors and assigns, and all persons claiming under or through them, that, commencing upon the Effective Date as follows: 1.0 DEFINITIONS. 1.1 Affiliate. As used in this Agreement, the term "Affiliate" shall mean any person or entity directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with Developer which, if Developer is a partnership or limited liability company, shall include each of the constituent members or general partners, respectively, thereof. The term "control" as used in the immediately preceding sentence means, with respect to a person that is a corporation, the right to the exercise, directly or indirectly, of more than 50% of the voting rights attributable to the shares of the controlled corporation, and, with respect to a person that is not a corporation, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled person. 1.2 Affordable Rent. As used in this Agreement, the term "Affordable Rent' shall mean the amount of monthly rent, including a reasonable utility allowance, that does not exceed the maximum allowable rent allowed under the CTCAC to be charged by Developer and paid by Eligible Tenants. 1.3 AMI. As used in this Agreement, the term "AMP' or "Area Median Income" shall mean the median family income (adjusted for family size) for the Orange County area established by the U.S. Department of Housing and Urban Development ("HUD"). 1.4 Capital Improvements. As used in this Agreement, the term "Capital Improvements" means all work and improvements with respect to the Site for which costs and 882/036753-0123 2765748.6 al 1/16/15 -2- 25-105 expenses may be capitalized in accordance with generally accepted accounting principles as in effect from time to time, consistently applied. 1.5 City. As used in this Agreement, the term "City" means the City of Newport Beach, a California municipal corporation and charter city. 1.6 City Manager. As used in this Agreement, the term "City Manager" shall mean the individual duly appointed to the position of City Manager of the City of Newport Beach, or his or her authorized designee. Whenever an administrative action is required by City to implement the terms of this Agreement, the City Manager, or his or her authorized designee, shall have authority to act on behalf of City. 1.7 CTCAC. As used in this Agreement, "CTCAC" shall mean the California Tax Credit Allocation Committee. 1.8 Eligible Tenant. As used in this Agreement, the term "Eligible Tenant" shall mean a household whose annual income does not exceed the thirty percent (30%), forty percent (40%), fifty percent (50%), sixty percent (60%) of AMI level designated for the Unit to be occupied as defined in the Restricted Unit Matrix (Attachment "C").. 1.9 Operating Expenses. As used in this Agreement, the term "Operating Expenses" shall have the meaning ascribed in the City Note. 1.10 Operating Income. As used in this Agreement, the term "Operating Income" shall have the meaning ascribed in the City Note. 1.11 Qualified Tax Credit Investor. As used in this Agreement, the term "Qualified Tax Credit Investor" shall mean any entity or entities experienced in investing in projects financed with Tax Credits which acquires an interest in the owner of the Project and has the right to receive Tax Credits. 1.12 Restricted Unit Matrix. As used in this Agreement, the term "Restricted Unit Matrix" shall mean that certain affordability matrix attached hereto and incorporated herein as Exhibit "C". 1.13 Tax Credit Program. As used in this Agreement, the term "Tax Credit Program" shall mean the low-income housing tax credit program authorized pursuant to Internal Revenue Code Section 42, California Health and Safety Code Sections 50199.4-50199.22, California Revenue and Taxation Code Sections 12205, 12206, 17057.5, 17058, 23610.4, and 23610.5, and applicable federal and State regulations. 1.14 Tax Credit RegulatoryAgreement. As used in this Agreement, the term "Tax Credit Regulatory Agreement" shall have the meaning ascribed in Recital D of this Agreement. 1.15 Tax Credits. As used in this Agreement, the term "Tax Credits" shall mean the low income housing tax credits granted by TCAC for the Project pursuant to the Tax Credit Program. 882/036753-0123 2765748.6 a11/16/15 —3- 25-106 1.16 Term. As used in this Agreement, the term "Term" shall mean the period commencing on the execution hereof, and terminating on the fifty-fifth (551h) anniversary hereof unless Developer is successful in obtaining an allocation of Nine Percent (9%) Tax Credits in which case termination shall be on the fifty-fifth (55th) anniversary of the recording of a Notice of Completion for the rehabilitation described in the Scope of Work. 1.17 Unit. As used in this Agreement, the term "Unit" or "unit" shall mean a rental apartment dwelling unit on the Site. 2.0 RESIDENTIAL RENTAL PROPERTY. 2.1 Construction of the Project on the Site. Developer shall acquire and rehabilitate the Project on the Site in accordance with the City Agreements, including the Schedule of Performance set forth in the AHA, for the purpose of providing the Units described herein and in the City Agreements. The Project shall be owned, managed, and operated as a rental apartment project, with each of the Units rented to and occupied by Eligible Tenants, as provided in this Agreement. 2.2 Facilities. All of the Units in the Project shall contain facilities for living, sleeping, eating, cooking and sanitation in accordance with this Agreement, the AHA, the City Agreements, and all of the permits and approvals for the Project. 2.3 Residential Use. Without the City's prior written consent, which consent may be given or withheld in its sole and absolute discretion, none of the Units in the Project will at any time be utilized on a transient basis or will ever be used as a hotel, motel, dormitory, fraternity house, sorority house, rooming house, nursing home, hospital, sanitarium, or trailer court or park, nor shall the Units be used as a place of business except as may otherwise be allowed by applicable law. 2.4 Services. Services will be provided by Mercy House A specific detailed services plan shall be put together based on the needs of the tenants who live at the property. The property shall commit to providing services as required and in compliance conditions of CTCAC. Services shall include at a minimum a Service Coordinator or Other Services Specialist, as further defined herein. Service Coordinator responsibilities shall include, but are not limited to: (a) providing tenants with information about available services in the community, (b) assisting tenants in accessing services through referral and advocacy, and (c) organizing community -building and/or other enrichment activities for tenants (such as holiday events, tenant council, etc.). Other Services Specialist shall provide individualized assistance, counseling and/or advocacy to tenants, such as to assist them in accessing education, securing employment, securing benefits, gaining skills or improving health and wellness. Additional services shall be provided by and in coordination with the United States Department of Veterans Affairs ("VA"). Specifically, residents participating in the Veterans Affairs Supportive Housing ("VASH") program shall receive case management services that are included as part of the program. 8821036753-0123 2765748.6 a11116/15 —4- 25-107 2.4 Conversion of Units. No part of the Project will at any time be owned by a cooperative housing corporation, nor shall the Developer take any steps in connection with the conversion to such ownership or uses to condominiums, or to any other form of ownership, without the prior written approval of City which approval may be given or withheld in its sole and absolute discretion. 2.5 No Preference. All of the Units will be available for rental in accordance with the terms of this Agreement, and the Developer shall not give preference to any particular class or group of Eligible Tenants in renting the Units in the Project. 2.6 Liability of Developer. Developer and any manager it employs shall not incur any liability under this Agreement as a result of fraud or intentional misrepresentation by a tenant. 3.0 OCCUPANCY OF RESTRICTED UNITS BY ELIGIBLE TENANTS. Developer hereby represents, warrants, and covenants as follows: 3.1 Occupancy Levels. Except as expressly provided herein, throughout the term of this Agreement, the Units shall be continuously occupied or held vacant and available for occupancy by Eligible Tenants in accordance with the Restricted Unit Matrix. 3.2 Occupancy y Eligible Tenant. A Unit occupied by an Eligible Tenant who qualified as an Eligible Tenant at the commencement of the occupancy shall be treated as occupied by an Eligible Tenant throughout their tenancy. A Unit previously occupied by an Eligible Tenant and then vacated shall be considered occupied by an Eligible Tenant until the Unit is reoccupied, provided Developer uses its best efforts to re -lease the vacant Unit to an Eligible Tenant in compliance with the Restricted Unit Matrix. Any vacated Unit shall be held vacant until re-leased to an Eligible Tenant. Developer shall take any or all of the following actions, as necessary, to locate Eligible Tenants for the Project: (i) notification to the City of the available Unit; and (ii) advertisement of the available Unit in a newspaper of general circulation in the City. 3.3 Income Computation and Certification. Immediately prior to an Eligible Tenant's occupancy of a Unit, Developer shall obtain an Income Computation and Certification Form and the required third party verification requested within the form required by CTCAC (the "CTCAC Income Certification Form") from each such Eligible Tenant dated no more than 90 days prior to the date of initial occupancy in the Project by such Eligible Tenant. Developer shall use good faith efforts to verify that the income provided by an applicant is accurate by complying with any rules or regulations promulgated by TCAC for doing so. Developer shall maintain in its records each Income Computation and Certification Form obtained pursuant to this section for a minimum of five (5) years. Developer shall provide a copy of the CTCAC Income Certification Form, third party source documentation of income and assets and a copy of the executed lease to City annually upon request. 3.4 Recertification. Within sixty (60) days prior to the first anniversary date of the occupancy of a Unit by an Eligible Tenant, and on each anniversary date thereafter, Developer 882/036753-0123 2765748.6 a11/16/15 —5- 25-108 shall recertify the income of such Eligible Tenant by obtaining a completed Income Recertification Form, in the form required by CTCAC. Developer shall provide a copy of the Income Recertification Form, third party source documentation of income and assets and a copy of the executed lease renewal to City annually upon request. If any completed Income Recertification Form indicates that an Eligible Tenant is no longer qualified for a unit at the rent level to which said Eligible Tenant's Unit is restricted such Unit shall still be deemed in compliance with this Agreement so long as the next available Unit is rented at the original rent level of said Eligible Tenant's Unit. Any such Unit shall continue to be in compliance with this Agreement until such time as the Eligible Tenant's income exceeds 140% of AMI at which time Developer shall take all legal action available to remove such tenant and rent the Unit to a new Eligible Tenant. 3.5 Annual Report. The Developer shall file with the City an annual report no later than sixty (60) days after the end of each fiscal year as established for the Project. The report shall contain a certification by the Borrower as to such information as the City may then require including, but not limited to, the following: a. The fiscal condition of the Project, including a financial statement for the previous fiscal year that includes a balance sheet and a profit and loss statement indicating any surplus or deficit in operating accounts; a detailed itemized listing of income and expenses; the amounts of any fiscal reserves and the total amount of Residual Receipts received. b. The substantial physical defects in the Project, including a description of any major repair or maintenance work undertaken or needed in the previous and current fiscal years. Such statement shall describe what steps the Borrower has taken in order to maintain the Project in a safe and sanitary condition in accordance with applicable housing and building codes. C. The occupancy of the Project indicating: i. the verified income of each current household; and ii.. the current rents charged each household and whether these rents include utilities. d. General management performance, including tenant relations and other relevant information. e. A summary of the information received from the recertification of tenants' incomes. f. Evidence that the insurance required by Section 7 below has been maintained. 3.6 Annual Operating Budget. The fiscal year for the Project shall commence on January 1, and conclude on December 31. No later than sixty (60) days prior to the beginning of 882/036753-0123 2765748.6 al 1/16/15 -6- 25-109 each subsequent fiscal year of the Project, the Developer shall submit to the City a proposed annual operating budget on a form provided by the City. The proposed annual operating budget shall set forth the Developer's estimate of the Project's income, operating expenses and debt service for the upcoming year, reserves, proposed rent adjustments, and a year-to-date operating statement. Developer shall operate the Project in accordance with the operating budget on file with the City. Such budget shall show all anticipated income, debt service and expenses for management, operations, reserves and maintenance for the first fiscal year or portion thereof following initial occupancy. 3.7 Determination of Affordable Rent. All Units shall be rented at an Affordable Rent in accordance with the Restricted Unit Matrix. 3.7.1 Adjustment of Rent. Rent may change as changes in the applicable gross rent amounts, the income adjustments, or the monthly allowance for utilities and services warrant. Any increase in rents is subject to the provisions of outstanding leases. Developer must provide households occupying the Units not less than thirty (30) days prior written notice before implementing any rent increase. 3.8 Maintenance of Records. Developer shall maintain complete and accurate records pertaining to the Units, and shall permit any duly authorized representative of the City, upon twenty-four (24) hours prior notice and during business hours, to inspect the books and records of Developer pertaining to the Project including, but not limited to, those records pertaining to the occupancy of the Units. 3.9 Reliance on Tenant Representations. Each tenant lease shall contain a provision to the effect that Developer has relied on the income certification and supporting information supplied by the tenant in determining qualification for occupancy of the Unit, and that any material misstatement in such certification (whether or not intentional) will be cause for immediate termination of such lease. Each such lease shall also include the lease rider attached hereto and incorporated herein as Exhibit "B" and shall state that occupation of the Unit is subject to the income restrictions described in this Agreement. 3.10 Remedy For Violation of Rental Requirements. 3.10.1 It shall constitute a default for Developer to charge or accept for any Unit rent amounts in excess of the amount provided for in Section 3.5 of this Agreement. In the event that Developer charges or receives such higher rental amounts, Developer shall be required to reimburse the tenant that occupied said Unit at the time the excess rent was received for the entire amount of such excess rent received, provided that such tenant can be found following reasonable inquiry. For purposes of this Section 3.8, "reasonable inquiry" shall include Developer's review of information provided by the tenant as part of the tenant's application and forwarding information provided by the tenant, and Participant's reasonable attempts to contact the tenant and any other persons listed in either of such documents. If, after such reasonable inquiry, Developer is unable to locate the tenant, Developer shall pay such sums to the City. 882/036753-0123 2765748.6 al 1/16/15 —7- 25-110 3.10.2 Except as otherwise provided in this Agreement, it shall constitute a default for Developer to knowingly (or without investigation as required herein) initially rent any Unit to a tenant who is not an Eligible Tenant. In the event Developer violates this Section, in addition to any other equitable remedy City shall have for such default, Developer, for each separate violation, shall be required to pay to City an amount equal to (i) the greater of (A) the total rent Developer received from such ineligible tenant, or (B) the total rent Developer was entitled to receive for renting that Unit, plus (ii) any relocation expenses incurred by City as a result of Developer having rented to such ineligible person. The terms of this Section shall not apply if Developer rents to an ineligible person as a result of such person's fraud or misrepresentation. THE PARTIES HERETO AGREE THAT THE AMOUNTS SET FORTH IN THIS SECTION 3.10 (THE "DAMAGE AMOUNTS") CONSTITUTE A REASONABLE APPROXIMATION OF THE ACTUAL DAMAGES THAT CITY WOULD SUFFER DUE TO THE DEFAULTS BY DEVELOPER SET FORTH IN SECTIONS 3.10.1 THROUGH 3.10.2, CONSIDERING ALL OF THE CIRCUMSTANCES EXISTING ON THE EFFECTIVE DATE OF THIS AGREEMENT, INCLUDING THE RELATIONSHIP OF THE DAMAGE AMOUNTS TO THE RANGE OF HARM TO CITY AND ACCOMPLISHMENT OF CITY'S PURPOSE OF ASSISTING IN THE PROVISION OF AFFORDABLE HOUSING TO ELIGIBLE TENANTS THAT REASONABLY COULD BE ANTICIPATED AND THE ANTICIPATION THAT PROOF OF ACTUAL DAMAGES WOULD BE COSTLY OR INCONVENIENT. THE AMOUNTS SET FORTH IN THIS SECTION 3.8 SHALL BE THE SOLE REMEDY FOR THE DEFAULTS SET FORTH IN THIS SECTION 3.8. IN PLACING ITS INITIALS AT THE PLACES PROVIDED HEREINBELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY HAS BEEN REPRESENTED BY COUNSEL WHO HAS EXPLAINED THE CONSEQUENCES OF THE LIQUIDATED DAMAGES PROVISION AT OR PRIOR TO THE TIME EACH EXECUTED THIS AGREEMENT. DEVELOPER'S INITIALS: CITY'S INITIALS: 3.11 Tax Credit Regulatory Agreement. Notwithstanding anything contained in this Agreement to the contrary, if and when the Site is subject to the requirements of the Tax Credit Program and there is a conflict between the requirements of the Tax Credit Program and the provisions set forth in this Agreement, then the provisions of the Tax Credit Program shall prevail. That notwithstanding, the fact that this Agreement and the Tax Credit Program provide for greater, lesser or different obligations or requirements shall not be deemed a conflict unless the applicable provisions are inconsistent and could not be simultaneously enforced or performed. 3.12 Inapplicability until the commencement of the Term. Notwithstanding anything to the contrary contained herein, Developer shall not be bound by the requirements of this Section 3 until the commencement of the Term. 882/036753-0123 2765748.6 al 1/16/15 —g- 25-111 4.0 MAINTENANCE. 4.1 Maintenance Obligation. Developer agrees to and shall maintain all interior and exterior improvements, including landscaping, on the Site in a first class condition and repair (and, as to landscaping, in a healthy condition) and in accordance with all of the permits and approvals for the Project, and all other applicable laws, rules, ordinances, orders, and regulations of all federal, state, county, municipal, and other governmental agencies and bodies having or claiming jurisdiction and all their respective departments, bureaus, and officials. Developer shall make all repairs and replacements necessary to keep the improvements in good condition and repair and shall promptly eliminate all graffiti and replace dead and diseased plants and landscaping with comparable approved materials. In the event that Developer breaches any of the covenants contained in this Section and Developer does not commence to cure such breach within thirty (30) calendar days after written notice from City, and after commencing the cure to diligently prosecute such cure to completion, then City, in addition to whatever other remedy it may have at law or in equity, shall have the right, but not the obligation, to enter upon the Site and perform all acts and work necessary to protect, maintain, and preserve the improvements and landscaped areas on the Site, and to attach a lien on the Site, or to assess the Site, in the amount of the expenditures arising from such acts and work of protection, maintenance, and preservation by City and/or costs of such cure which amount shall be promptly paid by Developer to City upon demand. 4.2 Lien. If the costs incurred pursuant to Section 4.1 are not reimbursed within thirty (30) calendar days after Developer's receipt of notice thereof, or if Developer fails to timely pay other sums required to be paid to City under this Agreement when due (after notice and an opportunity to cure, as set forth in Section 10 or Section 11 (as applicable)), the same shall be deemed delinquent. Any and all delinquent amounts, together with reasonable attorney's fees, shall be a lien and charge, with power of sale, upon the property interests of Developer, and the rents, issues and profits of such property. City may bring an action at law against Developer to pay any such sums or foreclose the lien against Developer's property interests. Any such lien may be enforced by sale by the City following recordation of a Notice of Default of Sale given in the manner and time required by law as in the case of a deed of trust; such sale to be conducted in accordance with the provisions of Section 2924, et SeMc ., of the California Civil Code, applicable to the exercise of powers of sale in mortgages and deeds of trust, or in any other manner permitted by law. No lien recorded by City pursuant to this Section 4.2 shall defeat or render invalid the lien of any senior mortgage or deed of trust. 5.0 MANAGEMENT. 5.1 Gross Mismanagement; Requirement to Replace Property Manager. In the event of "Gross Mismanagement" (as that term is defined below) of the Project, City shall have the authority to require that such Gross Mismanagement cease immediately, and further to require the immediate replacement of the property manager. City shall provide written notice to Developer of the event(s) of Gross Mismanagement occurring and Developer shall have five (5) calendar days after receipt of such notice to commence to cure, correct, or remedy the event(s) of Gross Mismanagement identified in the City's notice and to notify the City Manager of the steps taken to effect such cure,. correction, or remedy, and upon commencing such cure, correction, or remedy to thereafter diligently prosecute such cure, correction, or remedy to completion. For 8821036753-0123 2765748.6 al 1116/15 -9- 25-112 purposes of this Agreement the term "Gross Mismanagement" shall mean management of the Project in a manner which materially violates the terms and/or intention of this Agreement to operate an affordable rental housing complex of the highest standard, and shall include, but is not limited to, the following: 5.1.1 During the Term, knowingly leasing a Unit to an ineligible tenant or tenants whose income exceeds the prescribed levels; 5.1.2 Knowingly allowing the tenants to exceed permitted occupancy levels of two (2) persons per bedroom without taking immediate steps to stop such overcrowding; 5.1.3 During the Term, knowingly allowing a tenant to sublease his or her Unit at a rent that exceeds an Affordable Rent; 5.1.4 Failing to timely maintain the Project and the Site in the manner required by this Agreement or failing to submit complete reports; 5.1.5 Failing to timely submit the reports as required by this Agreement; 5.1.6 Fraud in connection with any document or representation relating to this Agreement or embezzlement of Project monies; 5.1.7 Failing to timely evict any tenant who has materially violated the terms of his or her lease or any other rules or regulations of the Property; and 5.1.9 Failing to fully cooperate with law enforcement in its attempts to maintain a crime -free environment on the Site. 5.2 Qualified Manager. For the extent of the entire Term of this agreement the Property shall be under management of a "Qualified Manager". For the purposes of this Agreement, the term "Qualified Manager" shall mean an experienced property management company with a reputation for honesty and integrity and who has not less than ten (10) years' experience in the operation and management of first-class quality residential properties, and has the financial ability to perform its obligations under a conventional management agreement. 5.3 Operation by the Qualified Manager. The Qualified Manager shall continuously (except for reasonable interruption during repairs, maintenance or renovations and during any delay caused by an event of Force Majeure) during the Term, diligently operate, or cause to be operated, the Project in a first-class manner and as otherwise required by this Agreement. Qualified Manager shall stock adequate working capital, operating equipment, and supplies. 5.4 Management. Developer agrees that at all times during the Term, the Property shall be managed and operated by Qualified Manager. It shall not be deemed a default by Developer under this Agreement if at any time during the Term is shall be determined that the then manager of the Property is not a Qualified Manager so long as the applicable management agreement or contract shall give the Developer the right to terminate said agreement and Developer shall promptly take all reasonable steps to terminate said agreement and secure a Qualified Manager. 882/036753-0123 2765748.6 al 1/16/15 -10- 25-113 5.5 Capital Replacement Reserve. Developer shall, or shall cause the Property Manager to, annually set aside an amount reasonably determined by Developer, or such increased amount required by CTCAC into a capital replacement reserve account (the "Capital Replacement Reserve"). Funds in the Capital Replacement Reserve shall be used for Capital Improvements. As Capital Improvements become necessary, the Capital Replacement Reserve shall be the first source of payment therefor. The non-availability of funds in the Capital Replacement Reserve does not in any manner relieve Developer of the obligation to undertake necessary capital repairs and improvements and to continue to maintain the Site in the manner prescribed in this Agreement. 6.0 COMPLIANCE WITH LAWS; ENVIRONMENTAL MATTERS. 6.1 Compliance With Laws. Developer shall comply with (i) all ordinances, regulations and standards of the City, any regional governmental entity, the State of California, and the federal government applicable to the Site; (ii) all rules and regulations of any assessment district of the City with jurisdiction over the Site; and (iii) all applicable labor standards of California law and federal law; and (iv) the requirements of California law and federal law with respect to the employment of undocumented workers or illegal aliens. 6.2 Indemnity. Developer shall save, protect, defend, indemnify and hold harmless City and the City, in its own capacity, and all of the City's officers, officials, members, employees, agents, and representatives (collectively, the "Indemnified Parties") from and against any and all liabilities, suits, actions, claims, demands, penalties, damages (including, without limitation, penalties, fines and monetary sanctions), losses, costs or expenses (including, without limitation, consultants' fees, investigation and laboratory fees, reasonable attorneys' fees and remedial and response costs) (the foregoing are hereinafter collectively referred to as "Liabilities") which may now or in the future be incurred or suffered by any of the Indemnified Parties by reason of, resulting from, in connection with, or existing in any manner whatsoever as a direct or indirect result of (i) Developer's placement on or under the Site of any Hazardous Materials or Hazardous Materials Contamination, (ii) the escape, seepage, leakage, spillage, discharge, emission or release from the Site occurring on or after the Effective Date of any Hazardous Materials or Hazardous Materials Contamination, or (iii) any Liabilities incurred under any Governmental Requirements relating to the acts described in the foregoing clauses (i) and (ii). For the purposes of this Agreement, unless the context otherwise specifies or requires, the following terms shall have the meanings herein specified: The term "Hazardous Materials" shall mean any substance, material, or waste which is or becomes regulated by any local governmental authority, the City of Newport Beach, the County of Orange, the State of California, a regional governmental authority, or the United States Government, including, but not limited to, any material or substance which is (i) defined as a "hazardous waste," "extremely hazardous waste," or "restricted hazardous waste" under Section 25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the California Health and Safety 882/036753-0123 2765748.6 a11/16/15 -11- 25-114 Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law)), (ii) defined as a "hazardous substance" under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter -Presley -Tanner Hazardous Substance Account Act), (iii) defined as a "hazardous material," "hazardous substance," or "hazardous waste" under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv) defined as a "hazardous substance" under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) petroleum, (vi) friable asbestos, (vii) polychlorinated biphenyls, (viii) listed under Article 9 or defined as "hazardous" or "extremely hazardous" pursuant to Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20, (ix) designated as "hazardous substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C. § 1317), (x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq. (42 U.S.C. § 6903) or (xi) defined as "hazardous substances" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seq. The term "Hazardous Materials Contamination" shall mean the contamination (whether presently existing or hereafter occurring) of the improvements, facilities, soil, groundwater, air or other elements on, in or of the Site by Hazardous Materials, or the contamination of the buildings, facilities, soil, groundwater, air or other elements on, in or of any other property as a result of Hazardous Materials at any time emanating from the Site. The term "Governmental Requirements" shall mean all past, present and future laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the State of California, the County of Orange, the City of Newport Beach, or any other political subdivision in which the Site is located, and any other state, county, city, political subdivision, agency, instrumentality or other entity exercising jurisdiction over the Site. 6.3 Duty to Prevent Hazardous Material Contamination. Developer shall take commercially reasonable action to prevent the release of any Hazardous Materials into the environment. Such precautions shall include compliance with all Governmental Requirements with respect to Hazardous Materials. In addition, Developer shall install and utilize such equipment and implement and adhere to such procedures as are consistent with the standards generally applied by apartment complexes in Orange County, California as respects the disclosure, storage, use, removal, and disposal of Hazardous Materials. 6.4 Obligation of Developer to Remediate Premises. Notwithstanding the obligation of Developer to indemnify the Indemnified Parties pursuant to Section 6.2, Developer shall, at its sole cost and expense, promptly take (i) all actions required by any federal, state, regional, or local governmental agency or political subdivision or any Governmental Requirements and (ii) all actions necessary to make full economic use of the Site for the purposes contemplated by this Agreement and the AHA, which requirements or necessity arise from the presence upon, about or beneath the Site of any Hazardous Materials or Hazardous Materials Contamination. Such actions shall include, but not be limited to, the investigation of the environmental condition of the Site, the preparation of any feasibility studies or reports and the performance of any cleanup, remedial, removal or restoration work. 882/036753-0123 2765748.6 al 1/16/15 —12- 25-115 6.5 Environmental Inquiries. Developer, when it has received any notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, or cease and desist orders related to Hazardous Materials or Hazardous Materials Contamination, or when Developer is required to report to any governmental agency any violation or potential violation of any Governmental Requirement pertaining to Hazardous Materials or Hazardous Materials Contamination, shall concurrently notify the City Manager and provide to him/her a copy or copies, of the environmental permits, disclosures, applications, entitlements or inquiries relating to the Site, the 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 Requirement relating to Hazardous Materials and underground tanks, and Developer shall report to the City Manager, as soon as possible after each incident, any unusual, potentially important incidents. In the event of a responsible release of any Hazardous Materials into the environment, Developer shall, as soon as possible after it becomes aware of the release, furnish to the City Manager a copy of any and all reports relating thereto and copies of all correspondence with governmental agencies relating to the release. Upon request of the City Manager, Developer shall furnish to the City Manager a copy or copies of any and all other environmental entitlements or inquiries relating to or affecting the Site 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. 7.0 INSURANCE. Developer, for the term of this Agreement, shall procure and keep in full force and effect or cause to be procured and kept in full force and effect for the mutual benefit of Developer and City, insurance policies reasonably determined by City and commensurate with industry standards for the area., that are attached hereto and incorporated herein by reference as Exhibit "D." 8.0 OBLIGATION TO REPAIR. 8.1 Obligation to Repair and Restore Damage Due to Casualty Covered by Insurance. Subject to Section 8.3 below, if the Project shall be totally or partially destroyed or rendered wholly or partly uninhabitable by fire or other casualty required to be insured against by Developer, Developer shall, subject to the rights of any senior lenders, promptly proceed to obtain insurance proceeds and take all steps necessary to begin reconstruction and, immediately upon receipt of insurance proceeds, to promptly and diligently commence the repair or replacement of the Project to substantially the same condition in which the Project is required to be maintained pursuant to this Agreement, whether or not the insurance proceeds are sufficient to cover the actual cost of repair, replacement, or restoration, and Developer shall complete the same as soon as possible thereafter so that the Project can continue to be operated and occupied as an affordable housing project in accordance with this Agreement. Subject to extensions of time for "Enforced Delay" events (as defined in Section 22 of this Agreement) occurring after the casualty event, in no event shall the repair, replacement, or restoration period exceed eighteen (18) months from the date Developer obtains insurance proceeds, unless the City Manager, in his reasonable discretion, approves a longer period of time. City shall cooperate with Developer, at no expense to City, in obtaining any governmental permits required for the 882/036753-0123 2765748.6 al 1/16/15 —13 — 25-116 repair, replacement, or restoration and, upon issuance of such permits City shall promptly release control of any insurance proceeds within City's control. If Developer fails to obtain insurance as required by this Agreement Developer shall be obligated to reconstruct and repair any partial or total damage to the Project and improvements located on the site in accordance with this Section 8.1. 8.2 Continued Operations. During any period of repair, Developer shall continue, or cause the continuation of, the operation of the apartment complex on the Site to the extent reasonably practicable from the standpoint of prudent business management. 8.3 Damage or Destruction Due to Cause Not Required to be Covered by Insurance. Subject to the rights of any senior lender, if the improvements comprising the Project are completely destroyed or substantially damaged by a casualty for which Developer has not insured against, then Developer shall not be required to repair, replace, or restore such improvements and may elect not to do so by providing City with written notice of election not to repair, replace, or restore within ninety (90) calendar days after such substantial damage or destruction. In such event, (i) Developer shall remove all debris from the Site; (ii) this Agreement shall automatically terminate and City shall cooperate to remove it from title; and (iii) the City, at its option, may compel the Developer to sell the Project pursuant to the terms of the City Deed of Trust subject to the rights of any senior lien holders and recover any amounts provided under this Agreement. Alternatively, City may repair the improvements comprising the Project and recover the costs of said improvements from Developer. As used in this Section 8.3, "substantial damage" shall mean damage or destruction which is fifty percent (50%) or more of the replacement cost of the improvements comprising the Project. In the event Developer does not timely elect not to repair, replace, or restore the improvements as set forth in the first sentence of this Section 8.3, Developer shall be conclusively deemed to have waived its right not to repair, replace, or restore the improvements and thereafter Developer shall promptly commence and complete the repair, replacement, or restoration of the damaged or destroyed improvements in accordance with Section 8.1 above and continue operation of the apartment complex during the period of repair (if practicable) in accordance with Section 8.2 above. 9.0 LIMITATION ON TRANSFERS. The qualifications and identity of the Developer are of particular interest to the City. It is because of these qualifications and identity that the City has entered into the AHA and this Agreement with the Developer. Consequently, no person, whether a voluntary or involuntary successor of Developer, shall acquire any rights or powers under this Agreement nor shall the Developer assign all or any part of this Agreement or the Site without the prior written approval of the City. A voluntary or involuntary sale or transfer of a controlling interest in the Developer or the Site during the term of this Agreement shall be deemed to constitute an assignment or transfer for the purposes of this Article 9.0, and the written approval of the City shall be required prior to effecting such an assignment or transfer. Furthermore, any transaction by which Developer undergoes a merger or other reorganization, including a sale of all or substantially all of its assets, wherein Developer is not the surviving corporation (or the stock holders of Developer immediately before the merger or reorganization do not retain control of the surviving corporation) shall be deemed, for purposes of the foregoing, a transfer of this Agreement. If Developer is or becomes a publicly traded entity, any sale or other transfer of any outstanding 882/036753-0123 2765748.6 al 1/16/15 -14- 25-117 stock of, or limited partnership interests in. Developer shall not be deemed an assignment within the meaning of this Article 9.0 unless said sale or other transfer is made by a person or entity owning a controlling interest in Developer and results in a change in the person(s) or entity(ies) having control of Developer. Any purported transfer, voluntarily or by operation of law, except with the prior written consent of the City, shall be null and void. During the term of this Agreement the Developer shall not, except as permitted by this Agreement, assign or attempt to assign this Agreement or any rights or duties herein, nor make any total or partial sale, transfer, conveyance, or assignment of the whole or any part of the Site or any of the improvements thereon, without the prior written approval of the City. The consent by City to any transfer, conveyance, or assignment shall not constitute a waiver of the necessity for such consent to any subsequent transfer, conveyance, or assignment. This prohibition against assigning shall be construed to include a prohibition against any sale, hypothecation, transfer of possession, or any assignment or subleasing by operation of law or otherwise. City shall be deemed to be reasonable in not granting its consent if the proposed purchaser, transferee, or assignee fails to meet all of the following criteria: a. the proposed purchaser, transferee, or assignee, or, if the proposed purchaser, transferee, or assignee is a wholly owned subsidiary, its parent, or the constituent general partners of the proposed purchaser, transferee, or assignee shall have a net worth at least equal to the greater of (i) Ten Million Dollars ($10,000,000.00) (increased each five (5) years from the Commencement Date by the percentage of any increase over such period in the Consumer Price Index for All Urban Consumers, Los Angeles -Riverside -Orange County, CA, All Items, published by the Bureau of Labor Statistics, Department of Labor), or (ii) ten percent (10%) of the fair market value of the Project. The successor or most nearly comparable index published by some other brand or department of the United States Government shall be used if said Bureau shall cease to publish the Consumer Price Index. For purposes of determining the fair market value of the Project, such value shall be conclusively determined by the purchase price to be paid by the proposed purchaser, transferee, or assignee; b. the proposed purchaser, transferee, or assignee shall either be a Qualified Manager or, if the proposed purchaser, transferee, or assignee is not a Qualified Manager, shall have entered into a binding agreement with a Qualified Manager, to manage the Project, it being acknowledged herein that continued management of the Project by a Qualified Manager is an affirmative obligation of Developer hereunder; and C. the proposed purchaser, transferee, or assignee (or, with respect to a transfer of a Controlling interest under Article 9.0, the person or entity acquiring such Controlling interest) shall have a reputation for honesty, integrity and sound business practices. Notwithstanding any other provision of this Agreement to the contrary, City approval of an assignment of this Agreement or transfer of the Site, or any interest therein, shall not be required in connection with: a. the conveyance or dedication of any portion of the Site to the City, or other appropriate governmental agency, including public utilities, where the granting of such conveyance or easement permits or facilitates the development of the Project on the Site; or 882/036753-0123 2765748.6 al 1/16/15 -1 5 - 25-118 b. any assignment of this Agreement or transfer of the Site, or any of the improvements located thereon, to an entity owned and controlled by Developer or the principals of Developer, including without limitation a limited partnership in which the Developer or an Affiliate of the Developer is a general partner; C. any assignment of the limited partner interests in Developer to an entity owned and controlled by Developer; d. any mortgage, deed of trust, sale and leaseback, or other form of conveyance required for any reasonable method of financing or refinancing the development of the Project on the Site that is contemplated in the Project Budget attached to the AHA or has otherwise been approved by the City Manager, including all direct and indirect costs related thereto; e. transfers resulting from the death or mental or physical incapacity of an individual; f. transfers in trust for the benefit of a spouse, children, grandchildren, or other family member, or for charitable purposes; g. transfers of less than a controlling interest of stock in a publicly -held corporation or of the beneficial interest in any publicly -held partnership or real estate investment trust; h. the admissions of the Qualified Tax Credit Investor to Developer or to a limited partnership in which the Developer or an Affiliate of the Developer is a general partner as a limited partner thereof, i. the transfer by the Qualified Tax Credit Investor to an entity that is an affiliate of the Qualified Tax Credit Investor; and j. the removal by the Qualified Tax Credit Investor of the general partner for a default under the partnership agreement, provided the replacement general partner is reasonably satisfactory to City. Notwithstanding anything in this Section 1.5 to the contrary, any transfer or assignment by Developer or any successor in interest to Developer not requiring the approval by City shall be effective when made but shall not be deemed to relieve Developer or any successor party from its obligations under this Agreement unless and until the transferor and transferee execute and deliver to City, and City acknowledges in writing, an assignment and assumption agreement. Any transfer or assignment by Developer or any successor in interest to Developer requiring the approval by City pursuant to this Section 1.5 shall be effective and shall be deemed to relieve Developer or any successor party from its obligations under this Agreement only upon execution and delivery to the City by the transferor and transferee of an assignment and assumption agreement in a form and with content reasonably acceptable to City. This Article 9.0 shall not be applicable to the leasing of individual Units to Eligible Tenants in accordance with this Agreement, and no assignment and assumption agreement shall be required in connection therewith. 882/036753-0123 2765748.6 al 1116115 -16- 25-119 10.0 EVENTS OF DEFAULT BY DEVELOPER. Subject to extensions of time pursuant to the terms of Section 22, the occurrence of one or more of any of the following events shall constitute an "Event of Default" by Developer hereunder if Developer shall have not cured, corrected, or remedied such failure within, unless a shorter or longer cure period is provided for specific defaults elsewhere in this Agreement, thirty (30) calendar days following the service on Developer of a written notice from City specifying the failure complained of, or if it is not practicable to cure or remedy such failure within such thirty (30) calendar day period (which impracticality shall not apply to monetary defaults), within such longer period as shall be reasonable under the circumstances provided that Developer has commenced to cure within the same thirty (30) day period and has diligently prosecuted such cure to completion: 10.1 Developer shall abandon or surrender the Site; or 10.2 Developer is in default of the City Note and has not cured such default within the cure period applicable to such default as set forth in the City Note; or 10.3 Developer is in default of any of the covenants, terms or provisions of this Agreement or any of the City Agreements; or 10.4 Developer voluntarily files or has involuntarily filed against it any petition under any bankruptcy or insolvency act or law and the same has not been dismissed within sixty (60) calendar days thereafter; or 10.5 Developer is adjudicated a bankrupt; or 10.6 Developer makes a general assignment for the benefit of creditors in violation of the terms of this Agreement or any of the City Agreements. 10.7 Developer is in default, beyond any applicable cure period, of any of the following: (i) any senior indebtedness encumbering the Site, (ii) the Tax Credit Regulatory Agreement, and the other party has not waived the default. 10.8 Developer has not maintained insurance as required by Section 7.0 hereof. 10.9 Developer fails to commence or complete the applicable Scope of Work within the time periods required by the AHA. Notwithstanding anything herein to the contrary, whenever the City shall deliver any notice or demand to the Developer with respect to any breach or default by the Developer of the terms hereunder, the City shall at the same time deliver a copy of such notice or demand to the Qualified Tax Credit Investor, if there is one. The Qualified Tax Credit Investor (insofar as the rights of the City are concerned) shall have the right, at its option, within thirty (30) calendar days after the receipt of the notice, to cure or remedy or commence to cure or remedy any such default. Such cure period shall run concurrently with the Developer's cure period described in this Article 10.0. 8821036753-0123 2765748.6 al 1/16/15 —17- 25-120 11.0 REMEDIES OF CITY. In the event Developer defaults in the performance or observance of any covenant, agreement or obligation of Developer pursuant to this Agreement, and if such default remains uncured for a period of thirty (30) calendar days after written notice thereof shall have been given by City (or such lesser period as may apply under Section 4. 1), or, in the event said default cannot be cured within said time period, Developer has failed to commence to cure such default within the applicable time period and diligently prosecute said cure to completion, then City may declare an "Event of Default" to have occurred hereunder, and, at its option, may take one or more of the following steps: 11.1 With respect to (i) the physical condition of the Site, or (ii) Developer's Gross Mismanagement of the Project, enter the Site and correct or cause to be corrected said default and charge the costs thereof (including costs incurred by City in enforcing this provision) to the account of Developer, which charge shall be due and payable within thirty (30) calendar days after presentation by City of a statement of all or part of said costs, and if such bill is not timely paid then to (A) place a lien on the Site for said amount due plus interest at the maximum legal rate, or (B) foreclose with respect to City's lien on the Site for said amount due plus interest at the maximum legal rate; 11.2 Correct or cause to be corrected said default and pay the costs thereof (including costs incurred by City in enforcing this provision) from the proceeds of any insurance; 11.3 Exercise its right to maintain any and all actions or proceedings at law or suits in equity to compel Developer to correct or cause to be corrected said default, or to foreclose as a result thereof, including without limitation exercise of City's rights under the City Deed of Trust; 11.4 Have a receiver appointed to take possession of Developer's interest in the Site, with power in said receiver to administer Developer's interest in the Site, to collect all funds available to Developer in connection with its operation and maintenance of the Site, and to perform all other actions consistent with Developer's obligations under this Agreement as the court deems proper; 11.5 Terminate this Agreement by written notice to Developer and seek repayment of any remaining principal and accrued interest then owing on the City Note; 11.6 With respect to a default for which foreclosure would be an available remedy, exercise the right to foreclose, or, during the period which is five (5) calendar days prior to the foreclosure sale date, exercise the right to purchase the Project from Developer, for a purchase price equal to the appraised value of the Site less (i) the outstanding amount due under any senior indebtedness, (ii) the amount due under the City Note, (iii) any delinquent taxes and assessments owing on the Site, and (iv) any reasonable costs incurred by City to effect the curing of a default and purchase of the Project, including but not limited to escrow fees and attorney's fees. 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 its 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 another party. 882/036753-0123 2765748.6 al 1/16/15 _ 1 s- 25-121 12.0 NONDISCRIMINATION. Developer 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 any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereof, nor shall Developer, or any person claiming under or through him or her, 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 Site, or any part thereof. The foregoing covenants shall run with the land. Developer agrees for itself and any successor in interest that Developer shall refrain from restricting the rental, sale, or lease of any portion of the Site, or contracts relating to the Site, on the basis of race, color, creed, religion, sex, marital status, ancestry, or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: i) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators, 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 any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any 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 premises herein conveyed. The foregoing covenants shall run with the land." ii) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, 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 any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, 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, sublessees, subtenants, or vendees in the premises herein leased." iii) In contracts: "There shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 882/036753-0123 2765748.6 al 1/16/15 —19- 25-122 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises which are the subject of this agreement, nor shall the grantee or any person claiming under or through him or her, establish or permit any 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 premises herein conveyed. The foregoing covenants shall run with the land." The covenants established in this Agreement shall, without regard to technical classification and designation, be binding for the benefit and in favor of the City, its successors and assigns, the City and any successor in interest to the Site, together with any property acquired by the Developer pursuant to this Agreement, or any part thereof. The covenants against discrimination shall remain in effect in perpetuity. 13.0 COVENANTS TO RUN WITH THE LAND. Developer hereby subjects the Site to the covenants, reservations, and restrictions set forth in this Agreement. City and Developer hereby declare their express intent that all such covenants, reservations, and restrictions shall be deemed covenants running with the land, and shall pass to and be binding upon the Developer's successors in title to the Site; provided, however, that on the termination of this Agreement said covenants, reservations and restrictions shall automatically expire. All covenants established in this Agreement shall, without regard to technical classification or designation, be binding for the benefit of the City, and such covenants shall run in favor of the City for the entire term of this Agreement, without regard to whether the City is or remains an owner of any land or interest therein to which such covenants relate. Each and every contract, deed or other instrument hereafter executed covering or conveying the Site or any portion thereof shall conclusively be held to have been executed, delivered and accepted subject to such covenants, reservations, and restrictions, regardless of whether such covenants, reservations, and restrictions are set forth in such contract, deed or other instrument. City and Developer hereby declare their understanding and intent that the burden of the covenants set forth herein touch and concern the land in that Developer's legal interest in the Site is rendered less valuable thereby. City and Developer further hereby declare their understanding and intent that the benefit of such covenants touch and concern the land by enhancing and increasing the enjoyment and use of the Project by Eligible Tenants, the intended beneficiaries of such covenants, reservations, and restrictions, and by furthering the public purposes for which the City was formed. Developer, in exchange for the City entering into the AHA, hereby agrees to hold, sell, and convey the Site subject to the terms of this Agreement. Developer also grants to the City the right and power to enforce the terms of this Agreement against the Developer and all persons having any right, title or interest in the Site or any part thereof, their heirs, successive owners and assigns. The covenants set forth in this Agreement shall remain in effect until the expiration of the Term. 8821036753-0123 2765748.6 al 1/16/15 -20- 25-123 14.0 INDEMNIFICATION. Developer agrees for itself and its successors and assigns to indemnify, defend, and hold harmless the Indemnified/Released Parties from and against any loss, liability, claim, or judgment relating in any manner to the Project excepting only any such loss, liability, claim, or judgment arising out of the intentional wrongdoing or gross negligence of any of the Indemnified/Released Party. 15.0 UTILITIES AND TAXES. Developer shall remain fully obligated for the payment of (i) real and personal property taxes and assessments in connection with the Site, and (ii) all charges for all utilities serving the Site for which the tenants of the Units are not responsible. 16.0 NO ATTORNEYS' FEES. In the event that a party to this Agreement brings an action against the other party hereto by reason of the breach of any condition, covenant, representation or warranty in this Agreement, or otherwise arising out of this Agreement, the prevailing party in such action shall not be entitled to recover from the other party its attorney's fees and costs, including expert witness fees, any attorney's fees on any appeal, and all other costs for investigating such action, including the conducting of discovery. 17.0 AMENDMENTS. The Developer and the City agree to mutually consider reasonable requests for amendments to this Agreement which may be made by either of the parties hereto, or lending institutions, provided such requests are consistent with this Agreement and would not substantially alter the basic business terms included herein. The City Manager shall have the authority to approve, on behalf of the City, amendments to this Agreement that would not substantially alter the basic business terms or substantially increase the risk or cost to the City. All other amendments shall require the action of the City Council. All amendments, including those authorized to be approved by the City Manager, shall be in writing and shall be signed by authorized representatives of City and Developer. 18.0 NOTICE. Formal notices, demands, and communications between City and Developer shall be sufficiently given if (i) personally delivered, (ii) delivered by a reputable same-day or overnight courier services that provides a receipt showing date and time of delivery, (iii) delivered by United States mail, registered or certified, postage prepaid, return receipt requested, or (iv) delivered by facsimile transmission, provided the original of the faxed communication is delivered within twenty-four (24) hours by one of methods described in clauses (i), (ii), or (iii) of the foregoing. Delivery shall be made to the following addresses: 8821036753-0123 2765748.6 al 1/16/15 —21- 25-124 City of Newport Beach To City 100 Civic Center Drive Newport Beach, California 92660 Attn: City Manager With a copy to: City of Newport Beach 100 Civic Center Drive Newport Beach, California 92660 Attn: Community Development Director Community Development Partners To Borrower: 3416 Via Oporto, Suite 301 Newport Beach, CA 92663 Attn: Eric A. Paine With a copy to: Law Offices of Patrick R. Sabelhaus 1006 Fourth Street, Sixth Floor Sacramento, CA 95814 Attn: Stephen A. Strain, Esq. Notices that are personally delivered, delivered by messenger/courier, or by fax (provided there is compliance with the terms of clause (iv) above) shall be deemed effective upon receipt. Notices delivered by mail shall be deemed effective upon the earlier of actual receipt by the addressee thereof or the expiration of forty-eight (48) hours after depositing in the United States Postal System in the manner described in this Section. Such written notices, demands, and communications may be sent in the same manner to such other addresses as a party may from time to time designate by mail. 19.0 NONLIABILITY OF CITY OFFICIALS. No officer, official, member, employee, agent, or representative of the City shall be personally liable to Developer, or any successor in interest to Developer, in the event of any default or breach by City or for any amount which may become due to Developer or successor or on any obligations under the terms of this Agreement or any of the City Agreements. 20.0 TRANSACTIONS WITH AFFILIATES. Developer shall have the right to enter into contracts with subsidiaries, affiliates and other related entities for the purpose of providing cleaning, maintenance and repair services, insurance policies and other purposes related to the operation of the Site, provided that all such costs and charges are competitive with the costs, charges, rent and other sums which would be paid by or to, as the case may be, an unrelated third party. City acknowledges and agrees that Developer may act as its own general contractor or may engage a third party licensed contractor for the construction of any improvements on the Site and that will be entitled in so doing to earn a commercially reasonable fee. 882/036753-0123 2765748.6 al 1/16/15 -22- 25-125 21.0 SEVERABILITY/WAIVER/INTEGRATION/INTERPRETATION; ENTIRE AGREEMENT. 21.1 Severability. If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions hereof shall not in any way be affected or impaired thereby. 21.2 Waiver. All waivers of the provisions of this Agreement, unless specified otherwise herein, must be in writing and signed by the appropriate authorities of City or Developer, as applicable. No delay or omission by either party hereto in exercising any right or power accruing upon the compliance or failure of performance by the other party hereto under the provisions of this Agreement shall impair any such right or power or be construed to be a waiver thereof. A waiver by either party hereto of a breach of any of the covenants, conditions or agreements hereof to be performed by the other party shall not invalidate this Agreement nor shall it be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions hereof. 21.3 Integration. tion. This Agreement contains the entire Agreement between the parties concerning the subject matter hereof and neither party relies on any warranty or representation not contained in this Agreement. 21.4 Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Agreement or any other rule of construction that might otherwise apply. 21.5. Entire Agreement. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties or their predecessors -in -interest with respect to all or any part of the subject matter hereof. 22.0 ENFORCED DELAY; EXTENSIONS OF TIME. Performance by a party hereunder shall not be deemed to be in default where delays or defaults are due to war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; casualties; supernatural causes; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority litigation; unusually severe weather; inability to secure necessary labor, materials or tools; acts of the other party; acts or the failure to act of a public or governmental agency or entity (except that acts or the failure to act of City shall not excuse performance by City unless the act or failure is caused by the acts or omissions of Developer); or any other causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform. In the event of such a delay (herein "Enforced Delay"), the party delayed shall continue to exercise reasonable diligence to minimize the period of the delay. An extension of time for any such cause shall be limited to the period of the Enforced Delay, and shall commence to run from the time of the commencement of the cause, provided notice by the party claiming such extension is sent to the other party within fifteen (15) calendar days after the sending party has knowledge, or should have obtained knowledge, of the commencement of the cause. Times of performance under this 8821036753-0123 2765748.6 a11/16/15 —23- 25-126 Agreement may also be extended by mutual written agreement by City and Developer. The City Manager shall also have the authority on behalf of City to administratively approve extensions of time. 23.0 GOVERNING LAW. This Agreement shall be governed by the internal laws of the State of California without regard to conflict of law principles. 24.0 NO MERGER. The covenants, terms, and provisions of this Agreement shall not merge with any grant deed or other instrument pertaining to the conveyance of any interest in real property. 25.0 COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall constitute one original and all of which shall be one and the same instrument. 882/036753-0123 2765748.6 al 1/16/15 [Signatures on Following Page] -24- 25-127 IN WITNESS WHEREOF, the City and Developer have executed this Regulatory Agreement and Declaration of Covenants and Restrictions by duly authorized representatives on the date first written hereinabove. Dated: Dated: . 2015 "CITY" CITY OF NEWPORT BEACH, a California municipal corporation and charter city By: Dave Kiff City Manager ATTEST: 2015 By: Leilani I. Brown City Clerk Dated: } 2015 Dated: 882/036753-0123 2765 748 .6 aI1/16 15 2015 APPROVED 1 O FORM: B �.� Y� Aaron C. Harp W% tt11441 ]r City Attorney "DEVELOPER" COMMUNITY DEVELOPMENT PARTNERS, a California corporation Eric A. Paine Chief Executive Officer -25- 25-128 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA )ss. COUNTY OF On , before me, , Notary Public, (here insert name and title of the officer) personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA )ss. COUNTY OF (seal) On , before me, , Notary Public, (here insert name and title of the officer) personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature 882/036753-0123 2765748.6 all/16/15 -26- (seal) 25-129 EXHIBIT "A" LEGAL DESCRIPTION OF SITE All that certain real property situated in the County of Orange, State of California, commonly known as 6001 Coast Boulevard and described as follows: Lots 11, 12 and 13 in Block 160 of River Section, Newport Beach, in the City of Newport Beach, County of Orange, State of California, as shown on a map recorded in Book 4, Page 25 of Miscellaneous Maps, in the office of the County Recorder of said County. EXCEPT therefrom Lot 11 all oil, gas, minerals and other hydrocarbon substances lying below a depth shown below but with no right of surface entry, as provided in the deeds of record Depth: 50 feet EXCEPT therefrom Lot 13 all oil, gas, minerals and other hydrocarbon substances lying below a depth shown below but with no right of surface entry, as provided in the deeds of record Depth: 50 feet EXCEPT therefrom Lot 12 all oil, gas, minerals and other hydrocarbon substances lying below a depth shown below but with no right of surface entry, as provided in the deeds of record Depth: 400 feet Assessor's Parcel Number: 045-114-15 8821036753-0123 2765748.6 al 1/16/15 —27- 25-130 882/036753-0123 2765748.6 al 1116/15 EXHIBIT `B" LEASE RIDER [See following page] INM 25-131 COMMUNITY DEVELOPMENT PARTNERS AFFORDABLE HOUSING PROJECT Lease Rider RESIDENT: (if there is more than one adult occupant, each person must sign the rider) LEASE DATE: UNIT NO.: The undersigned tenant(s) hereby certify and agree as follows: 1. Income Certification. The attached income certification is true, correct and complete. Uwe agree to provide a similar certification annually upon request during the term of my occupancy. 2. Employer Verification. The landlord or property manager has my permission to verify my/our income from any sources of income Uwe receive. 3. False Statements. If the income certification and/or lease application submitted by me/us is false, or if Uwe fail to provide annual certifications, the landlord or property manager will have the right to terminate my/our lease and recover possession of my/our unit. Uwe understand that the landlord and property manager are relying on this income certification and the related third -party income and asset verifications in accepting me/us as a tenant, and the landlord or property manager will be seriously harmed if my/our income does not qualify the unit for the affordable housing program. 4. This rider shall be considered as part of my/our lease. Date: Tenant 882/036753-0123 2765748.6 al 1/16/15 -1- Tenant Tenant Tenant 25-132 TENANT INCOME CERTIFICATION Effective Date: ❑ Initial Certification ❑ Recertification ❑ Other Move -In Date: (MM-DD-YYYY) PART I - DEVELOPMENT DATA Property Name: County: TCAC# CA- BIN #: Address: Unit Number: # Bedrooms: Square Footage: PART H. HOUSEHOLD COMPOSITION ❑ Vacant (Check if unit was vacant on December 31 of the Effective Date Year) HH Mbr # Last Name First Name Middle Initial Relationship to Head of Household Date of Birth (MM/DD/YYYY) FIT Student (Y or N) Last 4 digits of Social Security # 1 HEAD 2 TOTALS: $ Enter Column (H) Total Passbook Rate If over $5000 $ X 0.06% _ (J) Imputed Income Enter the greater of the total of column I, or J: imputed income TOTAL INCOME FROM ASSETS (K) $ $ $ 3 4 5 6 7 PART III. GROSS ANNUAL INCOME (USE ANNUAL AMOUNTS) HH (A) (B) (C) (D) Mbr # Employment or Wage Soc. Security/Pensions Public Assistance Other Income TOTALS $ $ $ $ Add totals from (A) through (D), above TOTAL INCOME (E): $ PART IV. INCOME FROM ASSETS HH (F) Mbr # Type of Asset (G) (H) C/I Cash Value of Asset (I) Annual Income from Asset TOTALS: $ Enter Column (H) Total Passbook Rate If over $5000 $ X 0.06% _ (J) Imputed Income Enter the greater of the total of column I, or J: imputed income TOTAL INCOME FROM ASSETS (K) $ $ $ (L) Total Annual Household Income from all Sources [Add (E) + (K)] $ HOUSEHOLD CERTIFICATION & SIGNATURES The information on this form will be used to determine maximum income eligibility. Uwe have provided for each person(s) set forth in Part II acceptable verification of current anticipated annual income. Uwe agree to notify the landlord immediately upon any member of the household moving out of the unit or any new member moving in. Uwe agree to notify the landlord immediately upon any member becoming a full time student. Under penalties of perjury, Uwe certify that the information presented in this Certification is true and accurate to the best of my/our knowledge and belief. The undersigned further understands that providing false representations herein constitutes an act of fraud. False, misleading or incomplete information may result in the termination of the lease agreement. Signature Signature (Date) Signature (Date) Signature (Date) (Date) 25-133 PART V. DETERMINATION OF INCOME ELIGIBILITY I TOTAL ANNUAL HOUSEHOLD Unit Meets Federal INCOME FROM ALL SOURCES: Income Restriction at: From item (L) on page 1 $ ❑ 60% ❑ 50% Unit Meets Deeper Targeting Income Current Federal LIHTC Income Limit per Restriction at: Family Size: $ ❑ Other % Household Income as of Move -in: $ RECERTIFICATION ONLY: Current Federal LIHTC Income Limit x 140%: Household Income exceeds 140% at recertification: ❑ Yes ❑No Household Size at Move -in: PART VIII. PROGRAM TYPE Mark the program(s) listed below (a. through e.) for which this household's unit will be counted toward the property's occupancy requirements. Under each program marked, indicate the household's income status as established by this certification/recertification. a. Tax Credit ❑ b. HOME ❑ c. Tax Exempt ❑ d. AHDP ❑ e. ❑ (Name of Program) See Part V above. Income Status Income Status Income Status ❑ < 50% AMGI ❑ 50% AMGI ❑ 50% AMGI Income Status ❑ < 60% AMGI ❑ 60% AMGI ❑ 80% AMGI ❑ ❑ < 80% AMGI ❑ 80% AMGI ❑ OI** ❑ OI** ❑ OI** ❑ OI** "Upon recertification household was determined over -income OI) according to eligibility requirements of the program(s)) marked above. SIGNATURE OF OWNER/REPRESENTATIVE Based on the representations herein and upon the proof and documentation required to be submitted, the individual(s) named in Part II of this Tenant Income Certification is/are eligible under the provisions of Section 42 of the Internal Revenue Code, as amended, and the Land Use Restriction Agreement (if applicable), to live in a unit in this Project. TURE OF OWNER/REPRESENTATIVE DATE 2 Tenant Income Certification (January 2015) 25-134 PART VI. RENT Tenant Paid Monthly Rent: $ Federal Rent Assistance: $ *Source: Monthly Utility Allowance: $ Non -Federal Rent Assistance: $_ (*0-8) Other Monthly Non -optional charges: $ Total Monthly Rent Assistance: $ GROSS MONTHLY RENT FOR UNIT: *Source of Federal Assistance (Tenant paid rent plus Utility Allowance & 1 **HUD Multi -Family Project Based Rental Assistance (PBRA) other non -optional charges) $ 2 Section 8 Moderate Rehabilitation 3 Public Housing Operating Subsidy Maximum Federal LIHTC Rent Limit for 4 HOME Rental Assistance this unit: $ 5 HUD Housing Choice Voucher (HCV), tenant -based 6 HUD Project -Based Voucher (PBV) Unit Meets Federal Rent Restriction at: ❑ 60% ❑ 50% 7 USDA Section 521 Rental Assistance Program 8 Other Federal Rental Assistance 0 Missing Unit Meets Deeper Targeting Rent Restriction at: ❑ Other: % ** (PBRA) Includes: Section 8 New Construction/Substantial Rehabilitation; Section 8 Loan Management; Section 8 Property Disposition; Section 202 Project Rental Assistance Contracts (PRAC) PART VII. STUDENT STATUS *Student Explanation: ARE ALL OCCUPANTS FULL TIME STUDENTS? If yes, Enter student explanation* I AFDC / TANF Assistance (also attach documentation) 2 Job Training Program ❑ yes ❑ no 3 Single Parent/Dependent Child 4 Married/Joint Return Enter 5 Former Foster Care I-5 PART VIII. PROGRAM TYPE Mark the program(s) listed below (a. through e.) for which this household's unit will be counted toward the property's occupancy requirements. Under each program marked, indicate the household's income status as established by this certification/recertification. a. Tax Credit ❑ b. HOME ❑ c. Tax Exempt ❑ d. AHDP ❑ e. ❑ (Name of Program) See Part V above. Income Status Income Status Income Status ❑ < 50% AMGI ❑ 50% AMGI ❑ 50% AMGI Income Status ❑ < 60% AMGI ❑ 60% AMGI ❑ 80% AMGI ❑ ❑ < 80% AMGI ❑ 80% AMGI ❑ OI** ❑ OI** ❑ OI** ❑ OI** "Upon recertification household was determined over -income OI) according to eligibility requirements of the program(s)) marked above. SIGNATURE OF OWNER/REPRESENTATIVE Based on the representations herein and upon the proof and documentation required to be submitted, the individual(s) named in Part II of this Tenant Income Certification is/are eligible under the provisions of Section 42 of the Internal Revenue Code, as amended, and the Land Use Restriction Agreement (if applicable), to live in a unit in this Project. TURE OF OWNER/REPRESENTATIVE DATE 2 Tenant Income Certification (January 2015) 25-134 PART IX. SUPPLEMENTAL INFORMATION FORM The California Tax Credit Allocation Committee (CTCAC) requests the following information in order to comply with the Housing and Economic Recovery Act (HERA) of 2008, which requires all Low Income Housing Tax Credit (LIHTC) properties to collect and submit to the U.S. Department of Housing and Urban Development (HUD), certain demographic and economic information on tenants residing in LIHTC financed properties. Although the CTCAC would appreciate receiving this information, you may choose not to furnish it. You will not be discriminated against on the basis of this information, or on whether or not you choose to furnish it. If you do not wish to furnish this information, please check the box at the bottom of the page and initial. Fnter hnth Ethnicity and Race codec for each household member (see below for codes) TENANT DEMOGRAPHIC PROFILE HH Mbr # Last Name First Name Middle Initial Race Ethnicity Disabled 1 2 3 4 5 6 7 The Following Race Codes should be used: 1— White — A person having origins in any of the original people of Europe, the Middle East or North Africa. 2 — Black/African American — A person having origins in any of the black racial groups of Africa. Terms such as "Haitian" or "Negro' apply to this category. 3 — American Indian/Alaska Native — A person having origins in any of the original peoples of North and South America (including Central America), and who maintain tribal affiliation or community attachment. 4 — Asian — A person having origins in any of the original peoples of the Far East, Southeast Asia, or the Indian subcontinent including, for example, Cambodia, China, India, Japan, Korea, Malaysia, Pakistan, the Philippine Islands, Thailand, and Vietnam. 5 — Native Hawaiian/Other Pacific Islander — A person having origins in any of the original peoples of Hawaii, Guam, Samoa, or other Pacific Islands. 6 — Other 7 — Did not respond. (Please initial below) Note: Multiple racial categories may be indicated as such: 31— American Indian/Alaska Native & White, 41— Asian & White, etc. The Following Ethnicity Codes should be used: 1— Hispanic — A person of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin, regardless of race. Terms such as "Latino' or "Spanish Origin" apply to this category. 2 —Not Hispanic— A person not of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin, regardless of race. 3 — Did not respond. (Please initial below) Disability Status: 1— Yes If any member of the household is disabled according to Fair Housing Act definition for handicap (disability): A physical or mental impairment which substantially limits one or more major life activities; a record of such an impairment or being regarded as having such an impairment. For a definition of "physical or mental impairment' and other terms used, please see 24 CFR 100.201, available at http://www.fairhousin2.com/index.cfm?method=page.display&pageID=465 . • "Handicap" does not include current, illegal use of or addiction to a controlled substance. An individual shall not be considered to have a handicap solely because that individual is a transvestite. 2—No 3 — Did not respond (Please initial below) 0 Resident/Applicant: I do not wish to furnish information regarding ethnicity, race and other household composition. (Initials) (HH#) 5. Tenant Income Certification (January 2015) 25-135 INSTRUCTIONS FOR COMPLETING TENANT INCOME CERTIFICATION This form is to be completed by the owner or an authorized representative. Part I - Development Data Enter the type of tenant certification: Initial Certification (move -in), Recertification (annual recertification), or Other. If other, designate the purpose of the recertification (i.e., a unit transfer, a change in household composition, or other state -required recertification). Effective Date Enter the effective date of the certification. For move -in, this should be the move -in date. For annual income recertification's, this effective date should be no later than one year from the effective date of the previous (re)certification. Move -In Date Enter the most recent date the household tax credit qualified. This could be the move -in date or in an acquisition rehab property, this is not the date the tenant moved into the unit, it is the most recent date the management company income qualified the unit for tax credit purposes. Property Name Enter the name of the development. County Enter the county (or equivalent) in which the building is located. TCAC# Enter the project number assigned to the property by TCAC. Please include hyphens between the state abbreviation, four digit allocating year, and project specific number. For example: CA -2010-123 BIN # Enter the building number assigned to the building (from IRS Form 8609). Address Enter the physical address of the building, including street number and name, city, state, and zip code. Unit Number Enter the unit number. # Bedrooms Enter the number of bedrooms in the unit. Square Footage Enter the square footage for the entire unit. Vacant Unit Check if unit was vacant on December 31 of requesting year. For example, for the collection of 2011 data, this would refer to December 31, 2011. Part II - Household Composition List all occupants of the unit. State each household member's relationship to the head of household by using one of the following definitions: H Head of Household S Spouse U Unborn Child/Anticipated A Adult Co -Tenant O Other Family Member Adoption or Foster C Child F Foster child(ren)/adult(s) L Live-in Caretaker N None of the above Date of Birth Enter each household member's date of birth Student Status Enter "Yes" if the household member is a full-time student or "NO" if the household member is not a full-time student. Last Four Digits of Social Security For each tenant 15 years of age or older, enter the last four digits of the social security Number number or the last four digits of the alien registration number. If the last four digits of SSN or alien registration is missing, enter 0000. For tenants under age 15, social security number not required, although please enter 0000. If there are more than 7 occupants, use an additional sheet of paper to list the remaining household members and attach it to the certification. 4 Tenant Income Certification (January 2015) 25-136 Part III - Annual Income See HUD Handbook 4350.3 for complete instructions on verifying and calculating income, including acceptable forms of verification. From the third party verification forms obtained from each income source, enter the gross amount anticipated to be received for the twelve months from the effective date of the (re)certification. Complete a separate line for each income -earning member. List each respective household member number from Part II. Include anticipated income only if documentation exists verifying pending employment. If any adult states zero -income, please note "zero' in the columns of Part III. Column (A) Enter the annual amount of wages, salaries, tips, commissions, bonuses, and other income from employment; distributed profits and/or net income from a business. Column (B) Enter the annual amount of Social Security, Supplemental Security Income, pensions, military retirement, etc. Column (C) Enter the annual amount of income received from public assistance (i.e., TANF, general assistance, disability, etc.). Column (D) Enter the annual amount of alimony, child support, unemployment benefits, or any other income regularly received by the household. Row (E) Add the totals from columns (A) through (D), above. Enter this amount. Part IV - Income from Assets See HUD Handbook 4350.3 for complete instructions on verifying and calculating income from assets, including acceptable forms of verification. From the third party verification forms obtained from each asset source, list the gross amount anticipated to be received during the twelve months from the effective date of the certification. If individual household member income is provided, list the respective household member number from Part II and complete a separate line for each member. Column (F) List the type of asset (i.e., checking account, savings account, etc.) Column (G) Enter C (for current, if the family currently owns or holds the asset), or I (for imputed, if the family has disposed of the asset for less than fair market value within two years of the effective date of (re)certification). Column (H) Enter the cash value of the respective asset. Column (I) Enter the anticipated annual income from the asset (i.e., savings account balance multiplied by the annual interest rate). TOTALS Add the total of Column (H) and Column (I), respectively. If the total in Column (H) is greater than $5,000, you must do an imputed calculation of asset income. Enter the Total Cash Value, multiply by 0.06% and enter the amount in (J), Imputed Income. Row (K) Enter the greater of the total in Cohimn (1) or (J) Row (L) Total Annual Household Income From all Sources Add (E) and (K) and enter the total HOUSEHOLD CERTIFICATION AND SIGNATURES After all verifications of income and/or assets have been received and calculated, each household member age 18 or older must sign and date the Tenant Income Certification. For move -in, it is recommended that the Tenant Income Certification be signed no earlier than 5 days prior to the effective date of the certification. Part V — Determination of Income Eligibility Total Annual Household Income from Enter the number from item (L). all Sources Current LIHTC Income Limit per Enter the Current Move -in Income Limit for the household size — specifically, the max Family Size income limit for the federal 50% or 60% set aside. Household Income at Move -in For recertifications only. Enter the household income from the move -in certification. Tenant Income Certification (January 2015) 25-137 Household Size at Move -in Enter the number of household members from the move -in certification. Current Federal LIHTC Income Limit x For recertifications only. Multiply the current LIHTC Maximum Move -in Income Limit by 140% 140% and enter the total. 140% is based on the Federal Set -Aside of 20/50 or 40/60, as Source of Federal Rent Assistance elected by the owner for the property, not deeper targeting elections of 30%, 40%, 450/0, Monthly Utility Allowance 50%, etc. Below, indicate whether the household income exceeds that total. If the Gross Other Monthly Non -Optional Charges Annual Income at recertification is greater than 140% of the LIHTC Income Limit per Family Size at Move -in date (above), then the available unit rule must be followed. Unit Meets Federal Income Restriction Check the appropriate box for the income restriction that the household meets according to at what is required by the federal set-aside(s) for the project. Unit Meets Deeper Targeting Income If your agency requires an income restriction lower than the federal limit, enter the percent Restriction required. Maximum LIHTC Rent Limit for this Part VI - Rent Tenant Paid Monthly Rent Enter the amount the tenant pays toward rent (not including rent assistance payments such as Section 8). Federal Rent Assistance Enter the amount of rent assistance received from a federal program, if any. Non -Federal Rent Assistance Enter the amount of non-federal rent assistance received, if any. Total Monthly Rent Assistance Enter the amount of total rent assistance received, if any. Source of Federal Rent Assistance If federal rent assistance is received, indicate the single program source. Monthly Utility Allowance Enter the utility allowance. If the owner pays all utilities, enter zero. Other Monthly Non -Optional Charges Enter the amount of non -optional charges, such as mandatory garage rent, storage lockers, charges for services provided by the development, etc. Gross Monthly Rent for Unit Enter the total of Tenant Paid Rent plus Utility Allowance and other non -optional charges. The total may NOT include amounts other than Tenant Paid Rent, Utility Allowances and other non -optional charges. In accordance with the definition of Gross Rent in IRC §42(g)(2)(B), it may not include any rent assistance amount. Maximum LIHTC Rent Limit for this Enter the maximum allowable gross rent for the unit. This amount must be the maximum unit amount allowed by the Current Income Limit per Family Size — specifically, the max rent limit for the federal 50% or 60% set aside. Unit Meets Federal Rent Restriction at Indicate the appropriate rent restriction that the unit meets according to what is required by the federal set-aside(s) for the project. Unit Meets Deeper Targeting Rent If your agency requires a rent restriction lower than the federal limit, enter the percent Restriction at required. Part VII - Student Status If all household members are full time* students, check "yes". Full-time status is determined by the school the student attends. If at least one household member is not a full-time student, check "no." If "Yes" is checked, the appropriate exemption must be listed in the box to the right. If none of the exemptions apply, the household is ineligible to rent the unit. Part VIII — Program Type Mark the program(s) for which this household's unit will be counted toward the property's occupancy requirements. Under each program marked, indicate the household's income status as established by this certification/recertification. If the property does not participate in the HOME, Tax - Exempt Bond, Affordable Housing Disposition, or other housing program, leave those sections blank. Tax Credit See Part V above. HOME If the property participates in the HOME program and the unit this household will occupy will count towards the HOME program set -asides, mark the appropriate box indicting the household's designation. Tax Exempt If the property participates in the Tax Exempt Bond program; mark the appropriate box indicating the household's designation. Tenant Income Certification (January 2015) 25-138 AHDP If the property participates in the Affordable Housing Disposition Program (AHDP), and this household's unit will count towards the set-aside requirements, select the appropriate box to indicate if the household is a VLI, LI or OI (at recertification) household. Other If the property participates in any other affordable housing program, complete the information as appropriate. SIGNATURE OF OWNER/REPRESENTATIVE It is the responsibility of the owner or the owner's representative to sign and date this document immediately following execution by the resident(s). The responsibility of documenting and determining eligibility (including completing and signing the Tenant Income Certification form) and ensuring such documentation is kept in the tenant file is extremely important and should be conducted by someone well trained in tax credit compliance. These instructions should not be considered a complete guide on tax credit compliance. The responsibility for compliance with federal program regulations lies with the owner of the building(s) for which the credit is allowable. PART IX. SUPPLEMENTAL INFORMATION Complete this portion of the form at move -in and at recertification's (only if household composition has changed from the previous year's certification). Tenant Demographic Profile Complete for each member of the household, including minors. Use codes listed on supplemental form for Race, Ethnicity, and Disability Status. Resident/Applicant Initials All tenants who wish not to furnish supplemental information should initial this section. Parent/Guardian may complete and initial for minor child(ren). Tenant Income Certification (January 2015) 25-139 EXHIBIT "C" RESTRICTED UNIT MATRIX Size No. of 30% AMI 40% AMI 50% AMI 60% AMI Units One bedroom 12 6 2 3 882/036753-0123 2765748.6 al 1/16/15 -1- 25-140 EXHIBIT "D" 1. INSURANCE REQUIREMENTS 1.1 Provision of Insurance. Without limiting Developer's indemnification of City, and prior to commencement of Scope of Development under the AHA, Developer shall obtain, provide and maintain at its own expense during the term of this Agreement, policies of insurance of the type and amounts described below and in a form satisfactory to City. Developer agrees to provide insurance in accordance with requirements set forth here. If Developer uses existing coverage to comply and that coverage does not meet these requirements, Developer agrees to amend, supplement or endorse the existing coverage. 1.2 Acceptable Insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance in the State of California, with an assigned policyholders' Rating of A- (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best's Key Rating Guide, unless otherwise approved by the City's Risk Manager. 1.3 Coverage Requirements. 1.3.1 General Liability Insurance. Developer shall maintain commercial general liability insurance, and if necessary umbrella liability insurance, with coverage at least as broad as provided by Insurance Services Office form CG 00 01 covering CGL on an "occurrence" basis, including products and completed operations, property damage, bodily injury and personal & advertising injury with limits no less than $2,000,000 per occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. The City, its officers, officials, employees, and volunteers are to be covered as additional insureds on the CGL policy with respect to liability arising out of work or operations performed by or on behalf of the Developer including materials, parts, or equipment furnished in connection with such work or operations and automobiles owned, leased, hired, or borrowed by or on behalf of the Developer. General liability coverage can be provided in the form of an endorsement to the Developer's insurance (at least as broad as ISO Form CG 20 10, CG 11 85 or both CG 20 10 and CG 20 37 forms if later revisions used). 1.3.2 Property Insurance. Developer shall maintain property insurance against "all risk" coverage for full replacement cost with no coinsurance penalty. Such coverage shall name the City as a loss payee as their interest may appear. 1.3.3 Builder's Risk Insurance. For contracts with property exposures during construction, Developer shall maintain Builders Risk insurance (Course of Construction) insurance utilizing an "all risk" (Special Perils) coverage form, with limits equal to the completed value of the project and no coinsurance penalty provisions. Developer may submit evidence of Builder's Risk insurance in the form of Course of Construction coverage. Such coverage shall name the City as a loss payee as their interest may appear. At the discretion of City, the requirement for such coverage may include additional protection for Earthquake and/or 882/036753-0123 2765748.6 al 1/16/15 -1- 25-141 Flood. City shall be included as an insured on such policy, and Developer shall provide the City with a copy of the policy. 1.4 Other Insurance Requirements. The policies are to contain, or be endorsed to contain, the following provisions: 1.4.1 Waiver of Subrogation. All insurance coverage maintained or procured pursuant to this agreement shall be endorsed to waive subrogation against City, its elected or appointed officers, agents, officials, employees and volunteers or shall specifically allow Developer or others providing insurance evidence in compliance with these requirements to waive their right of recovery prior to a loss. Developer hereby waives its own right of recovery against City, and shall require similar written express waivers and insurance clauses from each of its subcontractors. 1.4.2 Additional Insured Status. All liability policies including general liability, excess liability, pollution liability, and automobile liability, but not including professional liability (if required), shall provide or be endorsed to provide that City and its officers, officials, employees, and agents shall be included as insureds under such policies. 1.4.3 Primary and Non Contributory. All liability coverage shall apply on a primary basis and shall not require contribution from any insurance or self-insurance maintained by City. 1.4.4 Notice of Cancellation. All policies shall provide City with thirty (30) days' notice of cancellation (except for nonpayment for which ten (10) days' notice is required) or nonrenewal of coverage for each required coverage. 1.5 Additional Agreements Between the Parties. The parties hereby agree to the following: 1.5.1 Evidence of Insurance. Developer shall provide certificates of insurance to City as evidence of the insurance coverage required herein, along with a waiver of subrogation endorsement for workers' compensation and other endorsements as specified herein for each coverage. Insurance certificates and endorsement must be approved by City's Risk Manager prior to commencement of development. Current certification of insurance shall be kept on file with City at all times during the term of this contract. City reserves the right to require complete, certified copies of all required insurance policies, at any time. 1.5.2 Enforcement of Contract Provisions. Developer acknowledges and agrees that any actual or alleged failure on the part of the City to inform Developer of non-compliance with any requirement imposes no additional obligations on the City nor does it waive any rights hereunder. 1.5.3 Requirements not Limiting. Requirements of specific coverage features or limits contained in this Section are not intended as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given 882/036753-0123 2765748.6 a11/16/15 —2- 25-142 issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type. 1.5.4 Self-insured Retentions. Any self-insured retentions must be declared to and approved by City. City reserves the right to require that self-insured retentions be eliminated, lowered, or replaced by a deductible. Self-insurance will not be considered to comply with these requirements unless approved by City. 1.5.5 City Remedies for Non Compliance. If Developer or any subcontractor fails to provide and maintain insurance as required herein, then City shall have the right but not the obligation, to purchase such insurance, to terminate this agreement, or to suspend Developer's right to proceed until proper evidence of insurance is provided. Any amounts paid by City shall, at City's sole option, be deducted from amounts payable to Developer or reimbursed by Developer upon demand. 1.5.6 Timely Notice of Claims. Developer shall give City prompt and timely notice of claims made or suits instituted that arise out of or result from Developer's performance under this Agreement, and that involve or may involve coverage under any of the required liability policies. City assumes no obligation or liability by such notice, but has the right (but not the duty) to monitor the handling of any such claim or claims if they are likely to involve City. 1.5.7 Maintenance of General Liability Coverage. Developer agrees to maintain commercial general liability coverage for a period of ten (10) years after completion of the project or to obtain coverage for completed operations liability for an equivalent period. 1.5.8 Developer's Insurance. Developer shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the work under the Scope of Development as outlined in the AHA. 882/036753-0123 2765748.6 al 1/16/15 —3- 25-143 882/036753-0123 2765748.6 all/16/15 ATTACHMENT NO.8 PROJECT BUDGET [SEE FOLLOWING PAGE] -1- 25-144 PROJECT FINANCING SUMMARY Project Milestone ■ - City Council Project Selection Nov -15 Property Acquisition 1 Bridge Loan Closing Dec -15 VHHP Application Dec -15 VHH P Award Feb -16 Li HTC 9% Application Mar -16 LIHTC 9% Award Jun -16 Construction CornmencelLP Closing Sep -16 Anticipated Construction Completion Jan -17 Stabilisation (Lease -up Complete) Mar -17 Perm Loan Closing (Conversion) Jul -17 8609s Aug -17 Acquisition 3,538,320 Direct Construction Costs 1,109,760 Construction Contingency 110,976 Indirect and Soft Costs 259,211 Developer Fee 386,483 Financing Costs 277,012 Project Reserves 265,607 TOTAL 5,947,369 Tax Credit Equity 2,156,244 ist Mortgage Permanent Debt 1,}60000 City of NB Note 1,975,000 VHHP 600,000 Deferred Developer Fee 56,125 TOTAL 5,947,369 I LIHTC Equity Pricing 1.05 LIHTC Credits to Investor 2,053,566 Construction/Bridge Loan 2,838,558 LIHTC App Tie -Breaker 76.46% TOTAL Units 12 72 73 25-145 882/036753-0123 2765748.6 all/16/15 ATTACHMENT NO.9 PROJECT PRO FORMA [SEE FOLLOWING PAGE] -1- 25-146 30 -YEAR CASH FLOW 1 Bed - T Bath - VASH 6 1,433 2.00% 103,176 105,240 107,344 109,491 111,681 113,915 1 Bed - 1 Bath 2 661 2.00% 15,864 16,181 16,505 16,835 17,172 17,515 1 Bed - 1 Bath 3 836 2.00% 30,096 30,698 31,312 31,938 32,577 33,228 1 Bed - 1 Bath - Non-VASH Vet 1 1,012 2.001, 12,144 12,387 12,635 12,887 13,145 13,408 TOTAL RENTAL INCOME 12 161,280 164,506 167,796 171,152 174,575 178,066 Other Income S 10.00 2.00% 1,440 1,469 1,498 1,528 1,559 1,590 TOTAL POTENTIAL INCOME 162,720 165,974 169,294 172,680 176,133 179,656 Less Vacancy Allowance 5.00% (8,136) (8,299) (8,465) (8,634) (8,807) (8,983) GROSS INCOME 154,584 157,676 160,829 164,046 167,327 170,673 !OPERATING Management Fees (Per Mo) $ 644.10 5.00% 2.00% 7,729 7,884 8,041 8,202 8,366 8,534 Administration $ 589,66 4.58% 3.00% 7,076 7,288 7,507 7,732 7,964 8,203 Payroll S 797.00 6,19% 3.00% 9,564 9,851 10,146 10,451 10,764 11,087 Maintenance S 917.94 7.13% 3.00% 11,015 11,346 11,686 12,037 12,398 12,770 Utilities $ 717.00 5.57% 3.00% 8,604 8,862 9,128 9,402 9,684 9,974 Insurance 1 Taxes S 734.28 5.70% 3.00% 8,811 9,076 9,348 9,628 9,917 10,215 Service Amenities $ 975.00 7.57% 3.00% 11,700 12,051 12,413 12,785 13,168 13,564 Services Reserve 1 CF Reserve S(975.00) -7.57% 3.00% (11700) (12,051) (12,413) (12,785) (13,168) (13564) TOTAL OPER. EXPENSES $4,400 52,800 54,307 55,857 57,452 59,094 60,783 NET OPERATING INCOME 101,784 103,369 104,972 106,593 108,233 109,890 REPLACEMENT RESERVES $300 3.00% 3,600 3,708 3,819 3,934 4,052 4,173 CASH FLOW FOR DSC 98,184 99,661 101,153 102,660 104,181 105,717 DEBT SERVICE Amount Rate DCR Permanent Loan Hard Debt $1,160,000 5.70% 1.17 84,105 84,105 84,105 84,105 84,105 84,105 VHHP Min Payment $600,000 0.42% NIA 2,520 2520 2,520 2,520 2,520 2,520 NET CASH FLOW 11,559 13,035 14,527 16,034 17,555 19,091 MANAGEMENT FEES Amount Incrlyr Cn LP Asst MgmL Fee $3,000 3.00% 3,000 3,090 3,183 3,278 3,377 3,478 MGA Mgmt Fee $3,000 3.00% 3,000 3,090 3,183 3,278 3,377 3,478 CASH FLOW AFTER FEES 5,559 6,855 8,162 9,478 10,802 12,136 'r z u DEFERRED FEE &AGP FEE Amount Inerlyr 0 ©eFerred Fee Payment $56,125 5,559 6,855 8,162 9,478 10,802 12,136 w su AGP (Dev) Incentive Fee $3,000 3.00% - - 3,478 Q CASH FLOW AFTER D D F - - - - (3,478) F• z O CITY OF N B NOTE Amount Rate Year -1 Year -2 Year -3 Year -4 Year -5 Year -6 p Surplus Cash Flaw Payments 51,975,000 0.0% - v NET CASH FLOW - - - (3,478) 25-147 25-148 z m b O 30 -YEAR CASH FLOW r 0 M M INCOMERENTAL N 0 1 Bed - 1 Bath - VASH 116,193 118,517 120,887 123,305 125,771 128,286 130,852 133,469 136,139 m 1 Bed - 1 Bath 17,865 18,223 18,587 18,959 19,338 19,725 20,119 20,522 20,932 0 1 Bed - 1 Bath 33,893 34,571 35,262 35,968 3607 37,421 38,169 38.932 39,711 m 1 Bed - 1 Bath - Non-VASH Vet 13,676 13,950 14,229 14,513 14,803 15,100 15,402 15,710 z 16,024 y TOTAL RENTAL INCOME 181,627 185,260 188,965 192,745 196,599 200,531 204,542 208,623 212,806 0 Other Income 1,622 1,654 1,667 1,721 1,755 1,790 1,826 1,863 T 1,900 0 a TOTAL POTENTIAL INCOME 183,249 186,914 190,652 194,465 198,355 202,322 206,368 210,496 214,706 y Less Vacancy Allowance (9,1623 (9,346) (9,533) (9,723) (9,918) (10,116) (10,318) (10,525) (10,735) GROSS INCOME 174,487 177,568 181,120 184,742 188,437 192,206 196,050 1995971 203,970 OPERATING Management Fees (Per Mo) 8,704 8,878 9,056 9,237 9,422 9,610 9,802 9,999 10,199 Administration 8,449 8,703 8,964 9,233 9,510 9,795 10,089 10,392 10,703 Payroll 11,420 11,763 12,115 12,479 12,853 13,239 13,636 14,045 14,466 Maintenance 13,153 13,547 13,954 14,372 14,804 15,248 15,705 16,176 16,662 Utilities 10,274 10,582 10,899 11,226 11,563 11,910 12,267 12,635 13,014 Insurance 1 Taxes 10,521 10,837 11,162 11,497 11,842 12,197 12,563 12,940 13,328 Service Amenities 13,970 14,390 14,821 15,266 15,724 16,196 16,681 17,182 17,697 Services Reserve 1 CF Reserve (13,970) (14,390) (14,821) (15,266) (15,724) (16,196) (16,681) (17,182) (17,697) TOTAL OPER. EXPENSES 62,521 64,310 66,150 68,044 69,993 71,999 74,063 76,187 78,372 NET OPERATING INCOME 111,565 113,259 114,969 116,698 118,444 120,207 1215987 123,784 125,598 REPLACEMENT RESERVES 4,299 4,428 4,560 4,697 4,838 4,983 5,133 5,287 52445 CASH FLOW FOR DSC 107,267 108,831 110,409 112,001 1132606 115,224 116,854 118,498 1202153 DEBT SERVICE Permanent Loan 1 -lard Debt 84,105 84,105 84,105 84,105 84,105 84,105 84,105 84,105 84,105 VHHP Min Payment 2520 2,520 2,520 2,520 2,520 2,520 2,520 2,520 2,520 NET CASH FLOW 20,641 22,206 23,784 25,375 26,980 28,598 30,229 31,872 33,527 MANAGEMENT FEES LP Asst Mgmt Fee 3,582 3,690 3,800 3,914 4,032 4,153 4,277 4,406 4,538 MGP Mgmt Fee 3,582 3,690 3,800 3,914 4,032 4,153 4,277 4,406 4,538 CASH FLOW AFTER FEES 13,477 14,826 16,183 172547 18,917 205293 21,674 232061 24,452 DEFERRED FEE &AGP FEE Deferred Fee Payment 3,133 - AGP (Dev) Incentive Fee 3,582 3,690 3,800 3,914 4,032 4,153 4,277 4,406 4,538 CASH FLOW AFTER DDF 6,761 11,137 12,383 13,632 142885 16,140 17,397 18,655 19,914 CITY OF NB NOTE Year -7 Year -8 Year -9 Year -10 Year -11 Year -12 Year -13 Year -14 Year -15 Surplus Cash Flow Payments - - - - - NET CASH FLOW 6,761 11,137 12,383 135632 14,885 16,140 17,397 18,655 19,914 25-148 30 -YEAR CASH FLOW I Bed - 1 Bath VASH 1 Bed - i Bath 1 Bed -1 Bath 1 Bed - 1 Bath - Non -VASH Vet 6 2 3 1 1,433 661 836 1,012 2.00°% 2.00% 2.00% 2.00% 138,861 21,351 40,505 16,344 141,639 21,778 41,315 16,671 144,471 22,213 42,142 17,005 147,361 22,658 42,964 17,345 150,308 23,111 43,844 17,692 153,314 23573 44,721 18,045 TOTAL RENTAL INCOME 12 2,048 2,205 217,062 221,403 225,831 230,348 234,955 239,654 Other Income 5 10,00 2.00% 1,938 1,977 2,016 2,057 2,098 2,140 TOTAL POTENTIAL INCOME 219,000 223,386 227,847 232,404 237,052 241,793 Less Vacancy Allowance 5.00% (10,950) (11,169) (11,392) (11,620] (11,853) (12,090) GROSS INCOME 208,050 212,211 216,455 220,784 225,200 229,704 OPERATING EXPENSES Per Unit/Yr %AGI Inprlyr Year -16 Year -17 Year -18 Year -19 Ye�ir-20 Year -21 Management Fees (Per Mo) Administration Payroll Maintenance Utilities Insurance I Taxes Service Amenities Services Reserve I CF Reserve $ 644.10 $ 589,68 $ 797.00 $ 917-94 $ 717.00 S 734-28 $ 975-00 $ (975.00) 5-00% 4.58% 6.19% 7-13% 5.57`0 5-70% 7.579 -7.57°% 2,00% 3.00% 3.00% 3.00% 3.90% 3-00% 3.00% 3-00% 10,402 11,024 14,900 17,161 13,405 13,728 18,228 - 10,611 11,355 15,347 17,676 13,807 14,140 18,775 - 10,823 11,696 15,898 18,207 14,221 14,564 19,338 - 11,039 12,047 16,282 18,753 14,648 15,001 19,918 - 11,269 12,408 16,771 19,315 15,087 15.451 20,516 11,485 12,780 17,274 19,895 15,540 15,914 21,132 TOTAL OPER. EXPENSES $4,400 98,850 101,711 104,656 107,688 110,808 114,020 NET OPERATING INCOME 109,200 110,500 111,799 113,096 114,392 115,684 REPLACEMENT RESERVES 5300 3.00% 5,699 5,777 5,950 6,529 6,313 6,502 CASH FLOW FOR DSC 1035591 1049723 105,848 106,968 108,079 109,182 DEBT SERVICE Permanent Loan Hard Debt VH HP Min Payment Amount $1,160,000 $600,000 Rate 5-70% 0.42% DCR 1.17 NIA 84,105 2,520 84,105 2,520 84,105 2,520 84,105 2,520 84,105 2,520 84,105 2,520 NET CASH FLOW 195486 20,617 215743 22,862 23,974 255077 MANAGEMENT FEES LP Asst MgmL Fee MGP Mgmt Fee Amount $3,000 $3,000 Incrlyr 3.00% 3.00% 4,674 4,674 4,814 4,814 4,959 4,959 5,107 5,107 5,261 5,261 5,418 5,418 CASH FLOW AFTER FEES 10,138 10,989 115826 12,647 13,453 14,240 DEFERRED FEE & AGP FEE Deferred Fee Payment AGP (Demo) Incentive Fee Amount $56,125 53,000 Incrlyr 3-00°-, 4,672 4,814 4,959 5,107 5,261 5,418 CASH FLOW AFTER DDF S,464 6,175 6,867 7,540 8,192 8,822 CITY OF NB NOTE Amount Rate Year -16 Year -17 Year -18 Year -19 Year -20 Year -21 surplus Cash Flow Payments $1,975,000 0-0% 1-36G 1,544 1,717 1,885 2,048 2,205 NET CASH FLOW 4,498 4,631 5,151 5,655 6,144 6,616 is 79 25-149 25-150 Z m T O 30 -YEAR CASH FLOW ti N Q m RENTAL INCOME Ytar-22 Year -23 Year -24 Year -25 Year -26 Year -27 Year -28 Year -29 N Year -30 1 Bed - 1 Bath - VASH 156,380 159,508 162,698 165,952 169,271 172,657 176,110 179,632 183,225 m 1 Bed - 1 Bath 24,045 24,525 25,016 25,516 26,027 26,547 27,078 27,620 28,172 O I Bed - 1 Bath 45,615 46,528 47,458 48,408 49,376 50,363 51,370 52,398 53,446 3- I 1 Sed - 1 Bath - Non-VASH Mst 18,406 18,774 19,150 19,533 19,924 20,322 20,728 21,143 21,566 TOTAL RENTAL INCOME 244,447 249,336 254,322 259,409 264,597 269,889 275,287 280,792 286,408 0 Other income 2,183 2,226 2,271 2,316 2,362 2,410 2,458 2,507 m 2,557 0 TOTAL POTENTIAL INCOME 246,629 251,562 256,593 261,725 266,959 272,299 277,745 283,299 288,965 y Less VacancyAllowance (12,331) (12,578) (12,830) (13,086) (13,348) (13,615) (13,887) (14,165) (14,448) GROSS INCOME 234,298 238,984 243,763 248,639 253,611 258,684 263,857 269,134 274,517 OPERATING EXPENSES Year -22 Wear -23 Year -24 Year -25 Year -26 Year -27 Year -28 Year -29 Year -30 Management Fees (Per Mo) 11,715 11,949 12,188 12,432 12,681 12,934 13,193 13,457 13,726 Administration 13,164 13,559 13,965 14,384 14,816 15,260 15,718 16,190 16,675 Payroll 17,792 18,326 18,875 19,442 20,025 20,626 21,244 21,882 22,538 Maintenance 20,492 21,106 21,740 22,392 23,064 23,756 24,468 25,202 25,958 Utilities 16,006 16,486 16,981 17,490 18,015 18,555 19,112 19,685 20,276 Insurance /Taxes 16,392 16,883 17,390 17,912 18,449 19,002 19,573 20,160 20,765 Service Amenities 21,765 22,418 23,091 23,784 24,497 25,232 25,989 26,769 27,572 Services Reserve 1 CF Reserve - - - - - TOTAL OPER. EXPENSES 117,325 120,728 1245230 127,835 131,546 135,366 339,297 1435344 147,510 NET OPERATING INCOME 1165972 118,256 119,533 120,843 122,065 123,318 124,560 125,790 127,007 REPLACEMENT RESERVES 6,697 6,898 7,105 7,318 7,538 7,764 7,997 8,237 8,484 CASH FLOW FOR PSC 110,275 111,358 112,428 113,485 114,528 115,554 116,563 1175554 118,524 DEBT SERVICE Permanent Loan `lard Debt 84,105 84,105 84,105 84,105 84305 84,105 84,105 84,105 84,105 VH HP Min Payment 2,520 2,520 2,520 2,520 2,520 2,520 2,520 2,520 2,520 NET CASH FLOW 26,170 27,252 28,323 29,380 34,422 31,449 32,458 33,448 34,418 MANAGEMENT FEES LP Asst Mgmt Fee 5,581 5,748 5,921 6,098 6,281 6,470 6,664 6,864 7,070 MGP Mgmt Fee 5,581 5,748 5,921 6,098 6,281 6,470 6,664 6,864 7,070 CASH FLOW AFTER FEES 155008 15,756 16,481 17,183 17,860 18,509 19,130 19,723 245279 DEFERRED FEE & AGP FEE DeFerred Fee Payment - - - AGP CDev) Incentive Fee 5,581 5,748 5,921 6,098 6.281 6,470 6,664 6,854 7,070 CASH FLOW AFTER DAF 9,427 10,007 145560 11,085 11,578 12,040 125466 12,857 13,209 CITY OF NB NOTE Year -22 Year -23 Year -24 Year -25 Year -26 Year -27 Year -28 Year -29 Year -30 Surplus Cash Flow Payments 2,357 2,502 2,640 2,771 2,895 3,010 3,117 2"..1:1 NET CASH FLOW 7,070 75506 7,920 8,314 8,684 9,030 9,350 9,643 9,907 25-150 8821036753-0123 2765748.6 al 1/16/15 ATTACHMENT NO. 10 NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY [SEE FOLLOWING DOCUMENT] -1- 25-151 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Newport Beach 100 Civic Center Drive Newport Beach, California 92660 Attn: Citv Manap-er Exempt From Recording Fee Pursuant to Government Code § 27383 NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY Important notice to owners, purchasers, tenants, lenders, brokers, escrow and title companies, and other persons, regarding affordable housing restrictions on the real property described in this Notice: Affordable housing restrictions have been recorded with respect to the property described below (referred to in this Notice as the "Property") which require that the Property be developed as an affordable rental development and that all of the units except one manager's unit be rented to and occupied by persons and households of limited income at affordable rents. Title of Document Containing Affordable Housing Restrictions: Regulatory Agreement and Declaration of Covenants and Restrictions ("Regulatory Agreement"). Parties to Regulatory Agreement: City of Newport Beach, a California municipal corporation and charter city ("City"), and Community Development Partners, a California corporation ("Owner"). The Regulatory Agreement is recorded concurrently with this Notice, in the official records of Orange County. Legal Description of Property: See Exhibit "A" attached hereto and incorporated herein by this reference. Location of Property: 6001 Coast Boulevard, in the City of Newport Beach, County of Orange, California 92663. Assessor's Parcel Number of Property: 045-114-15. 882/036753-0123 2765748.6 al 1/16/15 Page 1 of 6 25-152 Summary of Regulatory Agreement: o The Regulatory Agreement restricts rental of twelve (12) units as described in Exhibit B hereto. o The term of the Regulatory Agreement is 55 years. This Notice does not contain a full description of the details of all of the terms and conditions of the Regulatory Agreement. You will need to obtain and read the Regulatory Agreement to fully understand the restrictions and requirements which apply to the Property. This Notice is being recorded and filed in compliance with Health and Safety Code Section 33334.3(f)(3) and (4), and shall be indexed against the City and the Owner of the Property. 882/036753-0123 2765748.6 al 1/16/15 [Signatures on next page] Page 2 of 7 25-153 Date: Leilani I. Brown City Clerk APROV S TO FORM: C.') Aaron C. Harp cANK 14Itr City Attorney 8821036753-0123 2765748.6 a11116115 "City" CITY OF NEWPORT BEACH, a California municipal corporation By: Dave Kiff City Manager Page 3 of 25-154 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA ) ss. COUNTY OF ) On , before me, , Notary Public, personally appeared , proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and official seal. Notary Public 882/036753-0123 2765748.6 al 1/16/15 Page 4 of 7 [SEAL] 25-155 EXHIBIT "A" LEGAL DESCRIPTION OF PROPERTY All that certain real property situated in the County of Orange, State of California, and is described as follows: Lots 11, 12 and 13 in Block 160 of River Section, Newport Beach, in the City of Newport Beach, County of Orange, State of California, as shown on a map recorded in Book 4, Page 25 of Miscellaneous Maps, in the office of the County Recorder of said County. EXCEPT therefrom Lot 11 all oil, gas, minerals and other hydrocarbon substances lying below a depth shown below but with no right of surface entry, as provided in the deeds of record Depth: 50 feet EXCEPT therefrom Lot 13 all oil, gas, minerals and other hydrocarbon substances lying below a depth shown below but with no right of surface entry, as provided in the deeds of record Depth: 50 feet EXCEPT therefrom Lot 12 all oil, gas, minerals and other hydrocarbon substances lying below a depth shown below but with no right of surface entry, as provided in the deeds of record Depth: 400 feet Assessor's Parcel Number: 045-114-15 882/036753-0123 2765748.6 al 1/16/15 Page 5of7 25-156 EXHIBIT "B" RESTRICTED UNIT MATRIX Size No. of 30% AMI 40% AMI 50% AMI 60% AMI Units One bedroom 12 6 2 882/036753-0123 2765748.6 al 1/16/15 Page 6 of 7 25-157 CONSENT TO RECORDATION Community Development Partners, a California corporation ("Owner"), owner of the fee interest in the real property legally described in Exhibit "A" hereto, hereby consents to the recordation of the foregoing Notice of Affordability Restrictions on Transfer of Property against said real property. Dated: 12015 By: Eric A. Paine Chief Executive Officer A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA ) ss. COUNTY OF ) On , before me, , Notary Public, personally appeared , proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and official seal. Notary Public 882/036753-0123 2765748.6 a11/16/15 Page 7 of 7 [SEAL] 25-158 8821036753-0123 2765748.6 al 1/16/15 ATTACHMENT NO. 11 REAL ESTATE PURCHASE AGREEMENT DATED JUNE 30, 2015 [SEE FOLLOWING PAGE] -1- 25-159 882/036753-0123 2765748.6 al 1/16/15 ATTACHMENT NO. 12 RELEASE OF CONSTRUCTION COVENANTS -1- 25-160 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: APN: 045-114-15 Space above for Recorder's use Exempt from Recording Fee per Gov. Code§ 27383 RELEASE OF CONSTRUCTION COVENANTS This RELEASE OF CONSTRUCTION COVENANTS ("Release") is made this day of 20 , by the CITY OF NEWPORT BEACH, a California municipal corporation ("City"), in favor of COMMUNITY DEVELOPMENT PARTNERS, a California corporation ("Developer"). RECITALS A. Developer is the owner of that certain real property located in the City of Newport Beach, County of Orange, State of California, more particularly described in the legal description attached hereto as Exhibit" A" ("Site"). B. On or about , 2015, City and Developer entered into that certain Affordable Housing Agreement and Joint Escrow Instructions ("AHA") which provides for Developer to develop an affordable rental housing project on the Site, more particularly described therein as the "Project." C. Pursuant to the AHA, City is required to furnish Developer with this Release upon request by Developer after completion of construction of the Project. D. The issuance by City of this Release shall be conclusive evidence that Developer has complied with the terms of the AHA pertaining to the construction of the Project. NOW, THEREFORE: 1. As provided in the AHA, City does hereby certify that the construction of the Project has been satisfactorily performed and completed, and that such development and construction work complies with the AHA. 2. This Release does not constitute evidence of compliance with or satisfaction of any obligation of Developer to any holder of a mortgage or any insurer of a mortgage security money loaned to 882/036753-0123 2765748.6 al 1/16/15 25-161 finance the work of construction of improvements and development of the Site, or any part of thereof. 3. This Release is not a notice of completion as referred to in Section 3093 of the California Civil Code. 8821036753-0123 2765748.6 al 1/16/15 25-162 IN WITNESS WHEREOF, City has executed this Release as of the date set forth above. ATTEST: City Clerk "CITY" CITY OF NEWPORT BEACH, a California municipal corporation and charter city City Manager CONSENT TO RECORDATION COMMUNITY DEVELOPMENT PARTNERS, a California corporation, owner of the Site described herein, hereby consents to the recordation of this Release against the Site. "DEVELOPER" COMMUNITY DEVELOPMENT PARTNERS, a California corporation FZW 882/036753-0123 2765748.6 al 1/16/15 25-163 EXHIBIT "A" LEGAL DESCRIPTION All that certain real property situated in the County of Orange, State of California, commonly known as 6001 Coast Boulevard and described as follows: Lots 11, 12 and 13 in Block 160 of River Section, Newport Beach, in the City of Newport Beach, County of Orange, State of California, as shown on a map recorded in Book 4, Page 25 of Miscellaneous Maps, in the office of the County Recorder of said County. EXCEPT therefrom Lot 11 all oil, gas, minerals and other hydrocarbon substances lying below a depth shown below but with no right of surface entry, as provided in the deeds of record Depth: 50 feet EXCEPT therefrom Lot 13 all oil, gas, minerals and other hydrocarbon substances lying below a depth shown below but with no right of surface entry, as provided in the deeds of record Depth: 50 feet EXCEPT therefrom Lot 12 all oil, gas, minerals and other hydrocarbon substances lying below a depth shown below but with no right of surface entry, as provided in the deeds of record Depth: 400 feet Assessor's Parcel Number: 045-114-15 882/036753-0123 2765748.6 al 1/16/15 25-164 CERTIFICATE OF ACKNOWLEDGEMENT OF NOTARY PUBLIC CIVIL CODE § 1189 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF On , 2015 before me, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 882/036753-0123 2765748.6 all/16/15 25-165 CERTIFICATE OF ACKNOWLEDGEMENT OF NOTARY PUBLIC CIVIL CODE § 1189 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF On , 2015 before me, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 882/036753-0123 2765748.6 a 11/16/15 25-166 CERTIFICATE OF ACKNOWLEDGEMENT OF NOTARY PUBLIC CIVIL CODE § 1189 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF On , 2015 before me, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 882/036753-0123 2765748.6 al 1/16/15 25-167 Attachment B Habitat OC Affordable Housing Agreement 25-168 AFFORDABLE HOUSING AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND HABITAT FOR HUMANITY, REGARDING USE OF AFFORDABLE HOUSING FUNDS FOR VARIOUS ELIGIBLE SENIOR RESIDENTS This AFFORDABLE HOUSING AGREEMENT ("Agreement") is entered into as of this day of November 24, 2015 by and between the City of Newport Beach, a California municipal corporation and charter city, ("City"), and Habitat for Humanity of Orange County, Inc., a California nonprofit corporation ("Habitat OC"), and is made on the basis of the following facts, intentions and understandings: RECITALS WHEREAS, maintaining and preserving existing housing for lower-income senior citizens, a special needs population, in the City of Newport Beach, furthers the City's affordable housing goals and objectives as expressed in the Housing Element and more specifically implements Housing Element Policies 1.1 and 5.1 and Housing Element Programs 1.1.2 and 4.1.4; WHEREAS, City is a municipal corporation which has received funds from the payment of affordable housing in -lieu fees by developers of market rate housing who did not provide affordable housing units in compliance with City's Housing Element; WHEREAS, Habitat OC has taken on critical home repair as a way to realize their mission to serve persons in need, including projects that focus on health/safety, energy efficiency, weatherization, code compliance, and accessibility; WHEREAS, OASIS Senior Center in Newport Beach ("OASIS") - a department of the City - has identified a need for critical home repair for low income seniors in the City of Newport Beach; WHEREAS, OASIS has partnered with Habitat OC to implement a program that identifies low income seniors and provides them critical home repairs such as: accessibility, safety concerns, health and wellbeing (toilets, plumbing, roofing repair), and resolution of code enforcement issues; WHEREAS, the grant request of Six Hundred Thousand Dollars and 00/100 ($600,000.00) of the City's affordable housing fund to implement the program shall provide funding for approximately thirty (30) low income seniors with home repairs; WHEREAS, City has relied on the information submitted by OASIS and Habitat OC therein, including the financial capacity, commitment by Habitat OC and OASIS, to determine program eligibility to receive assistance; WHEREAS, funding from the City is essential for critical home repairs for low income seniors to allow them to reside in their existing homes safely, preserving the housing stock for lower income residents in the City of Newport Beach; City of Newport Beach Affordable Housing Agreement Page 1 25-169 WHEREAS, recipient ("Recipient") is the eligible owner of the fee interest in certain real property in the City of Newport Beach ("Property"), that is also Recipient's primary residence and is occupied by Recipient as such; and WHEREAS, OASIS has determined that Recipient is eligible to receive assistance as more fully set forth in this Agreement. NOW, THEREFORE, the Recitals set forth above are a substantive part of this Agreement and for good and valuable consideration the parties agree as follows: Section 1. (a) The term of this Agreement shall commence on the above written date, and shall terminate January 1, 2018, unless terminated earlier as set forth herein. Section 2. Agreement Funds. City does hereby agree to disburse to Habitat OC an amount of Six Hundred Thousand Dollars and 00/100 ($600,000.00) ("Agreement Funds") solely to pay for the critical home repairs in accordance with and subject to the terms and conditions of this Agreement. The Agreement Funds shall only be disbursed by the City to Habitat OC for the properly documented costs of making the repairs as further set forth herein. Section 3. Conditions Precedent to Fund Disbursement. (a) The Agreement Funds shall be disbursed in accordance with the following procedures: Prior to disbursement of any Agreement Funds, Habitat OC shall execute and deliver to the City this Agreement and a copy of an executed contract by and between Habitat OC and each contractor providing home repairs for each property. These agreements shall provide the total costs of completing the home repairs for a single property at a time. 2. Prior to disbursement of any Agreement Funds, Habitat OC shall obtain any necessary permits for the home repairs issued by the City's Community Development Department, Building Division, as well as any other permits required by local, state, and federal government entities. 3. Prior to disbursement of any Agreement Funds, Habitat OC shall provide the City certificates of insurance for each contractor with original endorsements effecting coverage required by this Agreement and as set forth in detail in Exhibit A, which is attached hereto and incorporated herein by this reference. 4. Prior to disbursement of any Agreement Funds, Habitat OC shall provide either: an approved scope of work and budget between Habitat OC and Recipient for the first fifty percent (50%) disbursement of total funds, or invoices and other documents showing that Habitat OC has expended the money used for the completion of home repairs for the disbursement of remainder funds. 5. Upon verification and approval by the City that Habitat OC has complied with Section 3 Subsections (a), (1) through (5), the City shall disburse payment to Habitat OC for work completed and inspected when required, within in ten (10) business days upon: City of Newport Beach Affordable Housing Agreement Page 2 25-170 i. The submittal of invoices, documents and other information requested by the City for work associated with the home repairs for which Habitat OC is seeking disbursement; ii. Written verification by Habitat OC that the work has been satisfactorily performed; and iii. The submittal of , conditional lien releases from the contractor, subcontractor and suppliers, in a form approved by the City, releasing Habitat OC, OASIS, and City of liability upon making progress or final payments. (b) The parties hereto agree that the City shall not be obligated to reimburse Habitat OC and Habitat OC shall be required to reimburse the City within ten (10) business days, the entire amount of any Agreement Funds paid to Habitat OC on an individual project basis under this Agreement if any of the following conditions occur: 1. Habitat OC does not obtain a final inspection for the home repairs if required by the City's Community Development, Building Division; 2. Habitat OC fails to submit a lien release in such form as approved by City; 3. Habitat OC defaults in the performance of Habitat OC's obligations under this Agreement; or 4. If any of the Agreement Funds disbursed by City are not used for the agreed upon improvements. Section 4. City of Newport Beach Responsibilities. The parties hereto acknowledge and agree as follows: (a) The City, OASIS, and Habitat OC are not entering into a joint venture. Nothing in this Agreement shall be deemed to constitute approval for Habitat OC or any of Habitat OC's employees, volunteers, or agents, to be the agents, volunteers, or employees of City. (b) The Community Development Department of the City shall monitor the Affordable Housing Fund disbursement and tracking of the projects to be reported in the annual Housing Element Report on implementation of Housing Element Programs and Policies. Section 5. OASIS Responsibilities. The parties hereto acknowledge and agree as follows: (a) OASIS shall conduct Phase 1 Project Identification and Qualification ("Phase 1"), which includes the following: 1. Marketing and outreach to seniors living in the City who own their primary residence and are owner -occupied; City of Newport Beach Affordable Housing Agreement Page 3 25-171 2. Resident application intake, answering of questions, and processing the documentation needed for income evaluation; 3. Implementing the program that will identify residents whose homes are in need of repair in the following categories: i. Accessibility; ii. Safety concerns; iii. Health and wellbeing; and/or iv. Cited by code enforcement; 4. Walk-through with a qualified volunteer who has experience in construction for the initial assessment at the subject property to evaluate the severity and need of the repair(s). Community Development Department staff may attend initial assessment to assist in property evaluation; and 5. Review and selection wherein staff shall evaluate possible projects and forward selections to Habitat OC, who shall complete a separate written agreement with and be responsible for the improvements. (b) Upon the Recipient and OASIS approving the scope of work and budget under separate written agreement, OASIS shall disburse fifty percent (50%) of the estimated total construction cost to Habitat OC. (c) Upon receiving completed and final invoices needed for the project, OASIS shall disburse the remaining funds allocated for the subject property. (d) OASIS shall monitor the eligibility of the Recipient through completion of the work performed under this Agreement. OASIS shall report this information to City's Community Development Department for their annual Housing Element Report per Section 4(b). OASIS' reporting shall include all properties and seniors served by the Agreement Funds, and the work performed under this Agreement Section 6. Habitat OC Responsibilities. The parties hereto acknowledge and agree as follows: (a) For each property, Habitat OC shall conduct Phase 2 Project Scope and Repair ("Phase 2"), which includes the following: 1. Second walk-through to ascertain the details of the repair; 2. Scope of work budget creation wherein a detailed scope of work and project budget shall be created; 3. Legal review and document preparation wherein the scope of work shall be finalized, including liability documents; 4. Recipient and OASIS approval where OASIS and the Recipient approve the scope of work and budget under separate written agreement prior to commencement of the repair; City of Newport Beach Affordable Housing Agreement Page 4 25-172 5. Obtain necessary building permits from the City's Community Development Department, Building Division; 6. Construction of the repairs that may require volunteer assistance; 7. Final walk-through and Work acceptance with Recipient, confirming work has been completed and is acceptable; 8. Final Building Inspection if City building permits have been obtained; 9. Completion of the invoices necessary for the Work, which shall be forwarded to the OASIS for the disbursement of the remaining funds allocated for the subject property. (b) Habitat OC shall be responsible for all tracking of Agreement Funds by providing budgets, invoices, receipts and lien releases as described in this Agreement. (c) City and its elected or appointed officers, agents, officials, employees and volunteers thereof shall not be responsible in any manner: for any loss or damages that may happen as a result of this Agreement; the construction of the improvements or any part thereof; for any loss or damage to any of the materials or other things used or employed in performing the construction of the repairs; for injury to or death of any person, either workers or the public; or for damage to property from any cause arising from the construction of the repairs by Habitat OC, its contractor or subcontractor, its workers, volunteers, or anyone employed by Habitat OC. The manner and means of conducting the work on the improvements are under the control of Habitat OC, except to the extent they are limited by statute, rule or regulation and the express terms of this Agreement. (d) City shall have no responsibility or liability to Habitat OC or any third party regarding any action or failure of any contractor, subcontractor, supplier or third party and that City in no way guarantees any of the work to be done or the materials to be supplied. City's sole obligation with respect to the repairs shall be for disbursement of the Agreement Funds in accordance with the terms of this Agreement. Section 7. Recipient Property Owner's Age and Income Requirement. Subject property shall be considered eligible as set forth below: (a) The housing unit shall be occupied by persons or families earning no more than fifty percent (50%) of the County annualized median income ("Very Low -Income"). Each qualified property shall be occupied by persons who are sixty (60) years of age or older, are residing in the property as their primary residence, and shall be named on the title of the house. (b) Total assets are considered as part of Recipient's income. Section 8. Indemnity; Hold Harmless. To the fullest extent permitted by law, Habitat OC shall indemnify, defend and hold harmless City, OASIS, its City Council, boards and commissions, officers, agents, volunteers, and employees (collectively, the "Indemnified City of Newport Beach Affordable Housing Agreement Page 5 25-173 Parties") from and against any and all claims (including, without limitation, claims for bodily injury, death or damage to property), demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and expenses (including, without limitation, attorney's fees, disbursements and court costs) of every kind and nature whatsoever (individually, a Claim; collectively, "Claims"), which may arise from or in any manner relate (directly or indirectly) to this Agreement, any breach of the terms and conditions of this Agreement, any work performed or services provided under this Agreement including, without limitation, defects in workmanship or materials or Habitat OC presence or activities related to the Improvements or pursuant to this Agreement (including, but not limited to, the negligent and/or willful acts, errors and/or omissions of Habitat OC, its principals, officers, agents, employees, vendors, suppliers, contractors, consultants, subcontractors, suppliers anyone employed directly or indirectly by any of them or for whose acts they may be liable or any or all of them). Notwithstanding the foregoing, nothing herein shall be construed to require Habitat OC to indemnify the Indemnified Parties from any Claim arising from the sole negligence or willful misconduct of the Indemnified Parties. Nothing in this indemnity shall be construed as authorizing any award of attorney's fees in any action on or to enforce the terms of this Agreement. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by the Habitat OC. Habitat OC shall be responsible for any liability imposed by law and for injuries to or death of any person or damage to property resulting from defects, obstructions or from any cause arising from Habitat OC's work under this Agreement upon Recipient's Property, or the work of any subcontractor or supplier selected by Habitat OC. Habitat OC and its contractors, subcontractors, volunteers, and agents, shall perform all work in a manner to minimize public inconvenience and possible hazard, to restore other work areas to their original condition and former usefulness as soon as possible, and to protect public and private property. Habitat OC shall be liable for any private or public property damaged during the performance of the work upon the Property pursuant to this Agreement. Nothing in this Section or any other portion of the Agreement shall be construed as authorizing any award of attorneys' fees in any action to enforce the terms of this Agreement, except to the extent provided for above. The rights and obligations set forth in this Section shall survive the termination of this Agreement. Section 9. Non -Discrimination. (a) OASIS shall be responsible for ensuring that persons or families selected for grants funds under this Agreement properly qualify to occupy the units under the terms of this Agreement. Selection of the persons shall be made on the basis of criteria that are neutral as to race, religion, sex, creed, ethnic origin, marital status, or any other constitutionally impermissible standard. (b) Habitat OC represents that it is an equal opportunity employer and it shall not discriminate against any contractor, subcontractor, supplier, employee or applicant for City of Newport Beach Affordable Housing Agreement Page 6 25-174 employment because of race, religion, sex, creed, ethnic origin, marital status, or any other constitutionally impermissible standard. Section 10. Prevailing Wages. If applicable, pursuant to the applicable provisions of the Labor Code of the State of California, not less than the general prevailing rate of per diem wages including legal holidays and overtime Work for each craft or type of workman needed to execute the Work contemplated under the Contract shall be paid to all workmen employed on the Work to be done according to the Contract by the Contractor and any subcontractor. In accordance with the California Labor Code (Sections 1770 et seq.), the Director of Industrial Relations has ascertained the general prevailing rate of per diem wages in the locality in which the Work is to be performed for each craft, classification, or the Department of Industrial Relations. The Contractor is required to obtain the wage determinations from the Department of Industrial Relations and post at the job site the prevailing rate or per diem wages. It shall be the obligation of the Contractor or any subcontractor under him/her to comply with all State of California labor laws, rules and regulations, and the parties agree that the City shall not be liable for any violation thereof. If both the Davis -Bacon Act and State of California prevailing wage laws apply and the federal and state prevailing rate of per diem wages differ, Contractor and subcontractor, if any, shall pay the higher of the two rates. Said prevailing rate of per diem wages are on file at the City, Office of the City Clerk, 100 Civic Center Drive, Newport Beach, California 92660, and are available to any interested party on request. Section 11. Compliance. Habitat OC agrees to strictly comply with all requirements of this Agreement. Section 12. Default. (a) Termination for Cause. In the event the City determines that there has been any fraud or deceit by Habitat OC including, but not limited to, any material misrepresentation by Habitat OC, the City may, in its sole discretion, immediately terminate this Agreement. In the event that either party fails or refuses to perform any of the provisions of this Agreement at the time and in the manner required, that party shall be deemed in default in the performance of this Agreement. If such default is not cured within a period of five (5) calendar days, or if more than five (5) calendar days are reasonably required to cure the default and the defaulting party fails to give adequate assurance of due performance within five (5) calendar days after receipt of written notice of default, specifying the nature of such default and the steps necessary to cure such default, and thereafter diligently take steps to cure the default, the non -defaulting party may terminate the Agreement forthwith by giving to the defaulting party written notice thereof. (b) Repayment. In the event of termination for cause as provided in Subsection (a) of Section 12 of this Agreement, Habitat OC shall, within ten (10) calendar days, repay the amount of the Agreement Funds that City determines to have been spent in contravention of this Agreement as set forth in Section 12(a), to the City, plus interest which shall bear a rate of ten percent (10%) from the date the Agreement Funds were distributed to Habitat OC. (c) Acceptance of Service of Process. In the event that any legal action is commenced by Habitat OC against the City, service of process on the City shall be made by personal service upon the City Clerk, or in such other manner as may be provided by law. City of Newport Beach Affordable Housing Agreement Page 7 25-175 In the event that any legal action is commenced by City against Habitat OC, service of process on Habitat OC shall be made in such manner as may be provided by law, whether made within or outside the State of California. Section 13. General Provisions. (a) Notices. All notices, demands, requests or approvals to be given under the terms of this Agreement shall be given in writing, and conclusively shall be deemed served when delivered personally, or on the third business day after the deposit thereof in the United States mail, postage prepaid, first-class mail, addressed as hereinafter provided. All notices, demands, requests or approvals from Habitat OC to City shall be addressed to City at: To City: City of Newport Beach Community Development Director 100 Civic Center Drive P.O. Box: 1768 Newport Beach, CA 92658 With a copy to: OASIS Senior Center 801 Narcissus Avenue Corona Del Mar, CA 92625 All notices, demands, requests or approvals from City to Habitat OC shall be addressed to Habitat OC at: To Habitat OC: Habitat for Humanity of Orange County, Inc. 2200 South Ritchey Street Santa Ana, CA 92705-5308 Either party may change its address for notice by giving written notice thereof to the other party. (b) Amendment of Agreement. No modification, rescission, waiver, release or amendment of any provision of this Agreement shall be made except by a written agreement executed by Habitat OC and City, and approved as to form by City's City Attorney. (c) Assignment Prohibited. In no event shall Habitat OC assign or transfer any portion of its rights or obligations under this Agreement without the prior express written consent of City, which consent may be given or withheld in City's sole discretion. The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of Habitat OC which results in changing the control of Habitat OC shall be considered a prohibited assignment. Control means fifty percent (50%) or more of the voting power or twenty-five percent (25%) or more of the assets of the corporation. (d) Habitat OC to File Notices. Habitat OC shall file or record any notices of completion, cessation of labor, or any other notice that City deems necessary or desirable to protect its interest hereunder. City of Newport Beach Affordable Housing Agreement Page 8 25-176 (e) Actions. City shall have the right to commence, appear in, or defend any action or proceeding purporting to affect the rights, duties, or liabilities of the parties hereunder, or the disbursement of any proceeds of the Agreement Funds. (f) Applicable Law. The laws of the State of California shall govern the interpretation and enforcement of this Agreement and any action brought relating to this Agreement shall be adjudicated in a court of competent jurisdiction in the County of Orange. (g) Construction of Words. Except where the context otherwise requires, words imparting the singular number shall include the plural number and vice versa, words imparting persons shall include firms, associations, partnerships and corporations, and words of either gender shall include the other gender. (h) Partial Invalidity. If any provisions of this Agreement shall be declared invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions hereof shall continue in full force and effect. (i) Captions and Headings. Captions and headings in this Agreement are for convenience of reference only, and are not to be considered in construing the Agreement. 0) Joint and Several Liability. If Habitat OC consists of more than one person, the obligations of this Agreement shall be the joint and several obligations of all of them. (k) Entire Agreement. This Agreement constitutes the entire understanding and agreement of the parties. This Agreement integrates all of the terms and conditions mentioned herein or incidental thereto, and supersedes all prior negotiations, discussions and previous agreements between City and Habitat OC concerning all or any part of the subject matter of this Agreement. No verbal agreement or implied covenant shall be held to vary the provisions herein. (1) Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of the Agreement or any other rule of construction which might otherwise apply. (m) Waiver. A waiver by either party of any breach, of any term, covenant or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition contained herein, whether of the same or a different character. (n) Compliance with all Laws. Habitat OC shall at its own cost and expense comply with all statutes, ordinances, regulations and requirements of all governmental entities, including federal, state, county or municipal, whether now in force or hereinafter enacted. In addition, all Work prepared by Habitat OC, its contractors and subcontractors shall conform to applicable City, county, state and federal laws, rules, regulations and permit requirements. The parties expressly agree that it shall be Habitat OC's obligation to determine whether the use of the Agreement Funds requires the payment of prevailing wages for the construction of the Improvements and to comply with any applicable laws, rules and regulations related to the payment of prevailing wages. City of Newport Beach Affordable Housing Agreement Page 9 25-177 (o) Conflicts of Interest. Habitat OC or its employees may be subject to the provisions of the California Political Reform Act of 1974 (the "Act"), which (1) requires such persons to disclose any financial interest that may foreseeably be materially affected by this Agreement, and (2) prohibits such persons from making, or participating in making, decisions that will foreseeably financially affect such interest. If subject to the Act, Habitat OC shall conform to all requirements of the Act. Failure to do so constitutes a material breach and is grounds for immediate termination of this Agreement by City. Habitat OC shall indemnify and hold harmless City for any and all claims for damages resulting from Habitat OC's violation of this Subsection. (p) Records. Habitat OC shall keep records and invoices in connection with the Improvement work. Habitat OC shall maintain complete and accurate records with respect to the costs incurred in the improvement work and any expenditures and disbursements of the Agreement Funds, for a minimum period of four (4) years, or for any longer period required by law, from the date of final payment of any Agreement Funds under this Agreement. All such records and invoices shall be clearly identifiable. Habitat OC shall allow a representative of City to examine, audit and make transcripts or copies of such records and invoices during regular business hours. Habitat OC shall allow inspection of all work, data, documents, proceedings and activities related to the Agreement during the term of this Agreement and for a period of three (3) years from the termination of this Agreement. (q) Confidentiality. All documents, including drafts, notes and communications that result from this Agreement, shall be kept confidential unless City authorizes in writing the release of information. (r) Cooperation. Habitat OC agrees to work closely and cooperate fully with City and any other agencies that may have jurisdiction or interest in this Agreement. City agrees to cooperate with Habitat OC in the implementation of this Agreement. (s) Non -Liability of Officials, Employees and Agents. No official, officer, employee, agent, or representative of City shall be personally liable to Habitat OC or its successors and assigns for any loss arising out of or connected with this Agreement and no judgment or execution thereon entered in any action hereon shall be personally enforced against any such official, officer or employee. (t) No Attorney's Fees. In the event of any dispute or legal action arising under this Agreement, the prevailing party shall not be entitled to attorneys' fees. [SIGNATURES ON NEXT PAGE] City of Newport Beach Affordable Housing Agreement Page 10 25-178 IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year written below. CITY OF NEWPORT BEACH, a municipal corporation By: Edward D. Selich Mayor APPROVED AS TO FORM: OFFICE OF/74EGtTY ATTORNEY By: Aaron C. Harp cm -A I(I City Attorney ATTEST: Bv: Leilani I. Brown City Clerk Habitat for Humanity of Orange County, Inc., a California nonprofit corporation By: _ Nam Title: E : Sharon Ellis President / CEO (Corporate Officer) By: Name: Linda Shepherd Title: CFO (Financial Officer) Attachments: Exhibit A — Insurance Requirements City of Newport Beach Affordable Housing Agreement Page 11 25-179 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) On , 2015 before me, Notary Public, personally appeared , proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary Public in and for said State A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) (Seal) On 2015, before me, Notary Public, personally appeared , proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary Public in and for said State (Seal) City of Newport Beach Affordable Housing Agreement Page 12 25-180 EXHIBIT A INSURANCE REQUIREMENTS Provision of Insurance. Without limiting Habitat OC's indemnification of City, and prior to commencement of Work, Habitat OC shall obtain, provide and maintain at its own expense during the term of this Agreement, policies of insurance of the type and amounts described below and in a form satisfactory to City. Habitat OC agrees to provide insurance in accordance with requirements set forth here. If Habitat OC uses existing coverage to comply and that coverage does not meet these requirements, Habitat OC agrees to amend, supplement or endorse the existing coverage. 2. Acceptable Insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance in the State of California, with an assigned policyholders' Rating of A- (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best's Key Rating Guide, unless otherwise approved by City's Risk Manager. 3. Coverage Requirements. A. Workers' Compensation Insurance. Habitat OC shall maintain Workers' Compensation Insurance providing statutory benefits and Employer's Liability Insurance with limits of at least one million dollars ($1,000,000) each employee or volunteer for bodily injury by accident and each employee or volunteer for bodily injury by disease in accordance with the laws of the State of California, Section 3700 of the Labor Code. In addition, Habitat OC shall require each subcontractor to similarly maintain Workers' Compensation Insurance and Employer's Liability Insurance in accordance with California law for all of the subcontractor's employees. The insurer issuing the Workers' Compensation insurance shall amend its policy by endorsement to waive all rights of subrogation against City, its elected or appointed officers, agents, officials, employees and volunteers. Habitat OC shall submit to City, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of City, its elected or appointed officers, agents, officials, employees and volunteers. B. General Liability Insurance. Habitat OC shall maintain commercial general liability insurance and, if necessary, umbrella liability insurance, with coverage at least as broad as provided by Insurance Services Office form CG 00 01, in an amount not less than one million dollars ($1,000,000) per occurrence, two million dollars ($2,000,000) general aggregate and two million dollars ($2,000,000) completed operations aggregate. The policy shall cover liability arising from premises, operations, products -completed operations, personal and advertising injury, and liability assumed under an insured contract (including the tort liability of another assumed in a business contract). C. Automobile Liability Insurance. Habitat OC shall maintain automobile insurance at least as broad as Insurance Services Office form CA 00 01 covering bodily injury and property damage for all activities of Habitat OC arising out of or in connection with Work to be performed under this Agreement, including coverage for any owned, hired, non -owned or rented vehicles, in an amount not less than one million dollars ($1,000,000) combined single limit for each accident. City of Newport Beach Affordable Housing Agreement Page A-1 25-181 4. Other Insurance Requirements. The policies are to contain, or be endorsed to contain, the following provisions: A. Waiver of Subrogation. All insurance coverage maintained or procured pursuant to this Agreement shall be endorsed to waive subrogation against City, its elected or appointed officers, agents, officials employees and volunteers or shall specifically allow Habitat OC or others providing insurance evidence in compliance with these requirements to waive their right of recovery prior to a loss. Habitat OC hereby waives its own right of recovery against City, and shall require similar written express waivers and insurance clauses from each of its subcontractors. B. Additional Insured Status. All liability policies including general liability, products and completed operations, excess liability, pollution liability, and automobile liability, if required, shall provide or be endorsed to provide that City, its elected or appointed officers, agents, officials employees and volunteers shall be included as additional insureds under such policies. C. Primary and Non Contributory. Habitat OC's insurance coverage shall be primary insurance and/or the primary source of recovery with respect to City, its elected or appointed officers, agents, officials, employees and volunteers. Any insurance or self-insurance maintained by City shall be excess of Habitat OC's insurance and shall not contribute with it. D. Notice of Cancellation. All policies shall provide City with thirty (30) calendar days' notice of cancellation or nonrenewal of coverage (except for nonpayment for which ten (10) calendar days' notice is required) for each required coverage except Builders Risk Insurance, which shall contain an endorsement with said required notices. 5. Additional Agreements Between the Parties. The parties hereby agree to the following: A. Evidence of Insurance. Habitat OC shall provide certificates of insurance to City as evidence of the insurance coverage required herein, along with a waiver of subrogation endorsement for workers' compensation and other endorsements as specified herein for each coverage. All of the executed documents referenced in this Agreement must be returned to City within ten (10) regular City business days after the date on the "Notification of Award". Insurance certificates and endorsements must be approved by City's Risk Manager prior to commencement of performance. Current certification of insurance shall be kept on file with City at all times during the term of this Agreement. City reserves the right to require complete, certified copies of all required insurance policies, at any time. B. City's Right to Revise Requirements. City reserves the right at any time during the term of the Agreement to change the amounts and types of insurance required by giving Habitat OC ninety (90) calendar days advance written notice of such change. If such change results in substantial additional cost to Habitat OC, City and Habitat OC may renegotiate Habitat OC's funding. C. Right to Review Subcontracts. Habitat OC agrees that upon request, all agreements with subcontractors or others with whom Habitat OC enters into agreements with on behalf of City will be submitted to City for review. Failure of City City of Newport Beach Affordable Housing Agreement Page A-2 25-182 to request copies of such agreements will not impose any liability on City, or its employees. Habitat OC shall require and verify that all subcontractors maintain insurance meeting all the requirements stated herein, and Habitat OC shall ensure that City is an additional insured on all insurance required from subcontractors. For CGL coverage, subcontractors shall provide coverage with a format at least as broad as CG 20 38 04 13. D. Enforcement of Agreement Provisions. Habitat OC acknowledges and agrees that any actual or alleged failure on the part of City to inform Habitat OC of non- compliance with any requirement imposes no additional obligations on City nor does it waive any rights hereunder. E. Requirements not Limiting. Requirements of specific coverage features or limits contained in this Exhibit A are not intended as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type. If Habitat OC maintains higher limits than the minimums shown above, the City requires and shall be entitled to coverage for higher limits maintained by Habitat OC. Any available proceeds in excess of specified minimum limits of insurance and coverage shall be available to the City. F. Self -Insured Retentions. Habitat OC agrees not to self -insure or to use any self- insured retentions on any portion of the insurance required herein and further agrees that it will not allow any indemnifying party to self -insure its obligations to City. If Habitat OC's existing coverage includes a self-insured retention, the self- insured retention must be declared to City. City may review options with Habitat OC which may include reduction or elimination of the self-insured retention, substitution of other coverage, or other solutions. Habitat OC agrees to be responsible for payment of any deductibles on their policies. G. City Remedies for Non Compliance. If Habitat OC or any subcontractor fails to provide and maintain insurance as required herein, then City shall have the right but not the obligation, to purchase such insurance, to terminate this Agreement, or to suspend Habitat OC's right to proceed until proper evidence of insurance is provided. Any amounts paid by City shall, at City's sole option, be deducted from amounts payable to Habitat OC or reimbursed by Habitat OC upon demand. H. Timely Notice of Claims. Habitat OC shall give City prompt and timely notice of claims made or suits instituted that arise out of or result from Habitat OC's performance under this Agreement, and that involve or may involve coverage under any of the required liability policies. City assumes no obligation or liability by such notice, but has the right (but not the duty) to monitor the handling of any such claim or claims if they are likely to involve City. I. Coverage not Limited. All insurance coverage and limits provided by Habitat OC and available or applicable to this Agreement are intended to apply to the full extent of the policies. Nothing contained in this Agreement or any other agreement relating to City or its operations limits the application of such insurance coverage. City of Newport Beach Affordable Housing Agreement Page A-3 25-183 Coverage Renewal. Habitat OC will renew the coverage required here annually as long as Habitat OC continues to provide any Work under this or any other Agreement or agreement with City. Habitat OC shall provide proof that policies of insurance required herein expiring during the term of this Agreement have been renewed or replaced with other policies providing at least the same coverage. Proof that such coverage has been ordered shall be submitted prior to expiration. A coverage binder or letter from Habitat OC's insurance agent to this effect is acceptable. A certificate of insurance and/or additional insured endorsement as required in these specifications applicable to the renewing or new coverage must be provided to City with five (5) calendar days of the expiration of the coverages. K. Maintenance of General Liability Coverage. Habitat OC agrees to maintain commercial general liability coverage for a period of ten (10) years after completion of the Work or to obtain coverage for completed operations liability for an equivalent period. City of Newport Beach Affordable Housing Agreement Page A-4 25-184 Attachment C 2014-2021 Housing Plan, Goals, Policies, and Programs 25-185 Housing Element Housf-ftilement Coastal Zone Review The City of Newport Bea ses Chapter 20.34 of the Municipal Code t i ement Government Code Section 65590 et seq. Betwee uary 1, 2000, and January , 1,265 new residential units were approved for construction within the forma Co one. Of these new units, 120 were developed as housing affordable to low-income oderate-income individuals and/or families (Bayview Landing project). During the s me period, the r ermitted landowners to demolish 817 residential unitswithin the stal Zone for a net increase o nits (excludes units within Newport Coast that ar itted under the County of Orange per annexa ti reement). Of the units demolish , one were known to be occupied by low-income and/or moderate -1 e persons and/o ies. YEAR 2014-2021 HOUSING PLAN Quantified Objectives The 2014-2021 Regional Housing Needs Assessment (RHNA) determined the City of Newport Beach had a construction need for five residential units between January 2014 and January 2021. The total need for each target income group is as follows: Very Low -Income (1 unit); Low -Income (1 unit); Moderate -Income (1 unit); and, Above Moderate -Income (2 units). In addition to the goals of constructing new units to satisfy the RHNA, the City has goals to rehabilitate and preserve existing units. As required by State housing law, quantified objectives by income group for the 2014-2021 planning period are stated in this section. The quantified objectives are the actual number of housing units that the City anticipates can be constructed, rehabilitated, or preserved over the planning period. Table H41 Quantified Obje - Income Group New Construction Rehabilitation Preservation Extremely Low -Income' 12 5 95 Very Low -Income 12 5 77 Low -Income 1012 10 86 Moderate -Income 10 0 10 Above Moderate -Income 1,119 284 0 Total 1,312 304 195 1 Presumed that 50% of the allocated Very Low -Incomes units under RHNA would qualify as Extremely Very Low -Income pursuant to Government Code Section 65583(a)(1). 2 A reduction in the total number of new lower-income housing units to be provided with the Uptown Newport project is possible as a result of providing very low- and extremely low-income units that require greater subsidies. Newport Beach General Plan W 25-186 Housing Element New Construction: Achieving the new construction goals is expected to be achieved through the redevelopment of several key housing opportunity areas such as Airport Area, Newport Center, Newport Mesa, Banning Ranch, the Balboa Peninsula area, and Mariners' Mile. These areas could potentially accommodate up to 4, 612 new residential units based on the realistic development capacity calculated in the Sites Analysis and Inventory. The Airport Area in particular is a key opportunity site within the community that can facilitate the development of housing that is affordable at a variety of income levels. General Plan Policy LU 6.15.6 stipulates that residential units be developed at a maximum density of 50 units per acre and minimum of 30 units per acre. • For the purposes of quantifying the number of new units that may be permitted during the planning period based on identified need, available resources, and constraints, the City believes that a total of 1,199 above moderate -income units may be constructed through the combination of the following projects: Santa Barbara Condominiums (79 units), North Newport Center Planned Community (524 units), Plaza Corona del Mar (6 units), and the first phase of the Uptown Newport Planned Community (590 units). • Based on the Uptown Newport Affordable Housing Implementation Plan that was approved for the project, at least 20 percent of the new units proposed (excluding density bonus units) are required to be affordable to low-income households. Based on the first phase of development, a minimum of 101 low-income rental units are anticipated to be constructed during the planning period. Should the affordable rental units be restricted to very low-income households, the total number of units would be reduced to 56 units to reflect the greater subsidy required. Alternatively, should the affordable units be restricted to moderate -income for -sale units, a total of 202 units would be provided. It should also be noted that if the second phase of development occurs during the planning period, either 46 very low-income or 84 low-income rentals units, or 168 moderate -income for -sale units are expected. • Based on past production of granny units, and future promotion efforts required by Housing Program 5.1.3, it is the City's goal to approve approximately 20 new senior accessory dwelling units during the planning period. Given the maximum size of the units, occupancy restrictions that these units be occupied by persons of age 55 years or older, and discussions with current owners of these properties, these units are assumed to be occupied by a combination of moderate- and low-income households. Therefore, it is presumed that 50 percent of new granny units would be rented to low-income senior households. Rehabilitation: Between 2006-2012, the Code Enforcement Division has issued 266 notices of violations for "unsafe, unsightly, or poorly maintained property" and required the rehabilitation of these units. The City anticipates that this trend will continue and through continued Code Enforcement activities, it is estimated that approximately 304 units would be rehabilitated as a result during this planning period. Many of these units become deteriorated due to the owner's inability to afford repairs. Through the Housing Program 1.1.2, the City will strive to identify the home owners in need of assistance and to develop a program to assist these homeowners. The City's estimated goal is to assist approximately 20 units occupied by low-income and extremely low-income households. Preservation: The preservation objective refers to maintaining existing affordable housing through measures such as providing or continuing rent subsidies, enforcing existing affordability covenants, preservation of affordable units at risk of conversion, and implementing land use controls during the planning period. Newport Beach General Plan 25-187 Housing Element • As of December 21, 2012, a total of 127 Newport Beach low-income residents relied on Section 8 rental assistance vouchers. Based on Section 8 program targets, it is assumed 75 percent of the voucher holders were extremely low-income (95 units). The quantified objective includes conservation of the 127 Section 8 units/assisted households through continued participation as a member of the Orange County Housing Authority Advisory Committee and cooperation with the Orange County Housing Authority to provide Section 8 Rental Housing Assistance to residents of Newport Beach. The City will also continue to educate and encourage landowners within the City about the benefits of renting their units to Section 8 voucher holders. • The preservation objective utilizes the City's Affordable Housing Fund as a financial resource to assist the City with the replacement of existing affordable housing developments that convert to market -rate units. • Through the implementation of Program Nos. 4.1.1, 4.1.2, 4.1.4, and 4.1.5, the City will attempt to negotiate the extension of existing affordability covenants for the 153 rental units affordable to lower-income households that are set to expire during the planning period and are at risk of converting to market rate apartments. Newport Beach General Plan W 25-188 Housing Element Newport Beach Housing Element: Goals, Policies, and Programs Goals for the City include the following: promoting quality residential development through application of sound planning principles and policies that encourage preservation, conservation, and appropriate redevelopment of housing stock; providing a balanced residential community that contains a variety of housing types, designs and opportunities for all economic segments of the community; extending ownership opportunities to as many households as possible, particularly those of moderate and upper incomes because these comprise the greatest demand; preserving and increasing housing affordability, through rental housing, for very low— and low-income households; and, providing housing for special needs groups. The policies and programs described below focus on providing appropriate and affordable housing opportunities, and related services to the special needs populations most in need of such in Newport Beach, that is, in particular to senior citizens. Additionally, the policies and programs (particularly under Goals 3, 4, and 5) will ensure that the City will meet its quantified housing objectives for very low-, low-, and moderate -income units. For purposes of defining income groups, the Housing Element follows the regulations of Title 25 (Housing and Community Development) of the California Code of Regulations (CCR), Sections 6910 through 6932. The income groups are defined as follows: ■ Very Low—Income: 50 percent or less of the area median income, as adjusted for family size by the United States Department of Housing and Urban Development. ■ Low -Income: 50-80 percent of the area median income, as adjusted for family size by the United States Department of Housing and Urban Development. ■ Moderate -Income: 80-120 percent of the area median income, as adjusted for family size by the United States Department of Housing and Urban Development. ■ Above Moderate—Income: 120+ percent of the area median income, as adjusted for family size by the United States Department of Housing and Urban Development. The following affordability standards shall apply to rental and ownership housing: ■ Maximum household income shall be determined by number of persons in a family or household. ■ Income shall be in conformance with the limits set forth in 25 CCR X6932. ■ An ecieng unit shall be considered occupied by one person; a one bedroom occupied by two persons; a two bedroom occupied by four persons; a three bedroom occupied by six persons; and a four bedroom occupied by eight persons. ■ Rents for very low—, low-, and moderate -income households shall be no more than 30 percent of the income limits set forth in Section 6932. The selling price of a for -sale unit shall be no more than three times the buyer's income. Units may be sold to buyers with qualifying incomes for the limited sales price without regard to the number of persons in the family. Specific Goals, Policies, and Programs of the 2014-2021 Newport Beach Housing Plan follow. Newport Beach General Plan 25-189 Housing Element H1 Quality residential development and preservation, conservation, and appropriate redevelopment of housing stock Policies H 1.1 Support all reasonable efforts to preserve, maintain, and improve availability and quality of existing housing and residential neighborhoods, and ensure full utilization of existing City housing resources for as long into the future as physically and economically feasible. Programs Housing Program 1.1.1 Improve housing quality and prevent deterioration of existing neighborhoods by strictly enforcing Building Code regulations and abating Code violations and nuisances. (Imp 25.1, 26.1) Responsibility: Planning Division, Building Division the City Attorng and Code Enforcement 2014-2021 Objective: Prepare quaiteryrepod on code enforcement activities. Housing Program 1.1.2 Investigate the use of federal funds and local funds, including Community Development Block Grants (CDBG) and the Affordable Housing Fund, to provide technical and/or financial assistance, if necessary, to existing lower- and moderate -income, owner -occupants of residential properties through low-interest loans or emergency grants to rehabilitate and encourage the preservation of existing housing stock. (Imp 14.3, 25.1) Responsibility: Planning Division and Code Enforcement 2014-2021 Objective: Through Code Enforcement notifications and correction activities, atteVt to identify properly owners in need of fznancial assistance and overall resource allocation for a rehabilitation program. Attend quarteryOCHA (Cities Advisory Committee) meetings to keep up to date on rebabilitation programs offered by the County and investigate the availability of federal funds in February of eacb year, wben new funding opportunities are *picalyannounced. Housing Program 1.1.3 Require replacement of housing demolished within the Coastal Zone when housing is or has been occupied by very low—, low-, and moderate -income households within the preceding 12 Newport Beach General Plan W 25-190 Housing Element months. The City shall prohibit demolition unless a determination of consistency with Government Code Section 65590 has been made. The specific provisions implementing replacement unit requirements are contained in Chapter 20.34 of the Municipal Code. (Imp 1. 1, 5.1) Responsibility: Planning Division 2014-2021 Objective: Use Cbapter 20.34 "Conversion or Demolition of Affordable Housing" to iVlement Program confinuousyas projects are submitted. Housing Program 1.1.4 The City will continue to implement the Residential Building Records (RBR) program to reduce and prevent violations of building and zoning ordinances by providing a report to the all parties involved in a transaction of sale of residential properties, and providing an opportunity to inspect properties to identify potentially hazardous conditions, resources permitting. The report provides information as to permitted and illegal uses/construction, and verification that buildings meet zoning and building requirements, including life safety requirements. (Imp 25. 1, 26.1) Responsibility: Planning Division and Building Division 2014-2021 Objective. Continuously i)Vlement program as RBR applications are submitted to the City. Promote the availability of program to the public and local real estate professionals by maintaining information on website and developing brocbure and other promotional materials. H2 A balanced residential community, comprised of a variety of housing types, designs, and opportunities for all social and economic segments Policies H 2.1 Encourage preservation of existing and provision of new housing affordable to extremely low-, very low-, low-, and moderate -income households. Programs Housing Program 2.1.1 Maintain rental opportunities by restricting conversions of rental units to condominiums in a development containing 15 or more Newport Beach General Plan 25-191 Housing Element units unless the vacancy rate in Newport Beach for rental housing is an average of 5 percent or higher for four (4) consecutive quarters, and unless the property owner complies with condominium conversion regulations contained in Chapter 19.64 of the Newport Beach Municipal Code. (Imp 25.1) Responsibility: Planning Division 2014-2021 Objective: Complete a vacancy rate survey upon submittal Of condominium conversion application of 15 or more units. Housing Program 2.1.2 Take all feasible actions, through use of development agreements, expedited development review, and expedited processing of grading, building and other development permits, to ensure expedient construction and occupancy for projects approved with lower- and moderate -income housing requirements. (Imp 25.1) Responsibility: Planning Division and City Council 2014-2021 Objective: Continuously implement program as afordable bousing prjects are submitted to the City. Housing Program 2.1.3 Participate with the County of Orange in the issuance of tax-exempt mortgage revenue bonds to facilitate and assist in financing, development and construction of housing affordable to low and moderate -income households. (Imp 14.3) Responsibility: Planning Division 2014-2021 Objective: Continuously implement program per prject submittal as the developer applies for these bonds. Housing Program 2.1.4 Conduct an annual compliance -monitoring program for units required to be occupied by very low-, low-, and moderate -income households. (Imp 25.1) Responsibility: Planning Division, 2014-2021 Objective: Complete review by the last quarter of eacb year and report witbin the annual General Plan Status Report including Housing Element Report provided to OPR and HCD by April 1' eacb year. Housing Program 2.1.5 Provide entitlement assistance, expedited entitlement processing, and waive application processing fees for developments in which 5 percent of units are affordable to extremely low-income households. To be eligible for a fee waiver, the units shall be subject to an affordability covenant for a minimum duration of 30 years. The affordable units provided shall be granted a waiver of park in -lieu fees (if applicable) and traffic fair share fees. (Imp 25.1) Newport Beach General Plan W 25-192 Housing Element Responsibility: Planning Division 2014-2021 Objective: ConfinuousyiVlementprogram as affordable bousingprjects are submitted to the City. Housing Program 2.1.6 Affordable housing developments providing units affordable to extremely low-income households shall be given the highest priority for use of Affordable Housing Fund monies. (Imp 25. 1.) Responsibility: Planning Division 2014-2021 Objective: ConfinuousyiVlementprogram as affordable bousingprjects are submitted to the City. Policy H 2.2 Encourage the housing development industry to respond to existing and future housing needs of the community and to the demand for housing as perceived by the industry. Programs Housing Program 2.2.1 Maintain a brochure of incentives offered by the City for the development of affordable housing including fee waivers, expedited processing, density bonuses, and other incentives. Provide a copy of this brochure at the Planning Counter, the website and also provide a copy to potential developers. (Imp 2.1, 25.1) Responsibility: Planning Division 2014-2021 Objective: Update brocbure as needed to provide updated information regarding incentives including updated fees and a reference to the most up to date Site Analysis and Inventory. Housing Program 2.2.2 The City shall provide more assistance for projects that provide a higher number of affordable units or a greater level of affordability. At least 15 percent of units shall be affordable when assistance is provided from Community Development Block Grant (CDBG) funds or the City's Affordable Housing Fund. (Imp 2.1, 25.1) Responsibility: Planning Division, Planning Commission and City Council 2014-2021 Objective: Continuously implement program as bousing projects are submitted to the City. Housing Program 2.2.3 For new developments proposed in the Coastal Zone areas of the City, the City shall follow Government Code Section 65590 and Title 20. (Imp 5.1) Newport Beach General Plan 25-193 Housing Element Responsibility: Planning Division and the City Council 2014-2021 Objective: Use Zoning Code Chapter 20.34 "Conversion or Demolition of Affordable Housing" to implement this program continuously asprjects are submitted. Housing Program 2.2.4 All required affordable units shall have restrictions to maintain their affordability for a minimum of 30 years. (Imp 25.1) Responsibility: Planning Division, City Attorng, and City Council 2014-2021 Objective. Continuously implement program as housing projects are submitted to the City. Housing Program 2.2.5 Advise and educate existing landowners and prospective developers of affordable housing development opportunities available within the Banning Ranch, Airport Area, Newport Mesa, Newport Center, Mariners' Mile, West Newport Highway, and Balboa Peninsula areas. (Imp 24.1) Responsibility: Planning Division 2014-2021 Objective. ConfinuousyiVlementprogram asprospective developers contact City seeking development information. Maintain a designated staff person that can be contacted to provide housing opportunity information and incentives for development of affordable housing. Housing Program 2.2.6 Participate in other programs that assist production of housing. (Imp 14.3, 25.1) Responsibility: Planning Division 2014-2021 Objective: Attend quaderyOCHA (Cities Advisory Committee) meetings to keep up to date on rebabilitation programs offered by the County in order to confinuousyinform bomeowners and rental property owners witbin the City of opportunities and to encourage preservation of existing bousing stock. Housing Program 2.2.7 New developments that provide housing for lower-income households that help meet regional needs shall have priority for the provision of available and future resources or services, including water and sewer supply and services. (NR 1.6) (Imp 17.1) Responsibility: Planning Division and Utilities Department 2014-2021 Objective: Provide a copy of the Housing Element to water and sewer service providers. Pursuant to state law, water and sewer providers must grant priority to developments that include bousing units affordable to lower-income bousebolds wbicb is implemented continuously as tbeseprjects are submitted. Newport Beach General Plan = 25-194 Housing Element Housing Program 2.2.8 Implement Chapter 20.32 (Density Bonus) of the Zoning Code and educate interested developers about the benefits of density bonuses and related incentives for the development of housing that is affordable to very low-, low-, and moderate -income households and senior citizens. (I)* 25.1) Responsibility: Planning Division 2014-2021 Objective: Continuously implement program as housing projects are submitted to the City. Policy H 2.3 Approve, wherever feasible and appropriate, mixed residential and commercial use developments that improve the balance between housing and jobs. Programs Housing Program 2.3.1 Study housing impacts of proposed major commercial/industrial projects during the development review process. Prior to project approval, a housing impact assessment shall be developed by the City with the active involvement of the developer. Such assessment shall indicate the magnitude of jobs to be created by the project, where housing opportunities are expected to be available, and what measures (public and private) are requisite, if any, to ensure an adequate supply of housing for the projected labor force of the project and for any restrictions on development due to the "Charter Section 423" initiative. (Imp 25.1) Responsibility: Planning Division and Planning Commission 2014-2021 Objective: Continuously implement program as major commercial/ industrial pr jects are submitted to the City. H3 Housing opportunities for as many renter- and owner -occupied households as possible in response to the demand for housing in the City. Newport Beach General Plan 25-195 Housing Element Policies H 3.1 Mitigate potential governmental constraints to housing production and affordability by increasing the City of Newport Beach role in facilitating construction of affordable housing for all income groups. Programs Housing Program 3.1.1 Provide a streamlined "fast-track" development review process for proposed affordable housing developments. (Imp 2.1) Responsibility: Planning and Building Division 2014-2021 Objective. Continuously iVlement program as housing projects are submitted to the City. Housing Program 3.1.2 When a residential developer agrees to construct housing for persons and families of very low-, low-, and moderate -income above mandated requirements, the City shall (1) grant a density bonus as required by state law and/or (2) provide additional incentives of equivalent financial value. (Imp 2.1) Responsibility: Planning Division 2014-2021 Objective: ConfinuousyiVlementprovisions of Chapter 20.32 Density Bonus in the Zoning Code as bousing projects are submitted to the City. Housing Program 3.1.3 Develop a pre -approved list of incentives and qualifications for such incentives to promote the development of affordable housing. Such incentives include the waiver of application and development fees or modification to development standards (e.g., setbacks, lot coverage, etc.). Responsibility: Planning Division and City Council 2014-2021 Objective: Wlork =tb the Affordable Housing Task Force to develop the list and obtain City Coundl approval by Fall 2014. Newport Beach General Plan M 25-196 Housing Element Policy H 3.2 Enable construction of new housing units sufficient to meet City quantified goals by identifying adequate sites for their construction. Development of new housing will not be allowed within the John Wayne Airport QWA) 65 dB CNEL contour, no larger than shown on the 1985 JWA Master Plan. Programs Housing Program 3.2.1 When requested by property owners, the City shall approve rezoning of developed or vacant property from nonresidential to residential uses when appropriate. These rezoned properties shall be added to the list of sites for residential development. (Imp 2.1) Responsibility: Planning Division, Planning Commission and City Council 2014-2021 Objective: Continuously i)Vlement program as property owners bring their requests to the City. Housing Program 3.2.2 Recognizing that General Plan Policy LU6.15.6 may result in a potential constraint to the development of affordable housing in the Airport Area, the City shall maintain an exception to the minimum 10 -acre site requirement for projects that include a minimum of 30 percent of the units affordable to lower-income households. It is recognized that allowing a smaller scale development within an established commercial and industrial area may result in land use compatibility problems and result in a residential development that does not provide sufficient amenities (i.e. parks) and/or necessary improvements (i.e. pedestrian walkways). Therefore, it is imperative that the exception includes provisions for adequate amenities, design considerations for the future integration into a larger residential village, and a requirement to ensure collaboration with future developers in the area. (IV 25.1) Responsibility: Planning Division, Planning Commission and City Council 2014-2021 Objective: Continuously implement program as projects are submitted to the City. Housing Program 3.2.3 The City will encourage and facilitate residential and mixed-use development on vacant and underdeveloped sites listed in Appendix H3 by providing technical assistance to interested developers with site identification and entitlement processing. The City will support developers funding applications from other agencies and programs. The City will post the Sites Analysis and Inventory on the City's webpage and marketing materials for Newport Beach General Plan 25-197 Housing Element residential and mixed-use opportunity sites, and will equally encourage and market the sites for both for -sale development and rental development. To encourage the development of affordable housing within residential and mixed-use developments, the City shall educate developers of the benefits of density bonuses and related incentives, identify potential funding opportunities, offer expedited entitlement processing, and offer fee waivers and/or deferrals. (Imp 2.1) Responsibility: Planning Division 2014-2021 Objective. Continuously implement program as housing projects are submitted to the City. Review and update as necessary the Site Analysis and Inventory and provide information to interested developers. Housing Program 3.2.4 The City will monitor and evaluate the development of vacant and underdeveloped parcels on an annual basis, and report the success of strategies to encourage residential development in its Annual Progress Reports required pursuant to Government Code 65400. If identified strategies are not successful in generating development interest, the City will respond to market conditions and will revise or add additional incentives. (Imp 2.1) Responsibility: Planning Division 2014-2021 Objective: Annually report staff's findings witbin the annual General Plan Status Report including Housing Element Report provided to OPR and HCD by April 1' eacbyear. H4 Preservation and increased affordability of the City's housing stock for extremely low-, very low—, low-, and moderate -income households. Newport Beach General Plan W 25-198 Housing Element Policy H 4.1 Continue or undertake the following programs to mitigate potential loss of "at - risk" units due to conversion to market -rate units. These efforts utilize existing City and local resources. They include efforts to secure additional resources from public and private sectors should they become available. Programs Housing Program 4.1.1 Annually contact owners of affordable units for those developments listed in Table H12 as part of the City's annual monitoring of affordable housing agreements to obtain information regarding their plans for continuing affordability on their properties, inform them of financial resources available, and to encourage the extension of the affordability agreements for the developments listed in Table H12 beyond the years noted (Imp 25.1) Responsibility: Planning Division 2014-2021 Objective: Conduct as part of the annual coynpliance- monitoring program required by Program 2.1.4. Contact list shall be provided on City website and updated annually. Housing Program 4.1.2 The City shall maintain registration as a Qualified Preservation Entity with HCD to ensure that the City will receive notices from all owners intending to opt out of their Section 8 contracts and/or prepay their HUD insured mortgages. Upon receiving notice that a property owner of an existing affordable housing development intends to convert the units to a market -rate development, the City shall consult with the property owners and potential preservation organizations regarding the potential use of Community Development Block Grant (CDBG) funds and/or Affordable Housing Fund monies to maintain affordable housing opportunities in those developments listed in Table H12 or assist in the non-profit acquisition of the units to ensure long-term affordability. (Imp 25.1) Responsibility: Planning Division 2014-2021 Objective: Maintain registration as a Quaked Preservation entity witb HCD. Continuously hVIementprogram as notices are received front properly owners. Housing Program 4.1.3 Continue to maintain information on the City's website and prepare written communication for tenants and other interested parties about Orange County Housing Authority Section 8 opportunities and to assist tenants and prospective tenants acquire additional understanding of housing law and related policy issues. (Imp 14.3) Newport Beach General Plan 25-199 Housing Element Responsibility: Planning Division 2014-2021 Objective: Attend quaiteryOCHA (Cities Advisory Committee) that provide updates on OCHA Section 8 waiting list and housing opportunities to ensure information provided on City website is up-to- date. If Section 8 waiting list is opened, promote the availability of the program tbrougb marketing materials made available to the public Housing Program 4.1.4 Investigate availability of federal, state, and local programs and pursue these programs, if found feasible, for the preservation of existing lower-income housing, especially for preservation of lower-income housing that may convert to market rates during the next 10 years. In addition, continually promote the availability of monies from the Affordable Housing Fund as a funding source for the preservation and rehabilitation of lower-income housing. A list of these programs, including sources and funding amounts, will be identified as part of this program and maintained on an ongoing basis. (Imp 14.3, 25.1) Responsibility: Planning Division 2014-2021 Objective: Investigate availability of programs in February of eacb year, wben new funding opportunities are typically announced. Housing Program 4.1.5 The City shall inform and educate owners of affordable units of the State Preservation Notice Law (Government Code Section 65863.10-13), if applicable. Pursuant to the law, owners of government -assisted projects cannot terminate subsidy contract, prepay a federally -assisted mortgage, or discontinue use restrictions without first providing an exclusive Notice of Opportunity to Submit an Offer to Purchase. Owners proposing to sell or otherwise dispose of a property at any time during the 5 years prior to the expiration of restrictions must provide this Notice at least 12 months in advance unless such sale or disposition would result in preserving the restrictions. The intent of the law is to give tenants sufficient time to understand and prepare for potential rent increases, as well as to provide local governments and potential preservation buyers with an opportunity to develop a plan to preserve the property. This plan typically consists of convincing the owner to either (a) retain the rental restrictions in exchange for additional financial incentives or (b) sell to a preservation buyer at fair market value. (Imp 25.1 Responsibility: Planning Division 2014-2021 Objective: Conduct as part of the annual co)*Iiance- monitoring program required by Program 2.1.4. Newport Beach General Plan W 25-200 Housing Element Housing Program 4.1.6 In accordance with Government Code Section 65863.7, require a relocation impact report as a prerequisite for the closure or conversion of an existing mobile home park. (Imp 25.1) Responsibility: Planning Division and the State of California. (Tbe state =// determine acceptability of the relocation impact report) 2014-2021 Objective. Continuously implement program as prjects are submitted to the City. Housing Program 4.1.7 Participate as a member of the Orange County Housing Authority Advisory Committee and work in cooperation with the Orange County Housing Authority to provide Section 8 Rental Housing Assistance to residents of the community. The City will, in cooperation with the Housing Authority, recommend and request use of modified fair -market rent limits to increase the number of housing units within the City that will be eligible to participate in the Section 8 program. The Newport Beach Planning Division will prepare and implement a publicity program to educate and encourage landlords within the City to rent their units to Section 8 Certificate holders, and to make very low-income households aware of availability of the Section 8 Rental Housing Assistance Program. (Imp 14.3) Responsibility: Planning Division 2014-2021 Objective: Attend quarterly OCHA (Cities Advisory Committee). Continue to maintain information on City's website informing landlords of the program benefits of accepting Section 8 Certificate bolders. Policy H 4.2 Improve energy efficiency of all housing unit types (including mobile homes). Programs Housing Program 4.2.1 Implement and enforce the Water Efficient Landscape Ordinance and Landscape and Irrigation Design Standards in compliance with AB 1881 (2006). The ordinance establishes standards for planning, designing, installing, and maintaining and managing water -efficient landscapes in new construction and rehabilitated projects. (Imp 17.1, 25.1) Responsibility: Planning Division 2014-2021 Objective: Confinuousyimplement program as bousing projects are submitted to the City. Newport Beach General Plan 25-201 Housing Element Housing Program 4.2.2 Affordable housing developments that receive City assistance from Community Development Block Grant (CDBG) funds or from the City's Affordable Housing Fund shall be required, to the extent feasible, include installation of energy efficient appliances and devices, and water conserving fixtures that will contribute to reduced housing costs for future occupants of the units. (Imp 25.1) Responsibility: Planning Division 2014-2021 Objective: Continuously implement program as bouszng projects are awarded funds from the City. Housing Program 4.2.3 Investigate the feasibility and benefits of using a portion of its CDBG or other local funds for the establishment and implementation of an energy conserving home improvements program for lower-income homeowners. (Imp 25.1) Responsibility: Planning Division 2014-2021 Objective: Complete investigation by Fall of 2014. Housing Program 4.2.4 Maintain a process for LEED certified staff members to provide development assistance to project proponents seeking LEED certification, which will in turn increase the LEED points granted to projects. (Imp 25.1) Responsibility: Planning Division 2014-2021 Objective: Confinualyimplementprogram asprjects are submitted to the City. Housing Program 4.2.5 To encourage voluntary green building action, the City shall maintain a green recognition program that may include public recognition of LEED certified buildings (or equivalent certification), payment of a display advertisement in the local newspaper recognizing the achievements of a project, or developing a City plaque that will be granted to exceptional developments. (Imp 25.1) Responszbiliiy: Planning Division, City Council 2014-2021 Objective: Enhance City website to provide recognition of exceptional developments and to promote the sustainable construction by Spring of 2014. Newport Beach General Plan M 25-202 Housing Element Goal H5 Housing opportunities for special needs populations. Policy H 5.1 Encourage approval of housing opportunities for senior citizens and other special needs populations. Programs Housing Program 5.1.1 Apply for Community Development Block Grant (CDBG) funds and allocate a portion of such funds to sub -recipients who provide shelter and other services for the homeless. (Imp 25.1) Responsibility: Planning Division and the City Council 2014-2021 Objective: Continue to annually apply for CDBG funds and submit Annual Action Plan to HUD in May of each year. Housing Program 5.1.2 Cooperate with the Orange County Housing Authority to pursue establishment of a Senior/Disabled or Limited Income Repair Loan and Grant Program to underwrite all or part of the cost of necessary housing modifications and repairs. Cooperation with the Orange County Housing Authority will include continuing City of Newport Beach participation in the Orange County Continuum of Care and continuing to provide CDBG funding. (Imp 14.3) Responsibility: Planning Division and the City Council 2014-2021 Objective. Attend quaiteryOCHA (Cities Advisory Committee) meetings to keep up to date on rebabilitation programs offered by the County in order to continuously inform bomeowners and rental properly owners witbin the City of opportunities and to encourage preservation of existing housing stock Housing Program 5.1.3 Permit, where appropriate, development of senior accessory dwelling "granny" units in single-family areas of the City. The City will promote and facilitate the development of senior accessory dwelling units by providing brochures and/or informational materials at the building permit counter, online, and other appropriate locations detailing the benefits and the process for obtaining approval. (Imp 2.1) Responsibility: Planning Division Newport Beach General Plan 25-203 Housing Element 2014-2021 Objective. Confinuousyimplement program as housing projects are submitted to the City. Promotional materials mill be available to the public by Spring 2014. Housing Program 5.1.4 Work with the City of Santa Ana to provide recommendations for the allocation of HUD Housing Opportunities for Persons with AIDS (HOPWA) funds within Orange County. (Imp 14.3) Responsibility: Planning Division 2014-2021 Objective: Attend annual HOPWA strategy meetings for the County. Housing Program 5.1.5 Maintain a list of "Public and Private Resources Available for Housing and Community Development Activities." (Imp 25.1) Responsibility: Planning Division 2014-2021 Objective: Confinuousymaintain a list of resources on City website and update as necessary. Housing Program 5.1.6 Encourage the development of day care centers as a component of new affordable housing developments, and grant additional incentives in conjunction with a density bonus per the Chapter 20.32. (Imp 2.1) Responsibility: Planning Division, Planning Commission and City Council 2014-2021 Objective. Continuously implement program as housing projects are submitted to the City. Housing Program 5.1.7 Encourage senior citizen independence through the promotion of housing services related to in-home care, meal programs, and counseling, and maintain a senior center that affords seniors opportunities to live healthy, active, and productive lives in the City. (Imp 25.1) Responsibility: Planning Division and Recreation and Senior Services Department 2014-2021 Objective: Continue to provide social services, support groups, health screenings, fitness classes, and educational services at the City's OASIS Senior Center. Offer affordable ride -share transportation and meal services to seniors wbo are unable to drive andl or prepare their own meals or dine out, and bave little assistance in obtaining adequate meals. Housing Program 5.1.8 The City shall work with the Regional Center of Orange County (RCOC) to implement an outreach program informing families within the City of housing and services available for persons with developmental disabilities. Information will be made available on Newport Beach General Plan 25-204 Housing Element the City's website. The City shall also offer expedited permit processing and fee waivers and/or deferrals to developers of projects designed for persons with physical and developmental disabilities. Responsibility: Planning Division 20114-2021 Objective: Summer 2014 H6 Equal housing opportunities for all residents Goal ■ Policy H 6.1 Support the intent and spirit of equal housing opportunities as expressed in Title VII of the 1968 Civil Iigbts Act, California Rumford Fair Housing Act, and the California Unrub Civil Iigbts Act. Programs Housing Program 6.1.1 Contract with an appropriate fair housing service agency for the provision of fair housing services for Newport Beach residents. The City will also work with the fair housing service agency to assist with the periodic update of the Analysis of Impediments to Fair Housing document required by HUD. The City will continue to provide public outreach and educational workshops, and distribute pamphlets containing information related to fair housing. (Imp 14.3) Responsibility: Planning Division and City Attorng 2014-2021 Objective: Adopt Analysis of Impediments to Fair Housing (2015-2020) by Summer of 2016. Provide pampblets on an on- going basis at community facilities, and provide a minimum of two public worksbops related to Fair Housing peryear. J H7 Effective and responsive housing programs and policies. FW Newport Beach General Plan 25-205 Housing Element Policy H 7.1 Review the Housing Element on a regular basis to determine appropriateness of goals, policies, programs, and progress of Housing Element implementation. Programs Housing Program 7.1.1 As part of its annual General Plan Review, the City shall report on the status of all housing programs. The portion of the Annual Report discussing Housing Programs is to be distributed to the California Department of Housing and Community Development in accordance with California state law. (Imp. 1.4, 14.5) Responsibility: Planning Division 2014-2021 Objective: Annually report staff's findings witbin the annual General Plan Status Report including Housing Element Report provided to OPR and HCD by April 1' eacbyear. Newport Beach General Plan W 25-206 Attachment D Request for Proposal No. 15-55 25-207 CITY OF NEWPORT BEACH I"- i -q%, 0.� E PO X -1k 'M�ibz C1 -'4'q �-lliiiiiiiiW� rw REQUEST FOR PROPOSAL NO. 15-55 AFFORDABLE HOUSING DEVELOPMENT RFP Due Date: June 30, 2015 RFP Administrator: Anthony Nguyen, Purchasing Agent T: 949.644.3080 F: 949.642.7072 anguyen@newportbeachca.gov Email the RFP Administrator to be added to the Contact List in order to receive updates regarding addenda to this RFP 25-208 INTRODUCTION OBJECTIVE: The City of Newport Beach is issuing this Request for Proposals (RFP) for the development of affordable housing within the City. Approximately $4.2 million in funding is available from the City's Affordable Housing Fund (fund) to support the creation of new units, or rehabilitation and/or preservation of existing units. The fund was created from payments of an in -lieu housing fee required of certain development projects within the City and is intended to fill the financing gap between a project's total development cost and other available financing sources. The City is seeking project proposals from development teams or service providers (Applicants) who are experienced and can demonstrate their ability to finance, design, build/rehabilitate and manage affordable housing. The Applicant shall be responsive and able to maintain excellent working relationships with City residents, businesses, government officials and City staff. Respondents to this RFP must be able to demonstrate their experience and their ability to provide affordable housing units that meet the criteria in Review Criteria. As part of the selection process, development teams will be required to submit a Statement of Qualifications (SOQ). In order to be considered, a development team must have a proven track record of successfully constructing, financing, completing and managing similar projects. Development teams must also have experience complying with federal, state and local affordable housing fund construction, occupancy and reporting requirements. Funding will be awarded by the City on a competitive basis to the project(s) that provide the best opportunity to address the City's affordable housing needs. The City reserves the right to request that Applicants submit additional information as may be requested by staff to clarify submitted information. Also, the City reserves the right to reject any and all proposals for any reason, and at its sole discretion. ELIGIBLE USE OF FUNDS: The City's in -lieu housing fees were collected and deposited into an Affordable Housing Fund account and can be used to construct, rehabilitate, or subsidize affordable housing or assist other governmental entities, private organizations or individuals to provide or preserve affordable housing. The fund may be used for the benefit of both rental and owner -occupied housing. Allowed uses of fund monies include: • Assistance to housing development corporations; • Equity participation loans; • Grants; • Pre -home ownership co -investment; • Predevelopment loan funds; • Participation leases; 25-210 • Other public-private partnership arrangements; • The acquisition of property and property rights; • Construction of affordable housing including costs associated with planning, administration, and design, as well as actual building or installation; • Costs of rehabilitation and maintenance of existing affordable housing when needed to preserve units that are at risk of going to a market rate or at risk of deterioration [an inventory of the existing City -restricted affordable housing units is included as Exhibit A] ; • Other costs associated with the construction or financing of affordable housing; • Reasonable administrative charges or related expenses; and • Reasonable consultant and legal expenses related to the establishment and/or administration of the fund. EXAMPLES OF PAST USE OF FUNDS: In 2004, the City provided approximately $1.5 million in funds to help subsidize the construction of the Bayview Landing senior affordable housing project. This development provided a total of 120 units: 95 low-income units, 24 very low-income units, and one manager's unit. In 2009, the City granted $140,000 in funds for the rehabilitation and conservation of 100 senior housing units at Seaview Lutheran Plaza Apartments that had a deteriorating water delivery system. The project consisted of 50 extremely low-income and 50 very low-income senior housing units. In exchange for the monetary assistance, the owner agreed to extend the affordability of the units for a total period of 30 years (March 2039). DEFINITIONS: The following is an explanation of terms frequently referred to in this document: ■ "City": Refers to the City of Newport Beach. ■ "Request for Proposal (RFP)": Refers to the solicitation process wherein the City is seeking proposals for the use of Affordable Housing Funds. ■ "Proposal": The formal response to this solicitation submitted to the City by Applicants or Proposers. ■ "Applicant" or "Proposer": Refers to the individual, partnership, or corporation that is submitting a proposal in response to this RFP process. ■ "Project": Affordable housing provided through a program or project with new units, preservation or rehabilitation of existing units. ■ "Shall": Refers to a mandatory requirement. 25-211 GENERAL INFORMATION: A. The top proposals will be selected by City staff and presented to the Affordable Housing Task Force (AHTF), a committee of three City Council Members tasked with identifying, evaluating, and implementing affordable housing projects to satisfy community needs and achieve regional housing goals. The AHTF will select the best proposal(s) and recommend funding to the City Council for approval. B. When determined appropriate, the City will provide information in its possession relevant to preparation of required information in the RFP. The City will provide only the staff assistance and documentation specifically referred to herein. C. The developer or service provider shall be responsible for retaining data, records and documentation for the preparation of the required information. These materials shall be made available to the City as requested by the City. D. This RFP does not commit the City to pay costs incurred in preparation of a response to this RFP. All costs incurred in the preparation of the proposal, the submission of additional information and/or any aspect of a proposal prior to award of a written contract will be borne by the respondent. The City reserves the right to accept or reject the combined separate components of this proposal in part or in its entirety or to waive any informality or technical defect in proposal. E. All data, documents and other products used, developed or produced during response preparation of the RFP will become property of the City. All responses to the RFP shall become property of the City. Proposer information identified as proprietary information shall be maintained confidential, to the extent allowed under the California Public Records Act. F. The City reserves the right to reflect, replace and approve any and all subcontractors. All subcontractor(s) shall be identified in the response to the RFP and the City reserves the right to reject any subcontractor(s). Subcontractors shall be the responsibility of the developer or service provider, and the City shall assume no liability of such subcontractors. PROJECT/PROPOSAL REVIEW CRITERIA: Immediately following the submission deadline, the Community Development Department will create a review panel with appropriate staff. Each member of the panel will evaluate and rank each proposal using the evaluation criteria listed below. The order in which the criteria are listed does not imply their rank of importance. • Site control; • Housing units must remain affordable for at least 30 years; • Projects must have reasonable acquisition and construction costs, the ability to compete well in securing other/competitive funding sources and be soundly underwritten; • Projects must leverage other financing sources; • Projects must incorporate high quality design and amenities; 25-212 • Projects should incorporate "Green" building practices and materials in building design and construction; • Projects must be compatible with neighborhood settings from a massing and design perspective; • Projects must incorporate appropriate community spaces, amenities, and services for the target population; • Proposer must have demonstrated experience with successful affordable housing projects and the capacity to work cooperatively with the community in the design and development of the project; • Proposer must demonstrate the readiness of the proposed project to proceed; • Proposer must demonstrate ability to manage affordable rental units so as to ensure both ongoing compliance with affordability requirements and long-term financial solvency; • Projects must be consistent with the goals, policies, and programs of the Housing Element of the City's General Plan — http://www.newportbeachca.gov/PLN/General Plan/06 Ch5 Housing web.pdf; • Projects should target extremely low-income households (30% or less than the area median income), very low-income households (50% or less than the area median income), or low-income (80% or less than the area median income); • Projects should consider a range of households, including special needs such as veterans, large families, persons with disabilities, or seniors; and • Projects should include supportive services appropriate for the expected tenant population of the p roj ect. PROJECT/PROPOSAL SELECTION PROCESS: Once the panel has completed its review of the submitted material, it may invite the top rated proposers to an interview with the panel. Based on the responses to the RFP and the interviews, the panel may present all, some, or none, of the proposals to the AHTF. The AHTF may request additional interviews. Proposals that receive favorable AHTF review will be presented to City Council, with funding recommendations, for further consideration and for a final funding decision. Once City Council has made a final decision, the City and the approved team(s) will enter into an exclusive negotiation agreement (ENA) with funds reserved for a project. 25-213 INSTRUCTIONS Submittal Information: In an effort to comply with environmentally -friendly practices, Proposals are due by 11:00 A.M. on June 30, 2015 in electronic format only via email to the email address of the RFP Administrator indicated below. RFP Administrator: Anthony Nguyen, Purchasing Agent T: 949.644.3080 F: 949.642.7072 Email: anguyen@newportbeachca.gov (Please mark all submittals "RFP No. 15-55 Affordable Housing Development") It is the responsibility of the Proposer to ensure that the Proposal is received before the stated deadline. The Purchasing Office may be contacted at (949) 644-3080 to verify receipt of proposals. Postmarks will not be considered as a valid excuse for delayed or missing proposals. In the event that Proposers either cannot submit Proposals electronically or the Proposals are too large to transmit, Proposers must contact the RFP Administrator to make arrangements for hard copy delivery. Questions, Answers and Addenda to RFP: Prior to the RFP submission deadline, questions may arise regarding the specifications and procedural or administrative matters. By June 3, 2015, all questions pertaining to this RFP shall be directed to the RFP Administrator only; Applicants shall not contact any other City staff with questions. The RFP Administrator will draft a formal response to all questions stated and post answers on the City website. Changes to the RFP itself shall only be made by the City via formal written addenda. Addenda will be published on the City's website. All addenda shall become part of the RFP document requiring response by the proposer where indicated. It is the sole responsibility of the Applicant to ensure that they have received the entire Request for Proposal, including any and all questions, answers and addenda by visiting the City's website prior to the RFP submission deadline. Applicants may also email the RFP Administrator to be added to the Contact List for this RFP to receive updates on any addenda. Proposal Format: 1. Cover Letter. The proposal must include a signed cover letter. This cover letter must include a declaration that the only person, persons, company, or parties interested in the proposal as principals are named herein; that the proposal is made without collusion with any other person, persons, company, or parties submitting a proposal; that it is in all respects fair and in good faith without collusion or fraud, and that the signer has full authority to bind the proposer. It must also include an email address and contact information for the signer. The letter must be signed in blue ink. All proposal submissions shall be on 8-1/2" x 11" white paper. 2. Statement of Qualifications (SOQ). The SOQ must include the following components: a. Developer or Service Provider Team. An organizational chart showing lines of responsibility, as well as a list of team members and their duties as part of the team. 25-214 b. Developer or Service Provider Experience. A narrative describing recent affordable residential development and management experience, with an emphasis on experience gained in the last five years on projects similar to the one being proposed. Include project name and type (special needs, senior, large family, etc.), project address, developer team members, unit count and bedroom type, affordability requirements, funding sources, and project schedule in your description. Include a description of how neighborhood input was solicited and utilized in the development of these projects. c. Financial Capacity. Description of financial strength and ability to obtain project financing, and to provide sufficient equity for the successful completion of the proposed project. Include a description of current relationships with major lending institutions. The developer which is selected for recommendation to City Council, or if a partnership, the team members who will retain an ownership interest in the project, will be required to submit complete financial statements for the last three years. Because of the possibility of public records requests, the City cannot guarantee that these statements will remain confidential. d. References. Include a list of at least three references from public agency partners and professional lenders and investors with full names, contact information, and identification of the project(s) worked on. 3. Amount of Funds Requested 4. Project Description. Detailed and concise narrative describing the proposed project, including at a minimum and as appropriate: a. The development concept for the site or a description (with photographs) of the site, building, proposed building square footage, number and size of units/bedrooms, total parking spaces, proposed ingress and egress, proposed rents and tenant incomes, any special needs groups to be served, amenities to be provided to the tenants, and resident manager's unit. If there will not be a resident manager for a rental project, describe in detail how the project will be managed. b. Provide basic site information such as property address, lot area, existing uses, current General Plan designation and zoning, consistency with zoning or if rezoning is required. c. Describe the property location, neighborhood, transportation options, local services, and amenities within close proximity to the site. d. Provide a graphic depiction of the proposed project consisting of a preliminary site plan and elevation. 25-215 e. Description of how the project will be managed. f. Provide evidence of site control. Site control must be maintained until the property is acquired. g. Provide a plan for conducting community outreach to the neighbors of the proposed project and community groups. The outreach plan should describe how the proposer intends to build support for the project and address community concerns. The outreach plan should also discuss any anticipated community concerns and how they will be handled. 3. Development Pro Forma that identifies the sources and uses of all funds necessary to complete the project, and that includes the project's anticipated cash flows over a period of years equal to 15 years and 30 years. The pro forma should identify important underlying assumptions that govern the cash flows. 4. Proposed Implementation Plan. Taking as a starting point City Council approval of use of the funds, provide a proposed development schedule or implementation plan. For development projects, include the following milestones: site acquisition, additional funding from all other funding sources, zoning change approvals if necessary, preparation and approval of construction plans, start of construction, completion of construction, and lease -up. 5. Applicant Information Form. Please complete and remit the Applicant Information Form (included in the RFP as Attachment A). The proposal must be completely responsive to the RFP. Incomplete proposals will be deemed as nonresponsive and will be rejected. The City reserves the right to reject any or all proposals submitted and no representation is made hereby that any contract will be awarded pursuant to this RFP or otherwise. 25-216 m mm - ; AN PROGRAM SCOPE The City of Newport Beach has an Affordable Housing Fund that will reach a maximum of approximately $4.3 million in 2015. The City is soliciting proposals to find the best project(s) and/or program(s) to develop, preserve, or rehabilitate affordable housing units within the City from developers or service providers who are experienced, financially creative and capable of developing, managing and maintaining high quality housing. The City will entertain proposals for the following types of projects: • Construction of new affordable housing units within the City. • Rehabilitate and preserve existing affordable housing units on one or more sites. Existing housing sites located in the City with affordable housing restrictions are attached as "Exhibit A." • Acquire market -rate units on one or more sites and convert them to affordable units. • Subsidizing housing costs for lower-income households or special needs groups. The selected developer or service provider will also have a demonstrated history of working cooperatively with surrounding neighborhoods in all phases of project development. Both nonprofit and for profit developers are eligible to apply, either individually or in a partnership with other entities. The City is not making any parcels it owns available for development through this RFP, and it will entertain proposals for suitable properties located anywhere in the City. Proposer Representative The Proposer shall assign a primary representative and an alternate to perform the services described in the Program Scope. Each shall be identified in the proposal. The Proposer's representatives shall remain in charge of all duties from contract negotiations through project completion. If the primary representative is unable to continue with the project, the alternate representative shall become the primary representative. City Responsibilities The City shall provide the following items to assist the Proposer in completing services: • Primary City representative; • Current inventory of affordable housing sites in City and housing agreements; • Housing Element Site Inventory and Analysis identifying potential housing sites in the City and allowed density 25-218 0 PROPOSAL ATTACHMENT ATTACHMENT A: APPLICANT INFORMATION FORM Instructions: Complete the form below and remit as part of your Proposal as "Attachment A." APPLICANT INFORMATION APPLICANT/COMPANY NAME: ADDRESS FOR NOTICES: MAIN CONTACT (NAME AND TITLE): CONTACT NUMBERS: TELEPHONE: FAX: E-MAIL ADDRESS: APPLICANT SIGNATURE AUTHORIZATION AND CERTIFICATION Per the California Corporate Code, Business and Professions Code, the Applicant's Bylaws/Operating Agreement and/or the attached Board Resolution (if applicable), I/we hereby verify that I/we am/are (an) authorized signatory(ies) for the aforementioned Applicant and as such am/are authorized to sign and bind the Applicant in contract with the City of Newport Beach. 1. APPLICANT AUTHORIZED SIGNATORY(IES): SIGNATURE PRINT NAME TITLE DATE SIGNATURE PRINT NAME TITLE DATE 2. SIGNATURE AUTHORIZATION IS PROVIDED IN ACCORDANCE WITH: ❑ Applicant's Bylaws/ Operating Agreement Section ❑ Copy Attached ❑ Board Resolution ❑ Corporate or Business and Professions Code** ❑ Copy Attached **If Consultant is a corporation, two (2) authorized signatories will be required on all documents submitted, unless specified in the organization's Bylaws or corporate resolution. IMPORTANT NOTE: If the signature authorization status of any individual changes during the term of the contract, it is the responsibility of the Applicant to contact the RFP Administrator for the Applicant regarding the change and to complete and submit a new Signature Authorization Form. Incorrect information on file may delay the processing of any of the documents submitted. 25-220 0 TERMS & TERMS AND CONDITIONS I. Acceptance of Terms and Conditions Submission of a proposal indicates acceptance by the company submitting the proposal of the terms, conditions and specifications contained in this RFP, unless clearly and specifically stated otherwise in the completed Statement of Compliance. II. Public Record Upon submission of a proposal and other materials for consideration by the City, such proposals and materials shall become property of the City of Newport Beach. Proposals may be subject to public inspection and disclosure pursuant to state and federal law after the award of a contract for this Project. Prior to the RFP deadline, proposals may be modified or withdrawn by an authorized representative of the Proposer by written notice to the Purchasing Office. III. Availability of Records All relevant documents pertaining to this RFP and procurement process shall be made available by the Purchasing Office upon successful conclusion of the entire procurement process. IV. Late Proposals Any proposal which is not received by the City's Purchasing Office prior to the deadline set forth in this solicitation shall not be considered. The City assumes no responsibility or liability for the transmission, delay, or delivery of a proposal by either public or private carriers. V. Specificity of Information No verbal or written information which is obtained other than through this RFP or its addenda shall be binding on the City. No employee of the City is authorized to interpret any portion of this RFP or give information as to the requirements of the RFP in addition to that contained in or amended to this written RFP document. VI. Errors and Omissions This RFP cannot identify each specific, individual task required to successfully and completely implement this Project. The City relies on the professionalism and competence of Proposers to be knowledgeable of the general areas identified in the Program Scope. Proposers shall not take advantage of any errors and/or omissions in this RFP document or in the firm's specifications submitted with their proposals. Where such errors or omissions are discovered by the City, full instructions will be given by the City in the form of an addenda. VII. Proposal Validity Unless otherwise noted by the Proposer, all proposals shall be held valid for a period of 180 days. 25-222 VIII. Right of Rejection The City reserves the right to: (1) Accept or reject any and all proposals or any part of any proposal, and to waive minor defects or technicalities in such; (2) Request clarification of any information contained in a proposal; (3) Solicit new proposals on the same project, or on a modified project, which may include portions of the original RFP as the City may deem necessary; (4) Disregard all non -conforming, non-responsive, or conditional proposals; (5) Reject the response of any proposer who does not pass the evaluation to the City's satisfaction; (6) Allow for the correction of errors and/or omissions; (7) Select the proposal that will best meet the needs of the City, and (8) Negotiate service contract and terms with the successful Proposer. IX. Non -Compliance Proposers and/or proposals that do not meet the stated requirements may be considered noncompliant and may be disqualified, unless such noncompliance is waived by the City. During the evaluation process, the City reserves the right to request additional information or clarification from those submitting proposals, and to allow corrections of errors and/or omissions. X. Determination of Responsiveness and Responsibility The City shall have sole authority in determining the responsiveness and responsibility of any and all Proposals. For Proposals containing exceptions to specifications and/or requirements, the City shall have sole authority in determining the extent to which exceptions affect the responsiveness and responsibility of any and all Proposals. XI. Obligation to Award The City of Newport Beach is not obligated to enter into a Contract or Agreement on the basis of any proposal submitted in response to this RFP. City reserves the right to award multiple contracts if it is deemed most advantageous to the City. XII. Bidder Reimbursement Prohibition The City will not pay for any information herein requested, nor are they liable for any costs incurred by any vendors prior to award of the funds. The City may require the finalist proposer(s) to provide on-site presentations and demonstrations of the project(s) proposed by the proposer(s). All costs associated with the demonstrations or follow-up interviews are the sole obligation of the proposer(s). XIII. Gratuity Prohibition Proposers shall not offer any gratuities, favors, or anything of monetary value to any official, employee, or agent of the City for the purpose of influencing consideration of this proposal. Submission of a Proposal indicates Proposer certifies that they have not paid nor agreed to pay any person, other than a bona fide employee, a fee or a brokerage resulting from the award of the contract. XIV. Contact with City Personnel or Entities During the RFP procurement process, proposal evaluation process and proposal selection process, the RFP Administrator is to serve as the primary point of contact for any and all matters pertaining to this RFP and Project. Proposers shall not contact any City personnel or entities other than the RFP Administrator or those from the City's Purchasing Office for matters regarding this Project until conclusion of the entire procurement process, which shall be defined as Agreement Award. Unauthorized contact may result in disqualification of Proposals. 25-223 XV. Indemnification Proposer, at his/her own expense and without exception, shall indemnify, defend and pay all damages, costs, expenses, including attorney fees, and otherwise hold harmless the City, its employees, and agents, from any liability of any nature or kind in regard to the delivery of these services. Submission of a Proposal indicates Proposer waives the right to claims for damages of any nature, whatsoever, based on the Proposal solicitation and/or selection process. XVI. Compliance with All Applicable Laws Proposer declares that it shall comply with all licenses, statutes, ordinances, regulations and requirements of all governmental entities, including federal, state, county or municipal, whether now in force or hereinafter enacted, including, but not limited to, appropriate contractor licensing and business licensing. XVII. Subcontractor/Joint Ventures The selected Consultant shall be the Prime Contractor performing the primary functions of the Agreement. If any portion of the Agreement is to be performed by a subcontractor, this must be clearly set forth in the Proposal submittal as to what part(s) is/are to be delegated. The City reserves the right to reject any Proposal wherein use of subcontractors significantly affects the ability of the Proposer to function as the Prime Contractor on the awarded Agreement. The Prime Contractor will, at all times, be responsible for the acts and errors or omissions of its subcontractors or joint participants and persons directly or indirectly employed by them. Acceptance or rejection of a Proposer's request to use subcontractors is at the sole discretion of the City. 25-224 EXHIBIT A Inventory of Existing Rental Housing Units with Affordable Housing Restrictions 25-225 City of Newport Beach Inventory of Rental Housing With Affordable Housing Restrictions Earliest Possible Date of Project Name/ Location Type of Assistance Received Change Number of Units/Type Section 8 (rental assistance vouchers) Newport Harbor Apartments Density Bonus 2020 26 Low -Income 1538 Placentia Avenue Community Development Block Grant (CDBG) Section 8 Newport Harbor II Apartments Density Bonus 10 Low -Income 2023 1530 Placentia Avenue CDBG 4 Very Low -Income In -Lieu Fee Funds Section 8 Newport Seacrest Apartments CDBG 2016 20 Very Low -Income 843 151h Street Fee Waivers 45 Low -Income Tax Credit Financing Pacific Heights Apartments Section 8 2019 7Low-Income 881-887 W. 15th Street Density Bonus Newport Seashore Apartments Section 8 2018 15 Low -Income 849 West 151h Street Fee Waivers Newport Seaside Apartment Section 8 CDBG 2017 25 Very Low -Income 1544 Placentia Fee Waivers 100 Extremely Low and Seaview Lutheran Plaza (Seniors) Section 202 (federal grant) 2039 2800 Pacific View Drive Section 8 Very Low— Income Senior Bayview Landing (Seniors) In -lieu Fee Funds 24 Very Low 1121 Back Bay Drive Fee Waivers 2056 95 Low -Income Tax Credit Financing SOURCE: City of Newport Beach Planning Division 25-226 Attachment E Newport Shores Project Score Sheet and Proposal 25-227 RFP NO. 15-55: AFFORDABLE HOUSING DEVELOPMENT PROPOSAL AND INTERVIEW EVALUATION SCORE VALUES: N/A - Section is Not Applicable 0 - Requirement NOT MET 1 - Requirement PARTIALLY MET 2 - Requirement MET 3 - Requirement EXCEEDED COMMUNITY DEVELOPMENT PARTNERS/MERCY HOUSE RATER 1 RATER 2 RATER 3 RATER 4 Site Control 2 2 2 2 30 -Year Minimum Affordability 3 3 3 2 Acquisition & Construction Costs 3 2 2 3 Securing Funding Sources 3 3 3 2 High Quality Design & Amenities 2 2 2 2 "Green" Building Practices 2 2 3 2 Neighborhood Compatibility & Design 2 3 3 2 Incorporates Community Spaces, Amenities, Services 2 2 2 2 Experience with Successful Housing Projects 3 3 3 2 Readiness to Proceed 3 2 3 3 Ability to Manage Affordable Housing Units 3 2 2 3 Consistency with Housing Element 2 3 3 3 Targets Extremely Low/Very Low/Low-Income Households 3 3 3 2 Considers a Wide Range of Households (Special Needs) 3 3 3 3 Includes Supportive Services for Target Population 3 2 3 2 Value 3 2 2 2 Total: 42/48 39/48 42/48 37/48 Percentage of Total Points: 87.50% 81.25% 1 87.50% 77.08% COMMUNITY DEVELOPMENT PARTNERS/MERCY HOUSE - AVERAGE SCORE: 83.33% 25-228 SLO Request for Proposal No. 15-55 Affordable Housing Development L� 000 00/ ■0■ ■■■ 5-229 25-230 4. Project Description 6. Proposed Implementation Plan Development Concept ...................... 34 Proposed Implementation Plan ............... 83 Site and Property Information ................ 40 Location ................................... 40 7. Applicant Information Form Graphic Depiction of Proposed Project .........42 Attachment A: Applicant Information Form .... 86 Eric Paine Kyle Paine Chief Executive Officer President epaine(@communitydevpartners.com kpaine(@communitydevpartners.com 000 Ili , a// IIS , � 00 111 ■ 111 ■ ■ ■ 111 • • •INI 3416 Via Oporto, Suite 301 I Newport Beach, CA 92663 949.467.1344 I www.communitydevpartners.com 25-231 Z M v O NEWPORTSHORES M M N D W r M O T 1. Cover Letter Description of Management...................62 z I Cover Letter ................................. 7 Evidence of Site Control ......................62 Community Outreach ........................66 N 2. Statement of Qualifications Developer or Service Provider Team ............10 5. Development Pro Forma Developer or Service Provider Experience....... 13 Project Financing Summar 72 Financial Capacity ...........................24 Development Budget .........................73 References.................................26 Financing Sources and Uses...................74 3. Amount of Funds Requested Unit Mix and Income Analysis .................75 Amount of Funds Requested .................. 31 30 -Year Cash Flow ..........................76 4. Project Description 6. Proposed Implementation Plan Development Concept ...................... 34 Proposed Implementation Plan ............... 83 Site and Property Information ................ 40 Location ................................... 40 7. Applicant Information Form Graphic Depiction of Proposed Project .........42 Attachment A: Applicant Information Form .... 86 Eric Paine Kyle Paine Chief Executive Officer President epaine(@communitydevpartners.com kpaine(@communitydevpartners.com 000 Ili , a// IIS , � 00 111 ■ 111 ■ ■ ■ 111 • • •INI 3416 Via Oporto, Suite 301 I Newport Beach, CA 92663 949.467.1344 I www.communitydevpartners.com 25-231 25-232 1. COVER LETTER 00 j/ Ij 0 k � / IIS 0 , III ■ ■ ■ 111 25-233 November 11, 2015 Anthony Nguyen Purchasing Agent City of Newport Beach anguyen(@newportbeachca.gov Re: Request For Proposals No. 15-55 Dear Mr. Nguyen: Community Development Partners (CDP) and Mercy House are pleased to submit this response to the Request For Proposals No. 15-55. Newport Shores is the rehabilitation of a 12 -unit market rate apartment property into 12 units of affordable housing, 7 of which will be set aside for veterans. CDP is an experienced multifamily and mixed-use developer focused exclusively on creating and preserving vibrant affordable housing communities with a focus on California, Oregon, and Arizona. The company's principals have over 30 years of combined experience working with cities and public agencies to bring new investment into existing neighborhoods. The company was formed in 2011 by leaders in the field of residential housing development. With over $75 million in portfolio projects that have been awarded tax credits, a growing pipeline of future projects and a robust tax credit marketplace, CDP is an ideal partner for land sellers and public agencies. Being based in Newport Beach, we are particularly excited to lend our innovative placemaking expertise to the proposed Newport Shores project, as the opportunity to improve one's community is always a welcomed opportunity. Along with Mercy House, our non-profit general partner and service provider, we are confident that we would deliver a project that not only improves the lives of its residents, but also would be a welcomed enhancement for the local community. We are confident that we have met or exceeded the requirements of the RFP. As such: Site control: CDP has a binding commitment to acquire the property (document enclosed) Affordable for at least 30 years: Per the requirements of the project's tax credits, the property will remain affordable for a minimum of 55 years. • Reasonable acquisition and construction costs, the ability to compete well in securing other/ competitive funding sources: As show in the included financials, CDP has underwritten realistic costs and the project project is well positioned to be very competitive for other funding sources. • Leverage other financing sources: CDP has extensive relationships with best -in -class lenders and investors, and will utilize such for this project, including leveraging low income housing tax credit equity as well as: City -provided funds, VHHP funds, and Project Based Rental Assistance. • Incorporate high quality design and amenities: As with all our projects, CDP is passionate about design and we employ high design and material standards, and Newport Shores will incorporate an award- winning design team. 25-234 "Green" building practices and materials: At CDP's core we are committed to sustainability. The project will exceed local and state energy standards, and achieve certification through a recognized green rating program (such as LEED or GreenPoint Rated). Compatible with neighborhood settings: The structure will retain its existing massing and use, which fits well within its surrounding context. Appropriate community spaces, amenities, and services for the target population: We will incorporate appropriate community spaces/amenities and a robust services program through Mercy House including a community garden space and public art components created by local artists. • Experience with successful afFordable housing projects and the capacity to work cooperatively with the community: As discussed in detail throughout this document, CDP is highly experience and committed to developing affordable projects that benefits both residents and the community at large. Readiness of the proposed project to proceed: The project will not require any new entitlements and is currently ready for occupancy by target population. • Management of affordable rental units: Buckingham Property Management, who currently manages 5,000+ units, will ensure on-going compliance and financial solvency throughout the affordability period. • Consistent with the City's General Plan: The property is maintaining its existing legal use, which is compatible with the General Plan. • Target extremely low-income, very low-income, or low-income households: As shown in the included unit/tenant mix, the project fully targets the appropriate income levels. • Consider a range of households: As discussed, over 50% of the units will be set aside for veterans. The remaining units will be set for a range of income levels. • Supportive services appropriate for the expected tenant population: Mercy House, a well-respected service provider, will ensure the needs of the resident population are met on an on-going basis. CDP hereby declares that the only person, persons, company, or parties interested in the proposal as principals are named herein; that the proposal is made without collusion with any other person, persons, company, or parties submitting a proposal; that it is in all respects fair and in good faith without collusion or fraud, and that the signer has full authority to bind the proposer. I can be reached at 949-554-3713, epaine(@communitydevpartners.com, or at 3416 Via Oporto, Suite 301, Newport Beach, CA 92663. Sincerely, Eric cine CEO 25-235 25-236 2. STATEMENT OF QUALIFICATIONS 25-237 A. DEVELOPER OR SERVICE PROVIDER TEAM An organizational chart showing lines of responsibility, os well os o list of team members and their duties os port of the team. DEVELOPER: COMMUNITY DEVELOPMENT PARTNERS ERIC PAINE CEO Ownership: 85% SEAN ROBBINS KYLE PAINE Corporate Finance President Ownership: 5% Ownership: 10% Bruce Quigley, CPA Tim Winger Corporate Controller Asset Manager Lindsay Dutro Victoria Balentine Project Controller Administrative Eric Paine — Chief Executive Officer Mr. Paine is the CEO of CDP and focuses on corporate strategy and business development as well as overseeing the design and construction of all CDP projects. Eric also currently sits on the Board of Directors for two non -profits, The Ecology Center in San Juan Capistrano, CA and Alberta Main Street in Portland, OR. Prior to founding CDP, Mr. Paine co-founded Equity West Capital Partners, a Newport Beach real estate investment manager operating private equity funds targeting distressed assets with inherent value -add potential. Prior, Eric was Executive Vice President of Pacer Communities, a private residential developer based in Irvine, California where, in his five-year tenure, he was involved in developing and liquidating residential units accounting for over $115,000,000 in revenue. He directly supervised the teams responsible for all stages of a project's development cycle — acquisitions, capitalization, design development, entitlements, and project management. Eric earned his BA in Economics with a minor in Accounting from the University of California, Los Angeles, a certificate in Light Construction Development Management from the University of California, Irvine, and is a licensed California Real Estate Broker and General Contractor. Kyle Paine — President Kyle Paine serves as President of Community Development Partners. Kyle manages the sourcing and underwriting for rehab and new construction projects for CDP, including managing each project through the cycle of due diligence, LI HTC application submittal, and the closing. Kyle also oversees the asset management of stabilized assets. Mr. Paine brings a dynamic background in real estate development to CDP's team. Prior tojoining CDP Kyle spent two years at Fairfield Residential, a national apartment developer, builder, and manager where he served as the Acquisition and Development Officer for the Pacific Northwest region and had comprehensive oversight of the sourcing of institutional grade market rate and affordable development sites. Kyle has his Bachelor of Arts in Psychology with a Minor in Business from the University of California at Berkeley. Kyle has worked in real estate brokerage of development projects since obtaining his California Real Estate Broker's License in 2005. Sean Robbins — Chief Financial Officer With over ten years of experience in real estate development finance and senior secured lending, Mr. Robbins focuses on financial product structuring, assets acquisition, and corporate finance. Sean's prior real estate experience includes co-founding Equity West Capital Partners, a Newport Beach real estate investment manager and founding Blackhawk Capital Group, a Newport Beach real estate advisory service and brokerage 10 11 25-238 house. Sean also serves as a member of the board of directors of Eco Land Holdings, an international real estate development company. A Phi Beta Kappa graduate of the University of California, Los Angeles with a major in Business Economics and a minor in Accounting/Public Policy, Sean used his financial acumen to help Comerica Bank expand its commercial and real estate lending divisions. Sean laterjoined GMAC-Cerberus Capital, where he successfully helped fund over $100 million in development and construction financing for public and private companies. In addition to holding a Real Estate Broker's license, Sean is a CFA© Level I Candidate. Bruce Quigley — CPA Mr. Quigley is a Certified Public Accountant and the Controller for Community Development Partners. He is responsible for overall internal and external financial reporting and compliance, interfacing with outside CPAs on financial reporting and taxation related to affordable housing project requirements and regulations, and instituting, strengthening and monitoring related internal controls. After graduating with a Bachelor of Arts in Business Administration with a concentration in Accounting from California State University at Fullerton, he spent eleven years with the CPA firm Pannell Kerr Forster, managing audits of numerous companies in various industries, including non- profits, start-ups, and property management. Vacation Resorts International, a timeshare property management client hired him away to be their lead financial reporting executive. In his twenty year tenure there, the company became the largest independently owned international timeshare property management company in the nation. His responsibilities included oversight of all accounting and financial reporting for the company and 150 managed timeshare entities regionally, nationally, and internationally. His experience included working with the California Department of Real Estate on formulating start-up operating budgets, time share development and rehabilitation projects, ongoing property management financial reporting while working closely with owners and numerous Boards of Directors. SERVICE PROVIDER: MERCY HOUSE Reverend Jerome T. Karcher - Founder/Chairman Father Karcher was born and raised in Anaheim, California, as one of the twelve children of Carl and Margaret Karcher. He was baptized at Saint Boniface Church in Anaheim, California and attended the parish school for eight years. He then attended Mater Dei High School for one year and was graduated from Servite High School in Anaheim. Having attended the University of San Diego and Gonzaga University in Florence, Italy, he was graduated from Loyola University of Los Angeles, with a Bachelor of Arts degree in Psychology. He has also received a degree in Philosophy from the Dominican School of Philosophy and Theology at the Graduate Theological Union, Berkeley, California, where he also studied theology. Theological studies were completed at Saint John's Seminary in Camarillo, California, where a Master of Arts degree in Theology was granted. On February 12,1983 Father Karcher was ordained to the priesthood by Bishop William Johnson for the service of the Roman Catholic Diocese of Orange, California. He has served at St. Norbert Church in Orange, St. Anne Church in Santa Ana and St. Joachim Church in Costa Mesa, and is presently the pastor at St. Vincent de Paul Church in Huntington Beach, California since July 1, 1995. Fr. Jerome is the founder and Chairman of the Board of Mercy House Transitional Living Centers which serves and houses homeless men, women and children in Orange County at its various facilities. 25-239 Housing Director f Housing Advocate IVT ?�,)& K-141�r Organizational Chart / Board of Director --N Y I Operations Director Program Director - Program Director - ProgramDirector - Senior Financial O.C. Residential O.C. Emergency IE Manager ogra Director I ` ^` I Wont Door Grant Compliance Program Manage rmoryandCM Cgggordinator and Data Director utreac Associate - Events our s _L$N Program Program Manages Manager RH and FRP Anaheim Check fn a—intanenceTec Center Teliulittaff Team Manager Homeless Prevention Progress Coach ^V I Ontario Access ,enker Program Sa enB rnaditino _jQusingand Outreach C din or and Rapid Reh using �� Progress Coaches Team Manager Per nryaentHoMsing �/ Progress Coaches Residential Coordinators Development ' ` D elop nt �Fcounting elopment Associate - /Human_ Resources Associate -Grants ommunity Re urces d Admi ciate V Ontario Access Center Staff Ontario Housing and Employment Navigator Ontario Outreach and Engagement Staff I San Bernardino Housing and Employment Navigator San Bernardino Outreach and Engagement Staff 12 13 25-240 Director D elopm nt Grant Compliance Associate- Development and Data Director Communi Associate - Events our s \ ' ` D elop nt �Fcounting elopment Associate - /Human_ Resources Associate -Grants ommunity Re urces d Admi ciate V Ontario Access Center Staff Ontario Housing and Employment Navigator Ontario Outreach and Engagement Staff I San Bernardino Housing and Employment Navigator San Bernardino Outreach and Engagement Staff 12 13 25-240 B. DEVELOPER OR SERVICE PROVIDER EXPERIENCE A narrative describing recent o f fordoble residential development and management experience, with on emphasis on experience gained in the lost five years on projects similar to the one being proposed. Include project name and type (special needs, senior, lorge family, etc.), project address, developer team members, unit count and bedroom type, o ffordobility requirements, funding sources, and project schedule in your description. ii. Include o description of how neighborhood input was solicited and utilized in the development of these projects. GENERAL PARTNER, DEVELOPER 0//1�� , 00/ Ili 0// III 00■ III ■■■ m Sumary of Experience Housing Units Developed by Principals 3,690 Affordable Housing Units Owned or Under Development: 518 Key Representative / Contact Eric Paine, CEO and Founder 3416 Via Oporto, Suite 301 Newport Beach, CA 92663 949.554.3713 epaine(@communitydevpartners.com Overview and Experience CDP is an experienced multifamily and mixed- use developer focused exclusively on creating and preserving vibrant affordable housing communities with a focus on California, Oregon, and Arizona. The company's principals have over 30 years of combined experience working with cities and public agencies to bring new investment into existing neighborhoods. The company was formed in 2011 by leaders in the field of residential housing development. With over $75 million in portfolio projects that have been awarded tax credits, a growing pipeline of future projects and a robust tax credit marketplace, CDP is an ideal partner for land sellers and public agencies. CDP is seeking opportunities to: • Develop successful new multifamily affordable communities • Renovate existing multifamily properties into affordable communities • Partner with cities and other public agencies to evaluate development scenarios CDP is committed to improving the communities in which it works by not only providing quality affordable housing developments, but also ensuring that all CDP developments are sustainable and enhance the fabric of the overall community. Our infill communities are more thanjust housing. Our designs focus on creating centers of culture and education for the surrounding community in addition to fulfilling the basic housing needs of our low-income residents. CDP has a strong focus on the incorporation of the local arts community by integrated artwork and ongoing art programming into the supportive services. Since 2012, CDP has received tax credit allocations on 7 projects consisting of total project costs of over $75 million. In addition to those already owned by the company, CDP currently has a pipeline of 5 sites for future development. CDP currently owns or is planning projects in the California cities of Morgan Hill, Glendale, Santa Ana, Midway City, and Vacaville; Portland, Oregon; and Arizona cities of Mesa and Phoenix. CDP was founded and is based in Newport Beach, California. 25-241 14 15 FEATURED PROJECT: THE LODGE 515 Barrett Ave., Morgan Hill, CA The Morgan Hill Retirement Residence project is a 138 unit senior housing community that has come to fruition after several years of dedicated teamwork. The project has evolved through many iterations of design improvements that began in 2010. At the core, the project's mission consisted of creating a life -enhancing community for seniors that reflected our values of intelligent design, integration of sustainable building principles, and a human -centered solution to affordable housing. The amenity enriched project encourages our residents to interact with one another, relax in an environment they can call home, and to thrive within a well amenitized community. The project consists of one and two bedroom units that provide for independent living. The common area spaces boast a common dining hall, commercial kitchen, beauty salon, theater, card room, and a reading room. Three meals are offered every day through a meal program managed by local non-profit Loaves & Fishes with a focus on locally sourced, sustainable, and healthy ingredients — all provided at no cost to the residents. Lease -up for this project finished July, 2014, well ahead of our partnership closing projections and the project has converted into permanent financing. For neighborhood outreach, we worked closely with local senior center and organizations involved in aging resources to develop an extensive amenity package that rivals any market rate senior living facility. Housing Solution: Senior Affordable Housing (55+) Government Contact: Leslie Little — Asst. City Manager — 408-778-6480 Number of Units: 138 units Lot Size: 5.3 Acres Unit Size: 546 —1,034 Square Feet Unit Mix: 1101 Bed/1 Bath, 28 2 Bed/2 Bath Parking Provided:1 Space Per Unit Affordability: 50%/60% AMI Current Status: Stabilized Financing: 4% LI HTC & Tax Exempt Bonds Sustainability: Green Point Rated Score: 108 Developer: CDP Architect: Anderson Architects Contractor: SBI Builders Property Management: Buckingham Property Management (BPM) Non -Profit Partner: Foundation For Affordable Housing (FFAH) Service Providers: LifeSteps and in-house Resident Services Coordinator Construction: November 2012 -January 2014 25-242 FEATURED PROJECT: CYPRESS SENIOR LIVI NG - 311 E. Cypress St., Glendale, CA Cypress Senior Living consists of the acquisition, rehabilitation and conversion of an existing two- story 18 -unit market rate apartment building in need of upgrading, into a fully rehabilitated affordable senior rental project. Upgrades that were incorporated into the building include all new unit interiors, a community garden, and art work from local artists including a community mural. Financing for the project came from the sale of 9% rehab and 4% acquisition Low Income Housing Tax Credits, which the project was awarded in June of 2013. The project consists of 13 studio units and 4 one bedroom units with an additional studio for the onsite manager. Rent restrictions include 62+ years of age and 6 units rented with Veteran preference. Property amenities include a community area with resident computer for internet and printing access, in addition to on-site social services offered to the residents and 10 surface parking spaces. Affordability levels will be at 30%, 35%,40%, 50%, and 60% AMI levels. The building is a 1920's brick building in the heart of Glendale with immediate access to public transportation, entertainment, and dining options. The Glendale Housing Authority supported the project by providing $1,447,523 in HOME funds for the rehab in addition to providing a below market permanent loan which eliminates the need for conventional permanent financing. The project achieved over a 25% energy efficiency improvement from the buildings original energy consumption. Cypress Senior was completed in May, 2014 and was leased up using a city sponsored lottery program which attracted 2,680 applicants (an average of over 150 per unit). For outreach, we collaborated with local artisans to provide a community created public mural, community garden (with regular monthly programming/planting/harvesting for residents led by local expert) designed and built by The Ecology Center, original artwork for common area spaces sourced by non-profit Art From The Ashes, and original custom furniture built by local resident and furniture designer. Housing Solution: Senior Affordable Housing (62+) Government Contact: Mike Fortney, Senior Housing Project Manager - 818-548-3723 Number of Units: 18 Units Lot Size: .25 Acres Square Foot Range: 344 - 672 Square Feet Unit Mix: 14 Studios, 41 Bed/1 Bath Parking Provided: 10 Spaces Affordability: 30%/35%/40%/50%/60% AMI Current Status: Stabilized Financing: 9% LI HTC, Housing Authority HOME Funds Developer: CDP Architect: Egan Simon Architects Contractor: ICON Builders Property Management: Buckingham Property Management (BPM) Non -Profit Partner: Integrity Service Provider: Central Valley Coalition For Affordable Housing Construction: November 2013 -March 2014 25-243 16 17 FEATURED PROJECT: EL RANCHO 719 E Main St., Mesa, AZ The EI Rancho project is an acquisition/demolition/ new construction project of a blighted motel turned apartments in Mesa, Arizona. CDP is constructing a community of 66 units in a 4 story structure that will serve to house families with children. The local community has a large artist contingent as the City of Mesa has invested heavily in pursuit of creating a local culture conducive to supporting the arts. We have been working closely with local artists as well as the City of Mesa's Art Center to create a product that will engage the community in arts and will allow for the installation of public art pieces. This will be the first project of its type in Arizona. All of the units are 2 bedroom and 3 bedroom floor plans and, in addition to the public art spaces, there is also a large communal gallery, a flexible studio space for children's after school programming, a media room, computer lab, an outdoor eating area, a community arden (in cooperation with Mesa Urban Garden, and a pool. The architecture of the building is a contemporary interpretation of a desert hacienda with clean lines, ground floor storefront, metal awnings, and embedded tiles on the facade in a depiction of rain drops. As water indicates an oasis in the desert so too will EI Rancho be an oasis for the residents who will call it home. Project completion and C of O were achieved in June, 2015. For outreach, this project involved collecting input via focus groups and working with local business leaders to develop a concept and design that would act as a catalyst to spur additional revitalization efforts in the downtown Mesa (AZ) neighborhood. We partnered with a local artist whose family has been in Mesa for generations and he created public and private art installations. His wife's non-profit, Cultural Coalition, is providing ongoing art classes for the the afterschool program hosted at the property for residents' children. Housing Solution: Permanent Rental Housing Government Contact: Jeff McVay, Manager of Downtown Transformation, 480-644-5332 Number of Units: 66 Units Lot Size: 1.4 Acres Unit Size: 842-1,072 Square Feet Unit Mix: 5 2 Bed/1 Bath, 36 2 Bed/2 Bath, 25 3 Bed/2 Bath Parking Provided: Structured parking, 69 spaces Affordability: 40%/50%/60% AMI Current Status: Under Construction Financing: 9% LI HTC, ADOH HOME/HTF, City of Mesa HOME Sustainability: ADOH Prescriptive Path Developer: CDP Architect: Perlman Architects Contractor: ICON Builders Property Management: Celtic Property Management Service Providers: A New Leaf, Cultural Coalition, Mesa Urban Garden Construction: May 2014 -June 2015 25-244 FEATURED PROJECT: BUTTERFIELD RETIREMENT 16505 Butterfield Blvd., Morgan Hill, CA The Butterfield Retirement project is a new construction project of a fallow plot of land that has not been utilized for decades. The roughly 4 acre parcel is adjacent to The Lodge community that CDP developed from 2012-2014. The site will be improved with a new, 114 unit senior congregate care apartment community. The amenity enriched project will encourage our residents to interact with one another, relax in an environment they can call home, and to thrive within a well amenitized community. The project will act as a complementary project to The Lodge and will be nicely appointed with finishes that are true to the architecture of the building. The project consists of one, two and three bedroom units that provide for independent living. The common area spaces boast a common dining hall, commercial kitchen, theater, card room, library, and craft room as well as an integral outdoor dining area. Three meals will be offered every day through a meal program managed by local non-profit Loaves & Fishes with minimal, if any, cost to residents. The project outdoor courtyards provide ample outdoor recreation opportunities and an abundance of community gardening areas. Groundbreaking is scheduled to take place Fall 2015. Housing Solution: Senior Affordable Housing (55+) Government Contact: Leslie Little — Asst. City Manager — 408-778-6480 Number of Units: 114 Units Lot Size: 4.0 Acres Unit Size: 550 — 1,000 Square Feet Unit Mix: 601 Bed/1 Bath, 24 2 Bed/1 Bath, 12 2 Bed/2 Bath, 18 3 Bed/2 Bath Parking Provided:1 Space Per Unit Affordability: 50%/60% AMI Current Status: Planning Financing: 4% LI HTC & Tax Exempt Bonds Sustainability: Green Point Rated 25-245 FEATURED PROJECT: ROCKY HILL Rocky Hill Rd., Vacaville, CA VCH-Rocky Hill is a proposed 92 -unit affordable scattered site development involving acquisition, rehabilitation and new construction. Community Development Partners (CDP) and Vacaville Community Housing (VCH) have formed Trower Housing Partners LP, which will acquire, construct and manage the proposed development. The partnership plans to acquire and rehab Meadows Court apartments, an existing affordable apartment community totaling 51 units currently controlled by Vacaville Community Housing. The property is made up of 2-bedr000m Townhome style units, currently rent restricted with AMI levels from 50% to 80% and carry existing soft debt made up of RDA and HOME funds. The scope of rehab will include unit interior and building systems upgrades to improve energy efficiency, enhance living conditions and ensure long term project viability. The new construction portion of the development will entail the acquisition of a 1.42 -acre City -owned vacant parcel for construction of 41 new apartment units targeting families and single Veterans. The site plan includes 11 one -bedrooms, 15 three-bedroom and 15 four-bedroom units with surface / tuck -under parking, common areas and onsite property manager. Both properties will be leased and managed by a third party property management company and will include supportive resident services. Housing Solution: Family & Supportive Housing, Veteran Government Contact: Emily Cantu, Housing & Redevelopment — 707-449-5675 Number of Units: 92 Units Size: 4 Acres Unit Size: 640 -1280 Square Feet Unit Mix: 21 Studio/1 Bed/1 Bath, 412 Bed/2 Bath, 15 3 Bed/2 Bath, 15 4 Bed/2 Bath Parking Provided: 1.5 Spaces Per Unit Affordability: 15%-60% AMI Current Status: Entitlements Financing: 4% LIHTC &Tax Exempt Bonds plus RDA and HOME funds, VH HP, Project Based Vouchers Sustainability: LEED Platinum . �Itt �9 1- r p� 18 19 25-246 FEATURED PROJECT: CASCADIAN TERRACE 5700 N. Kerby, Portland, OR Cascadian Terrace is an existing 103 -unit affordable apartment community that was purchased by Community Development Partners as part of a preservation strategy. The 4 -story property is made up of studio, 1 -bedroom and 2-bedr000m units, currently rent restricted with AMI levels at or below 60% based on LI HTC that were allocated to the property in 2002. The property operates under a Section 8 project - based HAP contract. The property is located in a rapidly gentrifying neighborhood of NE Portland and CDP has partnered with Portland Community Reinvestment Initiatives as the project Non -Profit sponsor. In 2018 CDP will apply for new 4% LI HTC and complete a full interior renovation while keeping the tenants and HAP contract in place to preserve long term affordability and minimize displacement. Housing Solution: Low Income Housing Number of Units: 103 Units Size: 1.14 Acres Unit Size: 332 - 997 Square Feet Unit Mix: 86 Studio/1 Bath, 161 Bed/1 Bath, 1 2 Bed/1 Bath Parking Provided: 19 Spaces Affordability: 60% AMI Current Status: Stabilized Financing: LISC Acquisition Loan, HAP Contract 25-247 20 21 FEATURED PROJECT: IST STREET CARE HOME 2151 East 1st St., Santa Ana, CA 1st Street Care Home consists of the acquisition, rehabilitation and conversion of an existing two-story 77 - unit motel in need of upgrading, into a permanent supportive housing project. Upgrades to be incorporated into the building include all new unit interiors, adding community room, offices, common area kitchen, and laundry room. Financing for the project will come from the sale of 4% Low Income Housing Tax Credits along with Tax Exempt Bond Financing. The project will operate under the City of Santa Ana's Care Home definition and will not have kitchens but will have access to a shared kitchen as well as access to meals provided by a local non-profit. Property amenities include a community area with resident computer for internet and printing access, in addition to on-site social services offered to the residents, a pool, onsite laundry and 61 surface parking spaces. Location: 2151 East 1st St., Santa Ana, CA Housing Solution: Permanent Supportive Housing Number of Units: 72 Units Size: 1.30 Acres Unit Size: 640 Square Feet Average Parking Provided: 61 Spaces Affordability: 15% - 60% AMI Current Status: Entitlements Financing: 4% LI HTC & Tax Exempt Bonds Project Based Vouchers (through Mercy House partnership) Sustainability: LEED J T I 25-248 FEATURED PROJECT: POTTERS LANE 15171 Jackson St. Midway City, CA Potters Lane is a proposed 16 -unit permanent supportive housing development involving new construction utilizing repurposed shipping containers. Community Development Partners (CDP) is the Developer for American Family Housing (AFH) and will oversee the project through to stabilized operations after which time AFH will manage the ongoing operations. The underutilized property will be improved with 16 studio apartments restricted with AMI levels from 15% to 40% and 6 of the units will be set aside for Veterans. The property will be leased and managed by AFH and will include supportive resident services onsite and at the AFH headquarters next door. Housing Solution: Permanent Supportive Housing Number of Units: 16 Units Size: 0.41 Acres Unit Size: 425 Square Feet Unit Mix: 16 Studio/1 Bath, Parking Provided: 5 Spaces Affordability: 30%-60% AMI Current Status: Entitlements Financing: VHHP, HOME, AH P, AFH Equity Sustainability: LEED Platinum IE 7WCI11111�11� i Z M v O N 0 M M N N D M M 3 Z O A C: D T_ n D O Z In N 25-249 22 23 FEATURED PROJECT: THE MARQUEE 620 N 2nd Ave., Phoenix, AZ The Marquee is a 1958 building which exhibits excellent mid-century desert modern architectural elements and was begging to be restored after several decades of neglect. CDP chose the neighborhood for the project based on the transit - oriented, vehicle independent, urban location in the heart of Roosevelt Row Arts District. The building was selected based on the capacity for transformation through an upcycle of an existing structure which would provide a high quality of life to income restricted seniors. The project also features a large mural, a resident herb garden and a rotating gallery of local artists work. Our residents are energized and empowered by the urban location, the sustainable measures incorporated, and the smart interior finishes. For neighborhood ourreach, we polled neighborhood groups and worked with organizations such as the Roosevelt Row Arts District to understand needs of community, create a project that would best accommodate local need from seniors yet be contextual. Housing Solution: Senior Affordable Housing (62+) Government Contact: Jeanne Redondo — ADOH Rental Programs Administrator — 602-771-1031 Number of Units: 34 Units Lot Size: .55 Acres Unit Size: 600 Square Feet Unit Mix: 341 Bed/1 Bath Parking Provided: 1 Space Per Unit Affordability: 40%/50%/60% AMI Current Status: Stabilized Financing: 9% LI HTC/State Housing Trust Fund Sustainability: ADOH Prescriptive Path Developer: CDP Architect: Anderson Architects Contractor: Adolfson Peterson Property Management: Biltmore Property Management Service Provider: La Frontera Construction: October 2012 -March 2013 25-250 SERVICE PROVIDER / NON-PROFIT CO -GENERAL PARTNER FT��Y Hclllil�r_ Affordable Housing Units Serviced 516 Contact Information Linda Wilson 807 N Garfield, Santa Ana, CA 92701 lindaw(@mercyhouse.net 714.836.7188 Overview / History Mercy House's primary focus is providing quality permanent housing and services to additional populations that range from extremely low to moderate -income households. Father Jerome T. Karcher first began reflecting seriously on the plight of the homeless in 1987 while he was Associate Pastor at Saint Norbert's Church in Orange, California. His first efforts were to organize a small group of friends to assist the homeless. As Associate Pastor at Saint Anne Catholic Church in Santa Ana, he became more aware of the needs of both homeless and immigrant populations. One experience concerning the needs of an immigrant young man who was living on the streets in an abandoned garage particularly moved him to respond to the local situation of homelessness. This decision inspired him to found Mercy House as a not-for-profit charitable corporation. Housing Placement During the 2013-2014 fiscal year, Mercy House set a goal to prevent or end the homelessness of 500 people. They were able to secure and maintain stable housing for 566 individuals who came through their doors! Homeless Prevention Mercy House's Homeless Prevention Program rescued 64 families, including 153 men, women and children, from losing their homes, falling into homelessness and entering the shelter system. Emergency Shelters and Services This year, Mercy House served 4,353 homeless individuals; meeting immediate needs an providing connections to restore dignity and stability. This includes 2,010 people through their Emergency Shelter Programs, 535 through their Family Redirection Program, 1,384 at the Ontario Access Center, and 424 at the Anaheim Check in Center. Permanent Housing Mercy House's ongoing permanent housing programs were able to provide housing to 266 unduplicated individuals; including 177 people through Rapid Re -Housing, 22 through their Shelter Plus Care program, 34 in their Master Leasing Program, and 93 in their affordable housing programs. Transitional Shelter This year, Mercy House served 198 homeless men, women and children in their transitional shelters; of those 87% successfully transitioned into their own stable housing, or remain active in our programs. 25-251 C. FINANCIAL CAPACITY Description of f rionciol strength and ability to obtain project f rioncing, and to provide sufficient equity for the successful completion of the proposed project. CDP is well capitalized with over $70 million dollars in active projects under management in which CDP is the General Partner. The Company has no underperforming or overvalued projects that will distract management or tie-up capital. CDP has been in discussions with several potential lenders and is planning on closing the acquisition transaction using a loan product such as the Golden State Acquisition Fund from CenturyHousing. Century is a leading Community Development Financial Institution (CDFI), whose lending activity has resulted in the development and preservation of more than 24,000 affordable homes and apartments in communities throughout the state. CDP has an approved term sheet from Century and has started or completed all of third party reports needed. Include o description of current relationships with major lending institutions. The following financial partners have been involved in recent transactions with CDP and are provided as professional financial references. LISC (www.lisc.org) Role: Lender LISC Affordable Housing Units Financed: 313,400 Key Representative: Celia Smoot, National Housing Director Email: Csmoot(@Ilsc.org I Tel: 215.370.0919 Boston Financial (www.bfim.com) BOSTON FINANCIAL Role: Tax Credit Investor INV LS'1MENT MANAGEMENT Affordable Housing Units Invested In: 169,000 Tax Credit Investments Under Management: $9,200,000,000 Key Representative: Roy Faerber, Senior Vice President Email: Roy.faerber(@bfim.com I Tel: 310.860.1321 Projects: Lodge (tax credit equity - syndicated via BF to Mass Mutual); Cypress (tax credit equity syndicated into multi -investor fund) Citi (www.cltl.com) Role: Construction Lender loo!"11111ii, Total Loans Originated For Affordable Projects: $3,222,000,000 in 2014 t 1 Key Representative: Mike Hemmens, Director Email: mike.hemmens(@citi.com I Tel: 805.557.0933 Projects: Cypress (construction); , The Lodge & Butterfield (construction & permanent loans) 24 25 25-252 Alliant Capital (www.newportpartners.com) Role: Tax Credit Investor Affordable Housing Units Invested In: 13,300 Key Representative: Ruby Dhillon, Vice President Email: rdhillon(@newportpartners.com I Tel: 714.623.3196 Projects: EI Rancho (tax credit equity - syndicated toJP Morgan) Chase (www.chase.com) Role: Construction Lender Total Loans Originated For Affordable Projects: $1,287,000,000 in 2014 Key Representative: Alice Carr, Western Regional Manager Email: alice.carr(@chase.com Tel: 213.621.8396 Projects: EI Rancho (construction loan) CHASE! F ii. The developer which is selected for recommendation to City Council, or if o partnership, the team members who will retain on ownership interest in the project, will be required to submit complete f nonciol statements for the lost three years. Because of the possibility of public records requests, the City cannot guarantee that these statements will remain con f dentiol. Should CDP be selected for recommendation to City Council, CDP agrees to submit complete financial statements for the last three years. CDP understands that because of the possibility of public records requests, the City cannot guarantee that these statements will remain confidential. 25-253 D. REFERENCES Include o list of of least three references from public agency partners and professional lenders and investors with full names, contact in formation, and identi ficotion of the projects) worked on. FINANCIAL REFERENCES CDP is pleased to provide the following financial references. The financial references are able to detail their relationship, investments and experience working with CDP. Investor Entity Boston Financial Investment Management, LP Contact Roy Faerber, Senior Vice President - Equity Production Phone 617-488-3390 Email/Web roy.faerber(@bfim.com I www.bfim.com Address 1801 Century Park East, 22nd Floor, Los Angeles, CA 90067 Projects Lodge (tax credit equity); Cypress (tax credit equity - syndicated into multi -investor fund) Investor Entity Alliant Capital Contact Ruby Dhillon, Vice President Phone 818-668-2819 Email ruby.dhillon(@alliantcaptial.com Address 21600 Oxnard Street, 12th Floor, Woodland Hills, CA 91367 Projects Marquee (tax credit equity) Lender Entity Citi Contact Mike Hemmens, Director, Citi Community Capital Phone 805-557-0933 Email mike.hemmens(@citi.com Address 325 E Hillcrest Dr., Suite 160, Thousand Oaks, CA 91360 Projects Lodge (construction and perm) Lender Entity LISC Contact Celia Smoot, National Director of Housing Phone 804-358-2421, ext. 26 Email csmoot(@Iisc.org Address 413 Stuart Circle, Suite 300, Richmond, VA 23220 Lender Entity Chase Contact Alice Carr, Western Regional Manager, Community Development Banking Phone 213-621-8396 Email alice.carr(@chase.com Projects EI Rancho (construction loan) 26 27 25-254 GOVERNMENT REFERENCES The references provided below will detail their time and experience currently working with CDP on public/ private partnerships as part of our affordable communities. City of Glendale Contact Mike Fortney, Housing Project Manager Email mfortney(@ci.glendale.ca.us Phone 818-548-3723 Address 141 N. Glendale Ave., Suite 202, Glendale CA 91206 Contact Peter Zovak, Deputy Director of Housing, Community Development Email pzovak(@glendaleca.gov Phone 818-548-3111 Address 141 N. Glendale Avenue, Room 202, Glendale, CA 91206 Projects Cypress Senior Living City of Mesa Contact John Wesley, Planning Director Email john.wesley(@mesaaz.gov Phone 480-644-2181 Address 55 N. Center St., Mesa, AZ 85201 Projects EI Rancho City of Morgan Hill Contact Mayor Steve Tate Email steve.tate(@morganhill.ca.gov Phone 408-778-6480 Address 17555 Peak Avenue, Morgan Hill, CA 95037 Projects The Lodge; Butterfield Retirement 25-255 25-256 3.AMOUNT OF FUNDS REQUESTED 00 Is ,0/ 00// II S on ■■ , 25-257 30 31 25-258 AMOUNT OF FUNDS REQUESTED CDP anticipates requesting $1.975 million of funds, as a residual receipts loan, to purchase and rehabilitate the 12 -unit subject property. The funding will be structured as a loan so that the funds can eventually be redeployed by the City A detailer Development Pro Forma is available in Section 5 of this document. 25-259 25-260 4. PROJECT DESCRIPTION 00 Is 0 j 0 / Ij 0// IIS , so: � ■ III ■ ■ ■ 111 25-261 A. DEVELOPMENT CONCEPT The development concept for the site or a description (with photographs) of the site, building, proposed building square footage, number and size of units/ bedrooms, total parking spaces, proposed ingress and egress, proposed rents and tenant incomes, any special needs groups to be served, amenities to be provided to the tenants, and resident manager's unit. If there will not be a resident manager for a rental project, describe in detail how the project will be managed. PROPERTY DESCRIPTION Constructed in 1963, this 12 -unit, Newport Beach property is one of very few buildings of this size in all of Newport Beach. This is one of the few buildings exceeding four units in the immediate West Newport Beach area including the peninsula. The Newport Shores apartments are located in the coastal and beach -adjacent area known as West Newport. All units are one-bedroom/one- bathroom, some with largebalconies. There are ten covered carports, and three units come with an enclosed garage. CDP will complete minimal repairs to the building until the tax credit financing is awarded at which time a substantial renovation of the interior units will take place as well . Our General Contractor has walked and inspected the property already. Given the small number of units and relative condition of the building, we have in-depth knowledge of the property's physical condition. PROPERTY SUMMARY Units 12 Year Built 1963 Total SF 4,825± Parcel Number 045-114-15 Buildings 2 -Story, Garden -Style Construction Type Frame & Stucco Roof Type Flat Built -Up Parking 10 Carport Spaces, 3 Enclosed Garages Ingress/Egress Via PCH or 60th Street UNITAMENITIES Granite Countertops* • New Kitchen Appliances* New Flooring* • Balconies* * Select Units COMMON AREA AMENITIES Three Enclosed Garages • Ten Carports • Laundry Room • Private Swimming Pool • Locatedjust off Pacific Coast Highway • Nearby Amenities • Additionally, there will be offsite services provided by Mercy House (see Statement of Qualifications for detailed overview) SPECIAL NEEDS GROUPS SERVED Seven (7) units will be set aside for Veterans, six with project based rental assistance and one not eligible for the rental assistance. PROPERTY MANAGEMENT The project will be managed by Buckingham Property Management, who currently has 5,000+ units under management. The management company would handle day-to- day operations, including compliance, leasing and marketing, maintenance, rent collection and lease enforencement, as well as other customary management duties. Since 1974, its founder Paul Chubick managed a broad range of properties throughout California while developing a special knowledge of residential properties in cities both large and small of the central San Joaquin Valley. Buckingham currently manages over 5,000 units in a wide range of conventional and compliance apartment 34 35 25-262 communities. Buckingham Property Management has extensive experience in working with clients to develop new sites and successfully complete the rent up process quickly. With over 30 years of experience with specialized housing programs such as Sec 42 Tax Credit, RD 514-515, HUD, HCD, AHP, Bond and CaIHFA; Buckingham has the proven track record to handle the complexities of regulations and requirements that are an ever increasing burden in residential properties. Buckingham Property Management has extensive experience with the initial lease UNIT MIX AND TENANT INCOME up, rehabilitation, and ongoing operation of Conventional -Compliance apartment projects throughout California. Expertise in quickly achieving and then maintaining high occupancy at competitive rents combined with strong cost control and economy of operations has resulted in outstanding satisfaction by our clients. Services will be provided by Mercy House. PROPERTY PHOTOS On the following pages, please find photographs of the site and property in its current condition. 1 Bed -1 Bath - VASH 30% 6 $1,475 $42 $1,433 $8,598 $103,176 1 Bed -1 Bath 40% 2 $703 $42 $661 $1,322 $15,864 1 Bed -1 Bath 50% 3 $878 $42 $836 $2,508 $30,096 1 Bed -1 Bath - Non-VASH Vet 60% 1 $1,054 $42 $1,012 $1,012 $12,144 Totals 12 $13,440 $161,280 25-263 v 'r 0 % 407 tof Win 7 ti Z m v O N 2 O X m N iTJ O m n m m N n iTJ O Z 25-267 B. SITE AND PROPERTY INFORMATION Provide basic site in formation such os property address, lot area, existing uses, current Generol Pion designation and zoning, consistency with zoning or if rezoning is required. PROPERTYADDRESS 6001 Newport Shores Drive Newport Beach, CA 92663 (APN: 045-114-15) LOT AREA 7,044 square feet (0.16 acres) EXISTING USES) Multi -family Apartments CURRENT GENERAL PLAN DESIGNATION/ ZONING CV: Visitor Serving Commercial CONSISTENCY WITH ZONING As the project is a rehab of an existing property and neither the use nor the unit count will change, the property is consistent with the current zoning and use. As such, no rezoning or change of use is required. C. LOCATION Describe the property location, neighborhood, transportation options, tocol services, and amenities within close proximity to the site. LOCATION / NEIGHBORHOOD The Newport Shores Apartments are situated in the city of Newport Beach, located on the Pacific Coast of central Orange County, which boasts 176 miles of coastline and is renowned for its quality residential neighborhoods, beautiful coastal lands and harbor, excellent fishing, surfing, boating opportunities, shopping venues, ecological preserves, and festivals. Newport Beach has nearly reached build -out, which has resulted in very strict new development guidelines. Economic development efforts have been directed toward improving existing villages and commercial structures. Nearby colleges include the University of California at Irvine (UCI) (24,000 students), Concordia University, the University of Phoenix -Southern California Campus (18,075 students), Coastline Community College (2,940 students), and Orange Coast College (13,224 students). Major employers include Hoag Memorial Hospital (2,700 employees), Pacific Mutual (2,020 employees), and Rockwell International (1,700 employees). Fashion Island, a local shopping venue, attracts millions of visitors annually. Other retail, recreational and historic attractions include Balboa Island, Balboa Village, Cannery Village, McFadden Square, Corona del Mar, and Mariner's Mile. Local air travel is provided by The John Wayne Airport which serves as the hub to Newport Beach and Orange County, and is only a 15 -minute drive from the property. 40 41 25-268 TRANSPORTATION OPTIONS (BUS STOPS) ---------------- 47 LOCAL SERVICES AND AMENITIES OPI.--p- QPlazml� Sup Npyy'r11. Plast y1 :•) HypiI�IPIOCentgp AQP 0.25 -MILES'-" tz acmrt gym]' "All ........... �Iv S-1. He,ghtn P.,Fs, 22 —0— w 94 41vis. l 1�a Y/ Cb goo ryq°i 0 ec -------------- --f --------------- ----- -------- 4,: d -1-MILE-'' 2-h4LE., 3-111ILE 0 "4 -MILE C). Banks Retail Entertainment Grocery Stores/Supermarkets Restaurants Medical / Social Servicss Schools / Libraries Parks 25-269 D. GRAPHIC DEPICTION OF PROPOSED PROJECT Provide o graphic depiction of the proposed project consisting of o preliminary site pion and elevation. Please see updated architectural and design package on the following pages. 42 43 25-270 ASSESSOR MAP YK, MM WFS YNEFu•m wn CHANGE CgM*Y F65E'e9.711 OEC }. iIAPOBE601RY. 9�rt WfES NOOG�E�SO ITS,{0.yHacr NOn A56tlY[SMFt' uABF.m Fon Oi+EEP 43E -L NO} W K AE>m-u1 fpHT3 EIE3EAYm. pOpE�ryrytTpulluE couN11'FS:E3^AA tvm NEwPORr SHORE is i7 q T 01 a • .e # L N COAST MARCH 1949 r^g1 1• V Nwr 9v 7 07 M Oso sr ma car a O3 R1 VER $ O171VE ,Yaws W I) SEASHORE COLLWy TR AVO, M.M. 7-E5 RIVER SEGrR7N MAl. 4-25 ti 45 -II R &VLEVARO NOTE — .49SESSOR•S &.CCK d PARCEL NUM@ERS SHOWN IN CIRCLES ASSESSOP's MAP BOOK 45 PAGE 11 COUNTY Of ORANGE Z m v 0 N 2 0 .TJ m N .TJ 0 m (7 m m N l7 .TJ 0 Z 25-271 newport shores 10.12.15 bettershelt1g, Newport Shores residential design enhancement package. A classic design approach that results in a timeless and contemporary aesthetic by utilizing simple sustainable materials. Create a new sense of community for future tenants to enjoy. Provide communal areas for gardening, relaxation and fun. Interact with local artists to create a local urban experience. A welcome addition to the existing Newport Beach landscape. bettershelt#X, Site Construction Site preparation & site demolition Resealing of parking lot Removal of asphalt for new planting wells Filling in of existing pool and removal of pool fencing Repair of broken/damaged flatwork as needed Demolition Remove all windows& frames Remove all exterior stucco and plywood soffit Removal of exterior light fixtures Remove roofs (subject to type of new roof) Removal of gutters Remove exterior dry rot Remove unit items including: All cabinets, vanities and countertops All exterior front doors & frames All windows & frames (included above) All interior doors and frames All interior door hardware All drywall cuts as needed for electrical upgrades All floor finishes — vinyl & carpet All window coverings All bathroom accessories All kitchen appliances including kitchen good All water heaters All plumbing fixtures All HVAC/heat systems All smoke detectors All exhaust fans All Electrical fixtures and outlet & switch covers Sanitary sewer Scope all main lines — repair as directed Asphalt pavement Slurry seal Stripelpaint Wheel stops all spaces Fencing & Gates New decorative fencing Pedestrian gates to adjacent open space Trash enclosure gates Site furnishinas To be selected Landscape & Irrigation All new landscape & irrigation including community garden Outdoor gathering space BBQ area Masonry Redesigned block wall alongside adjacent to open space Wood & Plastics Finish Carpentry — as required Architectural casework — interior trim Cabinets — all new at units Counters & Vanities — solid surface — all new at units Stairs — repairs where needed Wood decorative siding at fagade Thermal & Moisture Protection Insulation —existing to be examined, must meet energy requirements Waterproofing — weather barrier for any new siding Roofing —TPO or built up or foam Gutters, downspout & roof flashing Flashing — including any necessary wall caps Caulking and Sealant Sealing second floor decks Door & Windows Doors & frames — new front doors and frames New interior doors & jambs New sliding doors to balconies Windows —all new Hardware — all new Skylights — all new or remove Comply with City egress requirements Finishes Drywall - repair where necessary Siding Systems - wood decorative siding in select locations Ceiling — repair only where necessary, scrape acoustic ceilings Flooring - all new in units - resilient flooring or vinyl plank Painting — exterior - all Painting— interior — all Specialties Signage Monument sign/mural Building Signage — new throughout Bath Accessories — all new in units Fire Protection Specialties — exterior fire extinguishers Equipment Kitchen Equipment — range, micro hood, refer, dishwasher - all new in units Furnishings Window Coverings —all new in units Special Construction Hazardous Material Remediation — to comply with environmental survey Solar PV Panels — to be selected Laundry Room Upgrades — new flooring, drywall where needed, painting, light fixtures, venting, WID equipment Mechanical & Plumbing Plumbing Equipment — all new central hot water system Plumbing Fixtures —all new in units including garbage disposal HVAC Systems — new heating in all units Exhaust Fans - all new at bathrooms Electrical Electrical Equipment — new interior subpanels Electrical Finish — interior — new fixtures, outlets, and covers, as required New smoke detectors & carbon monoxide detectors Electrical Finish — exterior — new fixtures Security Access & Surveillance — camera system, FOB access to common areas New ceiling fans Framing convert one unit to be ADA accessible Seismic Retrofits to be applied per code bettershelt1g, newport shores existing condition - front vier bettershelt#X, newport shores A ..... ...... PF 'Ail r proposed design - front view bettershelt#X, new canvas awning and frame 4" pine wood planks; natural finish newport shores new pin mounted signage new fascia applied;painted passion stucco; new light new metal fruit vine painted fixtures frame garage doors new double pane windows 4" wood planks; painted stucco; painted 4" pine wood planks; natural finish at entry bettershelt#X, Lis 0 dll Cr ' 1 ■ s... � MAN, wtw d. ,' � rte• + � •,_ r �. '���,� .' .+ '�,;r� ��. �`'�'� !;� • � � '� � �� f � f _ r ► �. y Vii- ~ � `'•� . • � '� �, r�-� { �� ► -. � 1• � .. ` 4 -•� {fig �r -r�� E-�-.'�.-,'�r,�� .tip ,. � _ �� � ...,%•� _ ' _+�" , _ -'*.. ` - �'� - . newport shores - -16 XWT— OL ti s proposed design - back vier bettershelt#X, replace existing railing update existing railing; paint - newport shores stucco; painted 1 new light fixtures paint existing new light fixtures block wall lova impact 4" pine wood planks; natural finish M el, F new slatted security gate 4" wood planks; painted stucco; painted replant existing planters paint existing planters bettershelt#X, Vk existing condition - side vier newport shores bettershelt#X, newport shores proposed design - side view bettershelt#X, new double pane windows painted new fascia applied -painted 4" wood planks; painted newport shores new canvas awning and frame existing storage; paint same as stucco passion fruit vine stucco; painted 4" pine wood planks; natural finish at entry 4" wood planks; painted bettershelt#X, r { -sem �` � •� + r .via, 051 {' d. r ti r jj_ rl exualr . A-molUlit: illl P 9 0 "-. . board formed raised concrete planters - communal gardening common area covered niche dining area proposed site plan newport shores existing existing raised existing existing planter I planter I planter planter I I planter w` 4 decorative the built-in lounge area with bench awning -to match front decks r. 74.1,-.40A. exposed a.. -.. - pathways wood decking california natives 1 drought tolerant plantings (all ex. planters) bettershelt#X, proposed design vibe newport shores Now*"�MiM� -MMI L proposed garage doors bettershelt#X, newport shores the \/\/Po RT SHORES proposed signage and local artist application bettershelt#X , C'r L '�' I ,}y{�44'' .'� � ``;; ".l �. ; %r � � .� ��, �. , ��t� -�, � tike` `� � � r► 1_ '` - // �`r 1�M ,�*Y''3 ♦pF•�. � �*T� ~`/ i' /* �r � � }r�.�r , 1 � ��. � K T `l � '� }f.L �� 7 �L t I `J '��+- f..i i�d Zf�%ti��-'�•�� 1 r�' ',�' .'f \ �ir1i{ I ,��' •, .i • � � 1 �I � '� i• } � S.�{ 1 K� 9 :04 -Mir 4e 4 re 1 r411, " " % I! r 01:419 I AZI i i r a A,- proposed plantings - native drought tolerant species newport shores conceptual common area design elements bettershelt#X, k R.. - common area planters for communal gardening newport shores .a L ,. ' ate• 11/�' 1 ~:.` Fx r 1 • � = 4�' X41. �` •a`'7F � -_ �. lip }} t • • 4 go 00 if "Indalft- 00 a � � � r -000 r 1 common area speciality the common area niche dining area bettershelt#X, 77- _0000 ■ NA, �i►.►II I III �Illl%%%j r/ #L ■ .074 V *lus[• E. DESCRIPTION OF HOW THE PROJECT WILL BE MANAGED The project will be managed by Buckingham Property Management, who currently has 5,000+ units under management. The management company would handle day-to-day operations, including compliance, leasing and marketing, maintenance, rent collection and lease enforencement, as well as other customary management duties. Since 1974, its founder Paul Chubick managed a broad range of properties throughout California while developing a special knowledge of residential properties in cities both large and small of the central San Joaquin Valley. Buckingham currently manages over 5,000 units in a wide range of conventional and compliance apartment communities. Buckingham Property Management has extensive experience in working with clients to develop new sites and successfully complete the rent up process quickly. With over 30 years of experience with specialized housing programs such as Sec 42 Tax Credit, RD 514-515, HUD, HCD, AHP, Bond and CaIHFA; Buckingham has the proven track record to handle the complexities of regulations and requirements that are an ever increasing burden in residential properties. Buckingham Property Management has extensive experience with the initial lease up, rehabilitation, and ongoing operation of Conventional -Compliance apartment projects throughout California. Expertise in quickly achieving and then maintaining high occupancy at competitive rents combined with strong cost control and economy of operations has resulted in outstanding satisfaction by our clients. CDP has collaborated with Mercy House to provide supportive services designed to help residents be successful in their housing and promote continued self-sufficiency. These services are offered at no cost to residents. A Progress Coach or Services Coordinator will be available to provide on-site services that are tailored to the needs of each household. Individual supportive service meetings will be held monthly or more frequently, if requested. Group meetings and special events are also offered and are designed to foster a sense of community and positive resident relations. Topics that are addressed may include: • Money Management • Life Skills • Problem Solving • Community Resources • Referrals Mercy House will facilitate the delivery of services for veteran residents and residents with special needs. Services for veteran clients are enhanced through strategic partnerships with veteran service agencies. Mercy House works closely with the VA Long Beach Health Care System to provide its clients with health related services including hospital services, mental health screenings, substance abuse counseling and TB testing. In addition, Mercy House will work with the Orange County Veterans Service agency to assist with assessing and processing VA eligible benefits. The tenants in the VASH voucher program will also have access to the VA Case Management services. F. EVIDENCE OF SITE CONTROL Provide evidence of site control. Site control must be maintained until the property is acquired. 64 65 25-292 Z M v O N 2 O X ICDP M N June Z9, 2015 Steven Brambal Broker Hendricks-Berkedia 5000 West Birch Street Suite 4000 Newport Beach, CA 92660 Re: Letter of Intent for 12 knit apartment bullding located at 6003 Newport Shares Drive, Newport Beach, APN 045-114.15 Dear Mr. Brombal: The purpose of this letter is to set forth the terms and conditions under which Community Development Partners )"Buyer") will enter into an agreement with Paul Step`ten Foley Trust ("Seiler') for the purchase of the above referenced property, including the land and all improvem ents, development rights, contracts, and fees paid pertaining thereto (collectively "Property"). Purchase Price. The purchase price will be Throe Million Four Hund Ninety Fere Thousand Dollars ($3.495,000). 2_ Rmmnt of Purchase Frige, The purchase price for the Property will be paid as follows: (a) Buyer will deposit into escrow One Hundred Thousand Dollars ($100,000) ('Earnest Deposit") within one (1) day following the opening of escrow. Earnest Deposit shall Become non-refundable based on milestones below. All deposits are applicable to the Purchase Price, the balance of which wil he paid in full at Close of Escrow, (b) Fifty Thousand dollars ($50,0W) of the Earnest Deposit to be non-refundable upon the approval of the Due Diligence Period. [G) Fifty Thousand Dollars ($50,000) of the 17arnest Deposit to be non-refundable upon final approval received from Buyer's lender. Title. Title to the Property will be conveyed to Buyer by grant deed Qn dose of escrow. Title shall be conveyed subject to no monetary liens except for the payment of non -delinquent real property taxes, or other exceptions approved by Buyer. 4. Escrow. The "Openins of Escrow" shall be de'►ned as the date on which escrow holder has received the fully, executed Purchase and Sale Agreement from Buyer and Seller herein. Escrow 3416 Via Oporto, Ste 301, Newport Beach, CA 92663 T:94SA67.1344 M 866.337.3243 www.ccrmmunitydevpartners.corn �5� g1C D P CC)MmuNi'ry ©iz m oP.%c.ti rPAKiNFAS holder is instructed to notify Buyer and Seller 'n writing of the exact date of Opening of Escrow. The escrow holder and Title Company will be Lawyers Title —Jay Eaton of Newport Beach, CA. 5. CAntimencies. Buyer's intention to close escrow will be subject to Buyer conducting and approving of Bayer's due diligence. Buyer will have 21 days from the Opening of Escrow ("Physical Inspection Contingency") to conduct physical inspections and review Seller documents pertaining to the physical structure. Boyer will have 30 days from the opening of Escrow ("Due Oiligence Period") to conduct a full review and evaluatio-r of the balance of this transaction, including but not limited to title, City of Newport Beach financing, environmental review, permits and apprgvgls, utilities, and seller provided documents. Seller will accommodate Buyer'5 reasonable requests and cooperation with Buyer's due diligence including allowing access to Buyer and Buyer's, 3' party representatives as reasonably necessary to complete the due diligence. Due Diligence Period will be automatically extended if the City of Newport Beach RFP funding commitment has not been received up to a maximum of 30 additional days. 6. Tale lnsurartm. Seller will provide an ALTA Owner's Policy of Title insurance (`?isle Policy") in the amount of the purchase price. The title insurance policy will be subject only to those matters of title approved by Buyer at Buyer's reasonable discretion. 7. Cj.��; Escrow shall close on or before the date that is 30 days from the approval of the Daae Dillgence Period ("Gose of Escrow"). Closing shall be contingent upon, Buyer's approval of Due Mligence Period. including the City of Newport Beach RFP funding commitment. Buyer may extend the Close of Escrow by 30 days by reltrasing any remaining earnest rroney deposit to Seller. a. Cosi—mg Costs. Credits and Proratiort5, Seiler will flay the cost of the Title Policy. Seller will pay the cost of documentary transfer taxes and one-half of the escrow fees. All other costs will be allocated between Buyer and Seller in accordance with customary practice of the County in which the Property is Iccated. Real property taxes and any other matters to be prorated will be prorated as of the Close of Escrow. 9. Right of Enmrr., [wring escrow, Buyer and Buyer's 3'' party consultants will have the right to enter the Property for reason of inspections pertaining to Buyer's due diligence. Buyer must give Seller reasonable nctice of entry not less than 24 hours ip. Broker's ComissiM. Seller will pay brpkerage commission pursuant to an outside agreement With broker representing Seller. Buyer is represented by Berkadia. 11.. N mine. Buyer shall have the right to assign the Purchase and Sale Agreement ("PSA") to a limited partnership where Buyer will be a General Partner. 3416 Via a7parto, Ste 30L Newport Beach, CA 92663 T: 949.467,1344 FX: 866.337,3243 www.eommuinitydeWartners.com 66 67 25-294 C [Zt llil\iT5' f}}1'11.(,1i'.�I ED P T i'aEt'li! cti 12. Pre araticn atPuLchWUreerneHt Within seven lousiness (7) days of the signing of this letter by 5aller and the receipt thereof by Buyer, Buyer and Seller will execute a mutually acceptable PSA that shall serve as lawfully binding escrow instructions to escrow holder, 13. Exclusive Right to Negotiate. In consideration of the effort and expense to be expended by the Buyer from the point at which the parties execute this "Letter of Intent", Seller agrees NOT to consider or soiiclt offers to purchase the Property from any other source during the time that the parties are negotiating in good faith the PSA. if aur .proposal is acceptable, please execute the enclosed copy of this letter in the space provided and return to us on or before 500 p m, on June 2SO, 2015• Sincerely, Erie Paine CEO PROVED AND ACCEPTED BY SELLER THIS 64-1- DAY OF -J-01J2015 )i 6V ( Seller); i Nam 3416 Via Oporto, Ste 341, Newport [Teach, CA 92663 T. 949A67.1344 FX,. 866.337.3243 www.eommunitydevpartners.carn G. COMMUNITY OUTREACH Provide o pion for conducting community outreach to the neighbors of the proposed project and community groups. The outreach pion should describe how the proposer intends to build support for the project and address community concerns. The outreach pion should also discuss any anticipated community concerns and how they will be handled. Community Development Partners (CDP) understands the importance of strong communication with the residents of West Newport on the 6001 Newport Shores affordable housing project. This project is unique to the City of Newport Beach and CDP is excited to share with the residents, business and stakeholders the many reasons why this project will support a goal and need in the City with a reputable and responsible project. CDP retained Hart Community Initiatives to manage the community relations effort, message development and grassroots coalition organization for the Newport Shores project. The principal for the company, Michelle Hart, is a Newport Shores local having grown-up in the Shores and returning to live there in her adult years. She has a deep commitment and intensity to preserving the unique elements of what binds the Newport Shores community and to see the evolution of a strong family environment continue to prosper for the community. To date one-on-one meetings, phone calls and emails with residents, HOA board members and the local business within the Newport Shores community have occurred, headed by Michelle Hart. During the time period of September to November the following communication took place: Conversations including follow-up phone and email communication with various members of the board of directors of the homeowners association which lead to a member of the board discussing the project under board comments at the September and November HOA meetings. Additionally conversations with individual Shores residents and spoke to the chairman of the Newport Beach Chamber of Commerce a Newport Shores resident. Door to door outreach to the 9 current residents (2 apartments are vacant) at the property with a letter being supplied on the project. There were three residents that followed-up with phone calls on the timeline and qualification requirements on the project which were responded too. Conversations with David Dukes who recently purchased Cappy's. Provided him renderings of the future project. David agreed to allow community coffee and early evening community meetings to occur at Cappy's so Newport Shores residents not familiar with the 6001 property could see it directly. The first community meeting occurred November 12th at 730am. • Responded to a resident via phone calls and emails who had contacted the City of Newport Beach directly. As the project progresses and certain milestones are met, additional outreach to the Newport Shores community will occur. Such outreach efforts may include, but not be limited to, the following: A series of community meetings to be held in November for Newport Shores, West Newport and Newport Crest communities to further introduce the details of the project to the residents, including having the residents meet with CDP to ask questions. Key goals of these meetings will include: - Inform residents on the process, timing and milestones for the project. - Highlight the need for affordable housing and housing for Veterans. - Highlight the property improvements to which will improve the aesthetic of the building and enhance the community as a whole. 68 69 25-296 - Highlight coordination and support of the VA, the list of services to be offered by VA and Mercy House. - Provide images of post -rehab building and examples of previous CDP projects completed. Additional outreach to the businesses directly adjacent to the property will include setting up meetings with the John Wayne Foundation, Eat Chow, The Frog House, Cappy's Cafe, The Army Surplus Store and the Best Western. • Project updates will be communicated with the Newport Shores HOA to post on the HOA website as well as to establish additional resident meetings as needed. Posting on the Next Door website, on online community social media site which includes 344 of the 440 residents in Newport Shores. This serves as a vehicle for neighbors to communicate with neighbors on a variety of issues including events, police activity, items for sale and services. Community Development Partners along with Mercy House and Hart Community Initiatives is committed to communicating and involving the residents of Newport Shores and West Newport on the proposed project. The project team welcomes all questions and urges residents and businesses to attend community meetings or reach out to us with questions, comments or concerns. 25-297 25-298 S. DEVELOPMENT PRO FORMA 00 Is j / Ij 0// IIS , so: � ■ III ■ ■ ■ 111 25-299 PROJECT FINANCING SUMMARY City Council Project Selection Nov -15 Property Acquisition / Bridge Loan Closing Dec -15 VHHP Application Dec -15 VHHP Award Feb -16 LIHTC 9% Application Mar -16 LIHTC 9% Award Jun -16 Construction Commence/LP Closing Sep -16 Anticipated Construction Completion Jan -17 Stabilization (Lease -up Complete) Mar -17 Perm Loan Closing (Conversion) Jul -17 8609s Aug -17 Acquisition 3,538,320 Direct Construction Costs 1,109,760 Construction Contingency 110,976 Indirect and Soft Costs 259,211 Developer Fee 386,483 Financing Costs 277,012 Project Reserves 265,607 TOTAL 5,947,369 Tax Credit Equity 2,156,244 1st Mortgage Permanent Debt 1,160,000 City of NB Note 1,975,000 VHHP 600,000 Deferred Developer Fee 56,125 TOTAL 5,947,369 LIHTC Equity Pricing 1.05 LIHTC Credits to Investor 2,053,566 Construction/Bridge Loan 2,838,658 LIHTC App Tie -Breaker 76.46% TOTAL Units 12 72 73 25-300 PROJECT DEVELOPMENT COSTS ACQUISITION Land Costs $ 2,796,000 $ 699,000 $ 3,495,000 $ 291,250 Acquisition Loan Interest - 43,320 43,320 3,610 Total 2,796,000 742,320 3,538,320 294,860 DIRECT CONSTRUCTION 20,000 20,000 40,000 3,333 Direct construction/Hard Costs 960,000 - 960,000 80,000 Contractor Overhead 19,200 - 19,200 1,600 General Conditions 57,600 - 57,600 4,800 Contractor Profit/Fee 57,600 - 57,600 4,800 P&P Bond 8,160 - 8,160 680 Insurance 7,200 - 7,200 600 Total Construction Contract 1,109,760 - 1,109,760 92,480 Construction Contingency 110,976 - 110,976 9,248 Total Direct Construction 1,220,736 - 1,220,736 101,728 INDIRECT CONSTRUCTION 5,500 - 5,500 458 Engineering 5,000 - 5,000 417 Architectural Design 50,000 - 50,000 4,167 Permits 10,000 - 10,000 833 FF& E (Furniture) 6,000 - 6,000 500 Environmental Remediation 30,000 - 30,000 2,500 Total 101,000 - 101,000 8,417 SOFT COSTS 4,510 4,510 376 Developer's Fee Acquisition 139,800 - 139,800 11,650 Developer's Fee Construction 246,683 - 246,683 20,557 Property Liability Insurance 4,199 1,400 5,599 467 Real Estate Taxes/Assessments 1,983 5,000 6,983 582 Audit/Accounting 25,000 7,500 32,500 2,708 Misc. Soft Costs 10,000 5,729 15,729 1,311 Marketing - 2,400 2,400 200 Relocation 95,000 - 95,000 7,917 Total 522,665 22,029 544,694 45,391 RESERVES/RENT-UP COSTS Operating Reserve Requirements Capitalized Services Reserve - - 48,000 217,607 48,000 217,607 4,000 18,134 Total - 265,607 265,607 22,134 FINANCING COSTS Construction Loan Interest Reserve 20,000 20,000 40,000 3,333 Construction Loan Origination Fees 20,000 - 20,000 1,667 Construction Lender UW Costs 6,637 - 6,637 553 Const Lender Monthly Inspct 2,000 - 2,000 167 Perm Loan Origination Fee - 10,150 10,150 846 Lender Attorney Const/Perm 30,000 10,000 40,000 3,333 Title/Escrow/Closing (Constr/Perm) 10,000 5,000 15,000 1,250 Syndication Fee - 10,000 10,000 833 Legal Counsel Fees (Borrower&MGP) 65,000 15,000 80,000 6,667 Land Survey 4,500 1,500 6,000 500 Market Study 5,500 - 5,500 458 Appraisal (App and Lender) 10,000 - 10,000 833.33 Environmental Reports (Phl, Phll/LBP/ACM) 4,000 - 4,000 333 Cap Needs Assmnt (CDP&Lender)/Energy Audit 6,500 - 6,500 542 Relocation Study 2,500 - 2,500 208 TC / VHH P Application Fee - 6,000 6,000 500 TCAC Allocation/ Reservation Fee 8,215 8,215 685 Compliance Monitoring Fee 4,510 4,510 376 ITOTAL USES $ 4,827,038 $ 1,120,331 $ 5,947,369 $ 495.614 1 25-301 FINANCING SOURCES & USES Uses Sources Property Acquisition $3,495,000 Century Acquisition Loan $1,520,000 City of Newport Beach Funds $1,975,000 Total Uses $3,495,000 Total Sources $3,495,000 Construction Phase Uses Acquisition Costs $3,538,320 Direct Construction Costs $1,109,760 Construction Contingency $110,976 Indirect and Soft Costs $259,211 Developer Fee $386,483 Financing Costs $277,012 Project Reserves $265,607 Total Uses $5,947,369 Uses Acquisition Costs $3,538,320 Direct Construction Costs $1,109,760 Construction Contingency $110,976 Indirect and Soft Costs $259,211 Developer Fee $386,483 Financing Costs $277,012 Project Reserves $265,607 Total Uses $5,947,369 Sources Tax Credit Equity $539,061 Construction Loan $2,838,658 City of N B Note $1,975,000 Deferred Costs $594,651 Total Sources $5,947,369 Sources Tax Credit Equity $2,156,244 1st Mortgage Permanent Debt $1,160,000 City of N B Note $1,975,000 V H H P $600,000 Deferred Developer Fee $56,125 Total Sources $5,947,369 74 75 25-302 *NOTE: OCHA Staff confirmed Newport Beach is considered a 'high rent area' and therefore rents are above the Published Orange County FMRs of $1,283. 25-303 Monthly Annual Per Unit RENTAL INCOME 13,440 161,280 13,440 Total Other Income 1,440 120 Z 162,720 13,560 Vacancies 5.00% (8,136) (678) TOTAL INCOME 154,584 12,882 EXPENSES M UNIT MIX AND INCOME ANALYSIS Operating Expenses 7,729 644 Administrative 7,076 590 v 9,564 797 Maintenance 11,015 918 Utilities 8,604 717 Insurance (& taxes if any) N 2 O Rental Income 11,700 975 Replacement Reserves 3,600 300 Service Amenities Reserve (11,700) X M Unit 56,400 Unit Unit AMI *Gross Utility Net Monthly Annual y Type 210 Sqft Count Level Rent Allowance Rent Rent 0 Rent < 1 Bed - 1 Bath - VASH 400 6 30% 1475 42 1433 8,598 M 103,176 0 1 Bed - 1 Bath 400 2 40% 703 42 661 1,322 „ 15,864 3 1 Bed -1 Bath 400 3 50% 878 42 836 2,508 M 30,096 z 1 Bed - 1 Bath - Non-VASH 400 1 60% 1,054 42 1,012 1,012 „ 12,144 X O Totals 12 13,440 161,280 p 3 n *NOTE: OCHA Staff confirmed Newport Beach is considered a 'high rent area' and therefore rents are above the Published Orange County FMRs of $1,283. 25-303 Monthly Annual Per Unit RENTAL INCOME 13,440 161,280 13,440 Total Other Income 1,440 120 Total Rental & Other Income 162,720 13,560 Vacancies 5.00% (8,136) (678) TOTAL INCOME 154,584 12,882 EXPENSES Operating Expenses 7,729 644 Administrative 7,076 590 Payroll 9,564 797 Maintenance 11,015 918 Utilities 8,604 717 Insurance (& taxes if any) 8,811 734 Service Amenities 11,700 975 Replacement Reserves 3,600 300 Service Amenities Reserve (11,700) (975) TOTAL EXPENSES 56,400 4,700 CASH FOR DEBT SERVICE 98,184 8,182 PERM LOAN DEBT 84,105 7,009 VHHP MIN PAYMENT 2,520 210 NET CASH FLOW 11,559 1,083 PERMANENT LOAN SIZING AmortizationYears 30 DCR 1.17 Interest Rate 5.70% Total Financing $1,160,000 *NOTE: OCHA Staff confirmed Newport Beach is considered a 'high rent area' and therefore rents are above the Published Orange County FMRs of $1,283. 25-303 30 -YEAR CASH FLOW 1 Bed -1 Bath - VASH 1 Bed -1 Bath 1 Bed -1 Bath 1 Bed - 1 Bath - Non-VASH Vet 6 2 3 1 1,433 661 836 1,012 2.00% 2.00% 2.00% 2.00% 103,176 15,864 30,096 12,144 105,240 16,181 30,698 12,387 107,344 16,505 31,312 12,635 109,491 16,835 31,938 12,887 111,681 17,172 32,577 13,145 113,915 17,515 33,228 13,408 TOTAL RENTAL INCOME 12 4.58% 3.00% 161,280 164,506 167,796 171,152 174,575 178,066 Other Income $ 10.00 6.19% 2.00% 1,440 1,469 1,498 1,528 1,559 1,590 TOTAL POTENTIAL INCOME $ 917.94 7.13% 3.00% 162,720 165,974 169,294 172,680 176,133 179,656 Less Vacancy Allowance $ 717.00 5.57% 5.00% (8,136) (8,299) (8,465) (8,634) (8,807) (8,983) GROSS INCOME $ 734.28 5.70% 3.00% 154,584 157,676 160,829 164,046 167,327 170,673 Management Fees (Per Mo) $ 644.10 5.00% 2.00% 7,729 7,884 8,041 8,202 8,366 8,534 Administration $ 589.68 4.58% 3.00% 7,076 7,288 7,507 7,732 7,964 8,203 Payroll $ 797.00 6.19% 3.00% 9,564 9,851 10,146 10,451 10,764 11,087 Maintenance $ 917.94 7.13% 3.00% 11,015 11,346 11,686 12,037 12,398 12,770 Utilities $ 717.00 5.57% 3.00% 8,604 8,862 9,128 9,402 9,684 9,974 Insurance/Taxes $ 734.28 5.70% 3.00% 8,811 9,076 9,348 9,628 9,917 10,215 Service Amenities $ 975.00 7.57% 3.00% 11,700 12,051 12,413 12,785 13,168 13,564 Services Reserve / CF Reserve $ (975.00) -7.57% 3.00% (11,700) (12,051) (12,413) (12,785) (13,168) (13,564) TOTAL OPER. EXPENSES $4,400 52,800 54,307 55,857 57,452 59,094 60,783 NET OPERATING INCOME 101,784 103,369 104,972 106,593 108,233 109,890 REPLACEMENT RESERVES $300 3.00% 3,600 3,708 3,819 3,934 4,052 4,173 CASH FLOW FOR DSC 98,184 99,661 101,153 102,660 104,181 105,717 DEBT SERVICE Amount Rate DCR Permanent Loan Hard Debt $1,160,000 5.70% 1.17 84,105 84,105 84,105 84,105 84,105 84,105 VHHP Min Payment $600,000 0.42% N/A 2,520 2,520 2,520 2,520 2,520 2,520 NET CASH FLOW 11,559 13,035 14,527 16,034 17,555 19,091 MANAGEMENT FEES Amount Incr/yr LP Asst Mgmt Fee $3,000 3.00% 3,000 3,090 3,183 3,278 3,377 3,478 MGP MgmtFee $3,000 3.00% 3,000 3,090 3,183 3,278 3,377 3,478 CASH FLOW AFTER FEES 5,559 6,855 8,162 9,478 10,802 12,136 DEFERRED FEE &AGP FEE Amount Incr/yr Deferred Fee Payment $56,125 5,559 6,855 8,162 9,478 10,802 12,136 AGP (Dev) Incentive Fee $3,000 3.00% - - - - - 3,478 CASH FLOW AFTER DDF - - - - (3,478) CITY OF NB NOTE Amount Rate Year -1 Year -2 Year -3 Year -4 Year -5 Year -6 Surplus Cash Flow Payments $1,975,000 0.0% NET CASH FLOW (3,478) 76 77 25-304 30 -YEAR CASH FLOW 1 Bed -1 Bath - VASH 1 Bed -1 Bath 1 Bed -1 Bath 1 Bed -1 Bath - Non-VASH Vet 116,193 17,865 33,893 13,676 118,517 18,223 34,571 13,950 120,887 18,587 35,262 14,229 123,305 18,959 35,968 14,513 125,771 19,338 36,687 14,803 128,286 19,725 37,421 15,100 130,852 20,119 38,169 15,402 133,469 20,522 38,932 15,710 136,139 20,932 39,711 16,024 TOTAL RENTAL INCOME 181,627 185,260 188,965 192,745 196,599 200,531 204,542 208,633 212,806 Other Income 1,622 1,654 1,687 1,721 1,755 1,790 1,826 1,863 1,900 TOTAL POTENTIAL INCOME 183,249 186,914 190,652 194,465 198,355 202,322 206,368 210,496 214,706 Less Vacancy Allowance (9,162) (9,346) (9,533) (9,723) (9,918) (10,116) (10,318) (10,525) (10,735) GROSS INCOME 174,087 177,568 181,120 184,742 188,437 192,206 196,050 199,971 203,970 Management Fees (Per Mo) 8,704 8,878 9,056 9,237 9,422 9,610 9,802 9,999 10,199 Administration 8,449 8,703 8,964 9,233 9,510 9,795 10,089 10,392 10,703 Payroll 11,420 11,763 12,115 12,479 12,853 13,239 13,636 14,045 14,466 Maintenance 13,153 13,547 13,954 14,372 14,804 15,248 15,705 16,176 16,662 Utilities 10,274 10,582 10,899 11,226 11,563 11,910 12,267 12,635 13,014 Insurance / Taxes 10,521 10,837 11,162 11,497 11,842 12,197 12,563 12,940 13,328 Service Amenities 13,970 14,390 14,821 15,266 15,724 16,196 16,681 17,182 17,697 Services Reserve / CF Reserve (13,970) (14,390) (14,821) (15,266) (15,724) (16,196) (16,681) (17,182) (17,697) TOTAL OPER. EXPENSES 62,521 64,310 66,150 68,044 69,993 71,999 74,063 76,187 78,372 NET OPERATING INCOME 111,565 113,259 114,969 116,698 118,444 120,207 121,987 123,784 125,598 REPLACEMENT RESERVES 4,299 4,428 4,560 4,697 4,838 4,983 5,133 5,287 5,445 CASH FLOW FOR DSC 107,267 108,831 110,409 112,001 113,606 115,224 116,854 118,498 120,153 DEBT SERVICE Permanent Loan Hard Debt 84,105 84,105 84,105 84,105 84,105 84,105 84,105 84,105 84,105 VHH P Min Payment 2,520 2,520 2,520 2,520 2,520 2,520 2,520 2,520 2,520 NET CASH FLOW 20,641 22,206 23,784 25,375 26,980 28,598 30,229 31,872 33,527 MANAGEMENT FEES LP Asst Mgmt Fee 3,582 3,690 3,800 3,914 4,032 4,153 4,277 4,406 4,538 MGP Mgmt Fee 3,582 3,690 3,800 3,914 4,032 4,153 4,277 4,406 4,538 CASH FLOW AFTER FEES 13,477 14,826 16,183 17,547 18,917 20,293 21,674 23,061 24,452 DEFERRED FEE & AGP FEE Deferred Fee Payment 3,133 - - - - - - - - AGP (Dev) Incentive Fee 3,582 3,690 3,800 3,914 4,032 4,153 4,277 4,406 4,538 CASH FLOW AFTER DDF 6,761 11,137 12,383 13,632 14,885 16,140 17,397 18,655 19,914 CITY OF NB NOTE Year -7 Year -8 Year -9 Year -10 Year -11 Year -12 Year -13 Year -14 Year -15 Surplus Cash Flow Payments - - - - - - - - - NET CASH FLOW 6,761 11,137 12,383 13,632 14,885 16,140 17,397 18,655 19,914 25-305 30 -YEAR CASH FLOW 1 Bed - 1 Bath - VASH 1 Bed -1 Bath 1 Bed -1 Bath 1 Bed -1 Bath - Non-VASH Vet 6 2 3 1 1,433 661 836 1,012 2.00% 2.00% 2.00% 2.00% 138,861 21,351 40,505 16,344 141,639 21,778 41,315 16,671 144,471 22,213 42,142 17,005 147,361 22,658 42,984 17,345 150,308 23,111 43,844 17,692 153,314 23,573 44,721 18,045 TOTAL RENTAL INCOME 12 Maintenance $ 917.94 217,062 221,403 225,831 230,348 234,955 239,654 Other Income $ 10.00 5.70% 2.00% 1,938 1,977 2,016 2,057 2,098 2,140 TOTAL POTENTIAL INCOME 3.00 TOTAL OPER. EXPENSES $4,400 219,000 223,380 227,847 232,404 237,052 241,793 Less Vacancy Allowance 21,132 5.00% (10,950) (11,169) (11,392) (11,620) (11,853) (12,090) GROSS INCOME 107,688 110,808 114,020 208,050 212,211 216,455 220,784 225,200 229,704 Management Fees (Per Mo) $ 644.10 5.00% 2.00% Administration $ 589.68 4.58% 3.00% Payroll $ 797.00 6.19% 3.00% Maintenance $ 917.94 7.13% 3.00% Utilities $ 717.00 5.57% 3.00% Insurance/Taxes $ 734.28 5.70% 3.00% Service Amenities $ 975.00 7.57% 3.00% Services Reserve / CF Reserve $ (975.00) -7.57% 3.00 TOTAL OPER. EXPENSES $4,400 15,451 15,914 10,402 10,611 10,823 11,039 11,260 11,485 11,024 11,355 11,696 12,047 12,408 12,780 14,900 15,347 15,808 16,282 16,771 17,274 17,161 17,676 18,207 18,753 19,315 19,895 13,405 13,807 14,221 14,648 15,087 15,540 13,728 14,140 14,564 15,001 15,451 15,914 18,228 18,775 19,338 19,918 20,516 21,132 98,850 101,711 104,656 107,688 110,808 114,020 78 79 25-306 NET OPERATING INCOME 109,200 110,500 111,799 113,096 114,392 115,684 REPLACEMENT RESERVES $300 3.00% 5,609 5,777 5,950 6,129 6,313 6,502 CASH FLOW FOR DSC 103,591 104,723 105,848 106,968 108,079 109,182 DEBT SERVICE Permanent Loan Hard Debt VHHP Min Payment Amount $1,160,000 $600,000 Rate 5.70% 0.42% DCR 1.17 N/A 84,105 2,520 84,105 2,520 84,105 2,520 84,105 2,520 84,105 2,520 84,105 2,520 NET CASH FLOW 19,486 20,617 21,743 22,862 23,974 25,077 MANAGEMENT FEES LP Asst Mgmt Fee MGP Mgmt Fee Amount $3,000 $3,000 Incr/yr 3.00% 3.00% 4,674 4,674 4,814 4,814 4,959 4,959 5,107 5,107 5,261 5,261 5,418 5,418 CASH FLOW AFTER FEES 10,138 10,989 11,826 12,647 13,453 14,240 DEFERRED FEE &AGP FEE Deferred Fee Payment AGP (Dev) Incentive Fee Amount $56,125 $3,000 Incr/yr 3.00% - 4,674 - 4,814 - 4,959 - 5,107 - 5,261 - 5,418 CASH FLOW AFTER DDF 5,464 6,175 6,867 7,540 8,192 8,822 CITY OF NB NOTE Surplus Cash Flow Payments Amount $1,975,000 Rate 0.0% Year -16 1,366 Year -17 1,544 Year -18 1,717 Year -19 1,885 Year -20 2,048 Year -21 2,205 NET CASH FLOW 4,098 4,631 5,151 5,655 6,144 6,616 78 79 25-306 Management Fees (Per Mo) 11,715 11,949 12,188 12,432 12,681 12,934 13,193 13,457 Z Administration 13,164 13,559 13,965 14,384 14,816 15,260 15,718 16,190 M 30 -YEAR CASH FLOW 17,792 18,326 18,875 19,442 20,025 20,626 21,244 21,882 v Maintenance 20,492 21,106 21,740 22,392 23,064 23,756 24,468 25,202 N 2 0 Utilities 16,006 16,486 16,981 17,490 18,015 18,555 19,112 19,685 X M INCOMERENTAL 16,392 16,883 17,390 17,912 18,449 19,002 19,573 20,160 N Service Amenities 21,765 22,418 23,091 23,784 24,497 25,232 25,989 26,769 0 1 Bed -1 Bath - VASH 156,380 159,508 162,698 165,952 169,271 172,657 176,110 179,632 183,225 < M 1 Bed -1 Bath 24,045 24,525 25,016 25,516 26,027 26,547 27,078 27,620 28,172 0 1 Bed -1 Bath 45,615 46,528 47,458 48,408 49,376 50,363 51,370 52,398 0 53,446 3 M 1 Bed -1 Bath - Non-VASH Vet 18,406 18,774 19,150 19,533 19,924 20,322 20,728 21,143 Z 21,566 1 TOTAL RENTAL INCOME 244,447 249,336 254,322 259,409 264,597 269,889 275,287 280,792 286,408 0 Other Income 2,183 2,226 2,271 2,316 2,362 2,410 2,458 2,507 n 2,557 0 TOTAL POTENTIAL INCOME 246,629 251,562 256,593 261,725 266,959 272,299 277,745 283,299 288,965 y Less Vacancy Allowance (12,331) (12,578) (12,830) (13,086) (13,348) (13,615) (13,887) (14,165) (14,448) GROSS INCOME 234,298 238,984 243,763 248,639 253,611 258,684 263,857 269,134 274,517 Management Fees (Per Mo) 11,715 11,949 12,188 12,432 12,681 12,934 13,193 13,457 13,726 Administration 13,164 13,559 13,965 14,384 14,816 15,260 15,718 16,190 16,675 Payroll 17,792 18,326 18,875 19,442 20,025 20,626 21,244 21,882 22,538 Maintenance 20,492 21,106 21,740 22,392 23,064 23,756 24,468 25,202 25,958 Utilities 16,006 16,486 16,981 17,490 18,015 18,555 19,112 19,685 20,276 Insurance/Taxes 16,392 16,883 17,390 17,912 18,449 19,002 19,573 20,160 20,765 Service Amenities 21,765 22,418 23,091 23,784 24,497 25,232 25,989 26,769 27,572 Services Reserve / CF Reserve - - - - - - - - - TOTAL OPER. EXPENSES 117,325 120,728 124,230 127,835 131,546 135,366 139,297 143,344 147,510 NET OPERATING INCOME 116,972 118,256 119,533 120,803 122,065 123,318 124,560 125,790 127,007 REPLACEMENT RESERVES 6,697 6,898 7,105 7,318 7,538 7,764 7,997 8,237 8,484 CASH FLOW FOR DSC 110,275 111,358 112,428 113,485 114,528 115,554 116,563 117,554 118,524 DEBT SERVICE Permanent Loan Hard Debt 84,105 84,105 84,105 84,105 84,105 84,105 84,105 84,105 84,105 VHH P Min Payment 2,520 2,520 2,520 2,520 2,520 2,520 2,520 2,520 2,520 NET CASH FLOW 26,170 27,252 28,323 29,380 30,422 31,449 32,458 33,448 34,418 MANAGEMENT FEES LP Asst Mgmt Fee 5,581 5,748 5,921 6,098 6,281 6,470 6,664 6,864 7,070 MGP Mgmt Fee 5,581 5,748 5,921 6,098 6,281 6,470 6,664 6,864 7,070 CASH FLOW AFTER FEES 15,008 15,756 16,481 17,183 17,860 18,509 19,130 19,721 20,279 DEFERRED FEE & AGP FEE Deferred Fee Payment - - - - - - - - - AGP (Dev) Incentive Fee 5,581 5,748 5,921 6,098 6,281 6,470 6,664 6,864 7,070 CASH FLOW AFTER DDF 9,427 10,007 10,560 11,085 11,578 12,040 12,466 12,857 13,209 CITY OF NB NOTE Year -22 Year -23 Year -24 Year -25 Year -26 Year -27 Year -28 Year -29 Year -30 Surplus Cash Flow Payments 2,357 2,502 2,640 2,771 2,895 3,010 3,117 3,214 3,302 NET CASH FLOW 7,070 7,506 7,920 8,314 8,684 9,030 9,350 9,643 9,907 25-307 25-308 6. PROPOSED MPLEMENTATION PLAN 0 0 Ij 00 Is o IIS , � ■ ■ III ■ ■ ■ 111 25-309 82 83 25-310 PROPOSED IMPLEMENTATION PLAN Taking os o starting point City Council approval of use of the funds, provide o proposed development schedule or implementation pion. For development projects, include the following milestones: site acquisition, additional funding from oil other funding sources, zoning change approvals if necessary, preparation and approval of construction plans, start of construction, completion of construction, and leose-up. City Council Project Selection November 2015 Property Acquisition / Bridge Loan Closing December 2015 VHHP Application December 2015 VHHP Award February 2016 LI HTC 9% Application March 2016 LI HTC 9% Award June 2016 Construction Commence/LP Closing September 2016 Anticipated Construction Completion January 2017 Stabilization (Lease -up Complete) March 2017 Perm Loan Closing (Conversion) July 2017 8609s August 2017 Perm Loan Closing (Conversion) July 2017 8609s August 2017 25-311 84 85 25-312 7. APPLICANT NFORMATION FORM 00 Is 9moll 25-313 ATTACHMENT A: APPLICANT INFORMATION FORM Instructions: Complete the form below and remit as part of your Proposal as "Attachment A." APPLICANT INFORMATION APPLICANT/COMPANY NAME: Community Development Partners ADDRESS FOR NOTICES: 3416 Via Oporto Suite 301 Newport Beach, CA 92663 MAIN CONTACT (NAME AND TITLE): _Eric Paine, CEO CONTACTNUMBEIRS: TELEPHONE: 949-554-3713 FAX: E-MAIL ADDRESS: epaii2e@communitvdevpartners.com APPLICANT SIGNATURE AUTHORIZATION AND CERTIFICATION Per the California Corporate Code, Business and Professions Code, the Applicant's Bylaws/Operating Agreement and/or the attached Board Resolution (if applicable), I/we hereby verify that I/we am/are (an) authorized signatory(ies) for the aforementioned Applicant and as such am/are authorized to sign and bind the Applicant in contract with the City of Newport Beach. 1. APPLICANT AUTHORIZED SIGNATORY(IES): Eric Paine CEO 6/30/15 SIGNATURE PRINT NAME TITLE DATE SIGNATURE PRINT NAME TITLE DATE 2. SIGNATURE AUTHORIZATION IS PROVIDED IN ACCORDANCE WITH: ❑ Applicant's Bylaws/ Operating Agreement Section ❑ Copy Attached R] Board Resolution X❑ Copy Attached ❑ Corporate or Business and Professions Code** **If Consultant is a corporation, two (2) authorized signatories will be required on all documents submitted, unless specified in the organization's Bylaws or corporate resolution. IMPORTANT NOTE: If the signature authorization status of any individual changes during the term of the contract, it is the responsibility of the Applicant to contact the RFP Administrator for the Applicant regarding the change and to complete and submit a new Signature Authorization Form. Incorrect information on file may delay the processing of any of the documents submitted. 86 87 25-314 CERTIFICATE OF CORPORATE RESOLUTION OF SPECIAL MEETING OF THE BOARD OF DIRECTORS OF COMMUNITY DEVELOPMENT PARTNERS The undersigned, being the Secretary of Community Development Partners, a California Corporation (herein the "Company"), does hereby certify: 1. That a meeting of the Board of Directors of the Company, duly called, convened and held on June 29, 2015 at which meeting a quorum was present and voted throughout, the following resolutions were duly adopted by the Board of Directors and such resolutions have not been amended, altered or repealed and remain in full force and effect on the date hereof: WHEREAS, the Company is wishing to authorize a signatory in conjunction with the submission of a response to the City of Newport Beach Request For Proposals 15-55; NOW THEREFORE, BE IT RESOLVED, that the Company authorizes the CEO in his sole and absolute discretion to sign any such documents as may be required to bind, authorize, or otherwise commit the Company to the Request For Proposals 15-55 response and application. 2. That he has executed this certificate as of the date stated herein. C&amunity Development Partners By: Kyle Paine Its: Secretary 25-315 Attachment F Habitat OC Senior Home Repair Program Score Sheet and Proposal 25-316 RFP NO. 15-55: AFFORDABLE HOUSING DEVELOPMENT PROPOSAL AND INTERVIEW EVALUATION SCORE VALUES: N/A - Section is Not Applicable 0 - Requirement NOT MET 1 - Requirement PARTIALLY MET 2 - Requirement MET 3 - Requirement EXCEEDED OASIS/HABITAT FOR HUMANITY RATER 1 RATER 2 RATER 3 RATER 4 Site Control N/A N/A N/A N/A 30 -Year Minimum Affordability N/A N/A N/A N/A Acquisition & Construction Costs N/A N/A N/A N/A Securing Funding Sources N/A N/A N/A N/A High Quality Design & Amenities N/A N/A N/A N/A "Green" Building Practices 3 2 3 3 Neighborhood Compatibility & Design 1 3 2 2 Incorporates Community Spaces, Amenities, Services N/A N/A N/A N/A Experience with Successful Housing Projects 3 3 3 3 Readiness to Proceed 2 3 3 3 Ability to Manage Affordable Housing Units N/A N/A N/A N/A Consistency with Housing Element 3 3 3 3 Targets Extremely Low/Very Low/Low-Income Households 3 3 3 2 Considers a Wide Range of Households (Special Needs) 1 2 2 1 Includes Supportive Services for Target Population 3 2 3 3 Value 3 3 3 3 Total: 22/27 24/28 25/27 23/27 Percentage of Total Points: 81.48% 85.71% 1 92.59% 85.19% OASIS/HABITAT FOR HUMANITY - AVERAGE SCORE: 86.24% 25-317 June 30, 2015 Anthony Nguyen, Purchasing Agent City of Newport Beach 100 Civic Center Drive Newport Beach, CA 92660 Mr. Nguyen: Habitat WNe for Humanity's of Orange County Attached, please find a proposal in response to RFP No. 15-55 Affordable Housing Developrnew. The proposal is submitted on behalf of Habitat for Humanity of Orange County as well as the OASIS Senior Center. The only parties interested in this proposal as principals are named within. This proposal is made without collusion with any other person, persons, company or parties submitting a proposal. It is, in all respects, fair and in good faith without collusion or fraud. The signers have full authority to bind the proposer. If you have any questions, or would like any additional information, please contact: Chris Baiocchi, CPRE Vice President, Fund Development Habitat for Humanity of Orange County 2200 Ritchey, Santa Ana, CA 92705 714-434-6200 x230 Yours, a "�k� 6� Chris Baiocchi, CFRE Vice President, Fund Development Habitat for Humanity of Orange County Celeste Jardine -Haug, MSG Senior Services Manager City of Newport Beach OASIS Senior Center, 801 Narcissus Ave, Corona del Mar, CA 92625 949-644-3244 &k41-1 Celeste Jardine -Haug, SG Senior Services Manager City of Newport Beach 25-318 Proposal from Habitat for Humanity of Orange County & OASIS Senior Center RFP No. 15-55 Affordable Housing Development Habitat for Humanity of Orange County (Habitat OC) will partner with the OASIS Senior Center (OASIS) to identify and qualify low-income senior homeowners in Newport Beach who are in need of critical home repairs. 2. Statement of Qualifications (SOQ) Developer /Service Provider Team — OASIS • City of Newport Beach OASIS Staff: responsible for client outreach, application intake, candidate interviews, communication with Habitat OC, making payments for services • Information Staff: responsible for fielding questions, scheduling interviews and visits • Friends of OASIS: responsible for initial home assessment, communication with program staff regarding candidate approvals 1 25-319 Proposal from Habitat for Humanity of Orange County & OASIS Senior Center RFP No. 15-55 Affordable Housing Development Developer /Service Provider Team — Habitat OC Ll • Lauri Reveles, Chief Operating Officer: manages the services related to the creation of scope of work, repairs, legal document preparation and homeowner coordination. • Leonel Talvera, Manager, Neighborhood Revitalization: supervises the repair program • Repair Program Supervisor: conducts site visits, prepares scope of work, coordinates volunteers (as needed), performs needed repairs • Victoria Piar, Manager, Family and Homebuyer Services: coordinates the application process with OASIS staff, manages any needed homeowner follow up, ensures that both Habitat OC and OASIS retain the necessary paperwork and information • Rita Ross, Manager, Legal Services: prepares liability forms and other documentation for homeowner signature • Nima Sheth, Staff Accountant: manages all processes related to billing, invoices and bugets Service Provider Experience — OASIS OASIS is owned and operated by the City of Newport Beach under the leadership of the Recreation and Senior Services Department. The mission of the center is to provide services and activities that promote the health and well-being of older adults. OASIS staff are dedicated to helping older adults live long, healthy and productive lives while being able to stay in their homes for as long as possible. OASIS provides recreational, educational and enrichment classes which enable people to keep physically and mentally fit. Additionally, the center provides an array of social services which assist the more frail older adults who are struggling with day to day living. 2 25-320 Proposal from Habitat for Humanity of Orange County & OASIS Senior Center RFP No. 15-55 Affordable Housing Development OASIS staff consists of professionals in the field of gerontology, recreation and health and wellness. They have a large presence in the Newport Beach community and are viewed as the best place for older adults and their families to get resources and information on aging issues. Through a monthly newsletter that reaches 6,000 households, and the Departments' quarterly publication that reaches all Newport Beach residents, OASIS is able to disseminate important information to the community about their services. Since 1977, OASIS has worked with thousands of Newport Beach seniors, providing an array of services. Through programs such as Meals on Wheels, transportation, enrichment classes, and health and wellness programs, OASIS communicates with more than 800 seniors on a daily basis. Service Provider Experience — Habitat OC Since 1988, Habitat OC has been building a world where everyone has a decent place to live. Habitat OC is the local affiliate of Habitat for Humanity International and has built 191 homes across Orange County. Habitat OC has moved more than 1,000 adults and children in low and moderate income families from substandard housing to a permanent, affordable home. Habitat OC is currently building homes in La Habra, Cypress and Santa Ana, with additional projects in Fullerton, Tustin and Placentia on the way and completed neighborhoods in 13 Orange County cities. During that time, Habitat staff and volunteers have also taken on critical home repair as a way to realize the organization's mission to serve families in need. Since 2012, Habitat OC has completed 44 home repair projects. Critical home repair projects focused on five major items: health/safety, energy efficiency, weatherization, code compliancy and accessibility. Financial Capacity — OASIS & Habitat OC This grant will provide the necessary funding to provide at least 30 seniors with home repairs (see budget in section 4). For new home construction, Habitat OC has established relationships with several lenders, including Sun West, First Republic, California Bank & Trust, Union Bank and CalHomes. However, additional financing will not be required for the Home Repair Program. 25-321 Proposal from Habitat for Humanity of Orange County & OASIS Senior Center RFP No. 15-55 Affordable Housing Development References — OASIS & Habitat OC 1. The Home Depot Foundation (Habitat OC) Sherry Caraway, Program Manager 714-940-3542 / sherry caraway@homedepot.com 2. Orange County United Way / Building United Program (Habitat OC) Brenyale Toomer-Byas, Senior Manager, Housing and Grants Administration 949-263-6115 / brenyalet@unitedwayoc.org 3. Friends of OASIS (OASIS) Kathy Stewart, President 949-718-1800 / kstewartfriendspres@yahoo.com 3. Amount of Funds Requested OASIS and Habitat OC are requesting $600,000 for the Home Repair Program 4. Project Description Project Need Newport Beach has long been a great place to retire. Many people bought beach houses beginning in the mid -20th century in hopes of moving to the relaxed beach atmosphere when they were done with their working lives. A nice house at that time could be bought for approximately $25,000. The average age for a "senior" was 69. As a result of this large influx of retired people, there have always been a large percentage of seniors in the community. Today, the population of people over 60 in Newport Beach is nearly 28 percent and the average age is closer to 80. Many of the seniors living in their own homes have lived in that same home for more than 50 years. Many OASIS clients are "house poor" which means they own the home, but live on their Social Security along with some investments and interest. After paying for daily living expenses, there is not much money left to spend for repairs on their home. These residents cannot qualify for a traditional home loan for repairs, as they are unable to pay the loan back. Occasionally, these seniors are cited by code enforcement, but are still unable to address the root cause of the problem. Currently, there are no city programs available to address this need — and the need is very real. 4 25-322 Proposal from Habitat for Humanity of Orange County & OASIS Senior Center RFP No. 15-55 Affordable Housing Development For example, a 90 -year-old female contacted OASIS in April 2014 after a pipe had burst in her home resulting in severe water damage throughout the two-story structure. A long-time resident of the Jasmine Park community in Newport Beach, she was also a widow living on a fixed income. After her husband's passing, it came to her attention their homeowner's insurance had lapsed leaving her with little resources to repair the heavy damage. In a separate case, a 65 -year-old female contacted OASIS in May 2014 inquiring about assistance for repairs needed for her mobile home. The long-time resident of Newport Beach was also a widow living on Social Security benefits and a small disability benefit, and a participant in both the Meals on Wheels and OASIS Transportation programs. Upon examination, her mobile home was found to be in dire need of repair. Several windows were broken, the floors cracked, and the toilet not in working order. Mold and wood rot were apparent throughout the home, and the stairs leading to her front door were not up to safety code. Being on a fixed income she was unable to pay for the much needed repairs. Project Overview To meet this need in the community, OASIS will partner with Habitat OC to identify these seniors and provide them with critical home repairs. The program will focus on Newport Beach homeowners, 60 years or older, who fall within the 50th percentile of the median income of Newport Beach. The program will provide assistance to residents whose homes are in need of repair in the following categories: • Accessibility • Safety concerns • Health and wellbeing (toilets, plumbing, roofing repair) • Cited by code enforcement (outside landscape, paint, etc.) Interested residents will apply for the program — using the application and qualification model developed by Habitat OC. OASIS staff will be responsible for the identification and qualification of applicants — Habitat OC will create the scope of work and perform the needed repair. Management /Responsibilities The home repair program is divided into two phases: Identification & Qualification and Scope & Repair. OASIS and Habitat OC will share responsibilities on these two phases as follows: Phase 1: Identification & Qualification (OASIS) • Marketing / outreach to Newport Beach seniors 5 25-323 Proposal from Habitat for Humanity of Orange County & OASIS Senior Center RFP No. 15-55 Affordable Housing Development • Resident intake: answering inquiries, providing applications and processing the documentation needed for income evaluation • 1St walkthrough: an initial look at the project, designed to evaluate the severity / need of the repair • Review & selection: OASIS staff will evaluate possible projects and forward their selections to Habitat OC Phase 2: Scope & Repair (Habitat OC) • 2nd walkthrough: designed to ascertain the details of the repair, this is a detailed walkthrough • Scope of work / budget creation: Habitat OC will create a detailed scope of work and project budget • Legal review / document preparation: the scope of work will be finalized, as well as any necessary liability documents • Homeowner & OASIS approval / buy -in of scope and budget: before the repair can begin, both OASIS and the homeowner must sign off and approve the scope of work and budget • Repair: Habitat OC will execute the necessary repairs. Depending on the type of repair, this might require additional volunteer assistance • Final walk through & project sign off: As a last step, the homeowner will go through a final walk through of the home and will confirm that the work has been completed • Accounting / invoice: Habitat OC will complete the invoices needed for the project, and will forward to OASIS Sample Project Budget Construction costs (includes supplies & contractor costs) $15,000 Staff costs for Identification & Qualification $800 Staff costs for Scope & Repair $1500 PR / Marketing $100 Insurance $200 $17,600.00 Community Outreach OASIS staff will reach out to Newport residents through a variety of methods, including: • Postings on OASIS website and newsletters 11 25-324 Proposal from Habitat for Humanity of Orange County & OASIS Senior Center RFP No. 15-55 Affordable Housing Development • Flyers / posters / presentations at OASIS events and activities • Outreach and social service programs offered at OASIS • Community meetings • Outreach via the Friends of OASIS volunteer group N/A 5. Development Pro Forma 6. Proposed Implementation Plan Following approval from the Newport Beach City Council, the Home Repair Program will be implemented over several steps: • Habitat OC staff will train OASIS staff on the home repair application, qualification and selection process • OASIS will create marketing and outreach materials • Habitat OC will hire a Repair Program Supervisor • OASIS will begin publicizing the repair program in the Newport Beach community • Habitat OC staff will work with OASIS on the first round of applications and qualifications • Qualified residents will be referred to Habitat OC by OASIS • Habitat OC will begin repair processes Habitat OC and OASIS staff will schedule regular check-in / update meetings to review the process and results as needed. Additionally, Habitat OC will publicize the results of the program via the Habitat OC website, newsletters and social media presence. 7 25-325 ATTACHMENT A: APPLICANT INFORMATION FORM Instructions: Complete the form below and remit as part of your Proposal as "Attachment A." APPLICANT INFORMATION APPLICANT/COMPANY NAME: IQ.�4c 1tUf?ian, }y d� Q�c_nie r��„z_/ ADDRESS FOR NOTICES: ZZUOZt���t �� 1 MAIN CONTACT (NAME AND TITLE): CONTACT NUMBERS: E-MAIL ADDRESS: TELEPHONE: -7)` -L43q, (02CD FAX: `]!q ct/ cJ 1z2L dlC - d 0.� 4Car J! APPLICANT SIGNATURE AUTHORIZATION AND CERTIFICATION Per the Californta Corporate Code, Business and Professions Code, the Applicant's Bylaws/Operating Agreement and/or the attached Board Resolution (if applicable), (/we hereby verify that I/we am/are (an) authorized signatory(ies) for the aforementioned Applicant and as such am/are authorized to sign and bind the Applicant in contract with the City of Newport Beach. 1. APPLICANT AUTHORIZED SIGNATORY(IES): C,NATURE PRINT NAME TITLE DAT SIGNATURE PRINT NAME TITLE DATE 2. SIGNATURE AUTHORIZATION IS PROVIDED IN ACCORDANCE WITH: ❑ Applicant's Bylaws/ Operating Agreement Section ❑ Copy Attached XBoard Resolution Copy Attached 0 Corporate or Business and Professions Code** **If Consultant Is a corporation, two (2) authorized signatories will be required on all documents submitted, unless specified in the organization's Bylaws or corporate resolution. IMPORTANT NOTE: If the signature authorization status of any individual changes during the term of the contract, it is the responsibility of the Applicant to contact the RFP Administrator for the Applicant regarding the change.and to complete and submit a new Signature Authorization Form. Incorrect information on file may delay the processing of any of the documents submitted. 121Page 25-326 JUNE 26, 2015 CERTIFICATE I, Robert Barker, Secretary, do hereby certify that I am the duly elected, qualified and acting Secretary of Habitat for Humanity of Orange County, a California Nonprofit Religious Corporation; that below is a true and correct excerpt of a resolution adopted by unanimous consent of the Directors of the Corporation in an action dated June 26, 2015, and that said resolution has not been modified, revoked or rescinded in any manner and is now in full force and effect. IN WITNESS WHEREOF, I have hereunto set my hand at Santa Ana, California, this 7-6, day of a`e1.A14'_ , 2015. Robert Barker, Secretary RESOLUTION TO AUTHORIZE SUBMITTAL OF AN APPLICATION BY HABITAT FOR HUMANITY OF ORANGE COUNTY, INC. (HABITAT OC) TO CITY OF NEWPORT BEACH FOR FUNDING UNDER THE AFFORDABLE HOUSING DEVELOPMENT (RFP No. 15- 55); THE EXECUTION OF A STANDARD AGREEMENT IF SELECTED FOR SUCH FUNDING AND ANY AMENDMENTS THERETO; AND ANY RELATED DOCUMENTS NECESSARY TO PARTICIPATE IN THE AFFORDABLE HOUSING DEVELOPMENT PROGRAM. WHEREAS: A. Habitat for Humanity of Orange County, a California Nonprofit Religious corporation, wishes to apply for and receive an allocation of funds through the Affordable Housing Development Program, in partnership with the Oasis Senior Center; and B. The City of Newport Beach has issued a Request for Proposals (No. 15- 55) for and Affordable Housing Development program; and C. Habitat for Humanity of Orange County wishes to submit an application to obtain from the City of Newport Beach an allocation of funds in the amount of $600,000. 25-327 IT IS NOW THEREFORE RESOLVED THAT: 1. Habitat for Humanity of Orange County shall submit to the City of Newport Beach an application to participate in the Affordable Housing Development program in response to the RFP issued in June 2015, which will request a funding allocation for the following activities: To partner with the Oasis Senior Center in Newport to identify and qualify low-income senior homeowners in Newport Beach who are in need of critical home repairs, and to perform said repairs 2. If the application for funding is approved, Habitat for Humanity of Orange County hereby agrees to use the City of Newport funds for eligible activities in the manner presented in the application as approved by the City and in accordance with program regulations cited above. It also may execute any and all other instruments necessary or required by the City for participation in the Affordable Housing Development Program. 3. Habitat for Humanity of Orange County authorizes Sharon B. Ellis, President and CEO, to execute in the name of Habitat for Humanity of Orange County the application and all other documents required by the City of Newport Beach for participation in the Affordable Housing Development Program, and any amendments thereto. 25-328 Attachment G Seaview Lutheran Plaza Project Score Sheet and Proposal 25-329 RFP N0. 15-55: AFFORDABLE HOUSING DEVELOPMENT PROPOSAL AND INTERVIEW EVALUATION SCORE VALUES: N/A - Section is Not Applicable 0 - Requirement NOT MET 1 - Requirement PARTIALLY MET 2 - Requirement MET 3 - Requirement EXCEEDED Seaview Lutheran Plaza RATER 1 RATER 2 RATER 3 RATER 4 Site Control 2 2 3 2 30 -Year Minimum Affordability 3 3 3 3 Acquisition & Construction Costs 1 1 1 2 Securing Funding Sources 1 1 1 1 High Quality Design & Amenities 3 3 3 3 "Green" Building Practices 2 2 2 2 Neighborhood Compatibility & Design 2 2 2 2 Incorporates Community Spaces, Amenities, Services 2 2 2 2 Experience with Successful Housing Projects 3 3 3 2 Readiness to Proceed 3 3 2 2 Ability to Manage Affordable Housing Units 3 3 2 3 Consistency with Housing Element 2 2 2 2 Targets Extremely Low/Very Low/Low-Income Households 3 3 2 3 Considers a Wide Range of Households (Special Needs) 3 2 2 2 Includes Supportive Services for Target Population 2 3 1 2 Value 1 1 1 2 Total: 36/48 36/48 32/48 35/48 Percentage of Total Points: 75.00% 1 75.00% 1 66.60% 72.90% SEAVIEW LUTHERAN PLAZA - AVERAGE SCORE: 72.38% 25-330 CARING housing ministries June 8, 2015 Anthony Nguyen Purchasing Agent City of Newport Beach 100 Civic Center Dr. Newport Beach, CA 92660 Re: RFP 15-55 Affordable Housing Development Dear Mr. Nguyen: Enclosed please find an application for funding on behalf of Seaview Lutheran Plaza, a 100 -unit senior affordable housing community managed by CARING Housing Ministries and owned by Seaview Lutheran Plaza Inc., a non-profit corporation. The undersigned hereby certifies that only person, persons, company, or parties interested in the proposal as principals are named herein; that the proposal is made without collusion with any other person, persons, company, or parties submitting a proposal; that it is in all respects fair and in good faith without collusion or fraud, and that the signer has full authority to bind the proposer. Please do not hesitate to contact us with any questions. Sincerely, Nancy L. Spring President CARING Housing Ministries N SPRI N G@frontporch. net 626-300-2441 0 1(' CARING pel:'ro?I In el ( 's a cuc c, 3204 Rosemead Boulevard I Suite 100 I El Monte, California 41731 1 ph 626.300.2440 1 fx 626.458.894! a front porch partner Seaview Lutheran Plaza Proposal to City of Newport Beach RFP No. 15-55 Affordable Housing Development June 2015 25-332 2. Statement of Qualifications a) Developer or Service Provider Team Role Name Duties Owner/Board of Directors Seaview Lutheran Plaza, Provide direction to Inc. members of development team on implementation of rehabilitation project, review and approve scope of work, review and approve project budget, and assure compliance with all project requirements. Property Management CARING Housing Ministries Assist owner to develop project budget, select materials, negotiate construction contract, and oversee completion of renovation work. General Contractor To be determined Solicit subcontractor bids, complete renovation work, and coordinate with property management. Financial Consultant Nancy Lewis Associates, Coordination with City and Inc. lenders on financing matters. See attached organization chart for lines of responsibility. b) Developer or Service Provider Experience Seaview Lutheran Plaza has been owned and operated by Seaview Lutheran Plaza, Inc., a 501(c) (3) corporation, for 33 years. The Board of Directors is composed of nine voting members. It is headed by Charles (Pete) Gross, retired City of Newport Beach Chief of Police, and includes members with significant expertise in landlord - tenant law and construction, as well as the former City Mayor. The board has completed several projects to modernize the property over the last five years, including a renovation of the common areas in 2014 and (with assistance from the City of Newport) repairs to the property's plumbing systems completed in 2009. Seaview Lutheran Plaza works though its property management company, CARING Housing Ministries, in implementing efforts to ensure that this affordable housing development is preserved. CARING Housing Ministries (CHM) is a not-for-profit, wholly-owned affiliate of Front Porch. It manages 25 affordable housing 25-333 communities serving approximately 3,500 individuals residing in about 2,100 affordable housing units. CARING has managed Seaview Lutheran Plaza since the project's inception. CARING Housing Ministries has a staff of 18 working in its home office in EI Monte, including the President. Corporate staffing includes personnel in the areas of accounting/finance, operations, training, administration, property supervision, program services, maintenance services and risk management. CARING Housing Ministries is a not-for-profit, wholly-owned affiliate of Front Porch. Bill Jennings, the President of the Front Porch development Company, is responsible for all real estate development activities for Front Porch, including active adult and continuing care retirement communities. His areas of focus include the leadership of the development company in concept development, master planning, entitlements, resident experience creation, sales and marketing. Prior to joining Front Porch, Mr. Jennings held positions in auditing with Ernst and Young, Deloitte and Touche, and ARCO. Martin Lakatos, Vice President of Front Porch Development Company, is responsible for implementation of real estate ventures, with specific focus on overall project delivery management and oversight, including overseeing all aspects of design and engineering for new facilities. He is a licensed architect. CARING's experience with major renovations of older HUD properties includes facilitating the restructuring and rehabilitation of Pilgrim Tower, a 111 unit senior affordable housing development located in the City of Los Angeles at 1207 S Vermont Ave, 90006. The unit mix is 36 studios and 75 one -bedroom units. The property is comprised of 97 units supported by Section 8 Project Based Vouchers and restricted to 30% and 50% AMI levels; tenants pay 30% of their income. Eleven units are restricted to 60% of AMI by the California Tax Credit Allocation Committee, and three units are used for staff offices and managers unit. As management agent, CARING facilitated the transfer and financing of the property, provided consulting services for design of the units, prepared operating budgets, and is coordinating with the general contractor on tenant relocation and construction scheduling. This $31.5 million project is scheduled to be completed in September 2016. In order to solicit input into the proposal for renovation of the property, a resident meeting was held on May 18, 2015, and was attended by about 40 residents. Residents provided input regarding preferences for flooring in the apartments, accessible showers, and laundry facilities. In addition, resident questions about how the need, if any, to move from their units during the work were answered. Since the proposed work is all internal to the existing building, input from the wider community was not solicited at this time. Additional meetings will be held to provide updates to residents about the renovation plans as the project progresses. 25-334 c) Financial Capacity Seaview Lutheran Plaza is operated under Section 202 of the National Housing Act and regulated by the U.S. Department of Housing and Urban Development. It receives payments under a twenty year Section 8 Housing Assistance Payments Contract from that agency. The project is audited on an annual basis and there are no audit findings for the project. Project accounts, including an operating account, replacement reserve account, and tenant security deposit account are maintained at Bank of America and Bank of America Merrill Lynch. The proposed renovation project is proposed to be funded through a grant from the City of Newport Beach. Without these funds, the project is unable to undertake the proposed work; as of December 31, 2014, the replacement reserve account balance was about $242,000, which is needed to cover repair items not included in this scope of work, provide a source of funds to address emergencies, as well as to meet HUD requirements that the account maintain a balance of at least $1,000 per unit. d) References The following entities maintain banking relationships with Seaview Plaza: BANK OF AMERICA: Phan Tran Assistant Vice President Sale Support Associate Business Banking Bank of America Merrill Lynch Bank of America N.A. MC: CA9-900-09-10 35 N. Lake Ave., 9th floor Pasadena, CA 91101 T (626) 304-8560 F (206) 585-8836 MERRILL LYNCH: Felicia Widjaya Registered RD Assistant Merrill Lynch, Pierce, Fenner & Smith 505 N. Brand Blvd, Ste 1400 Glendale, CA 91203 818.254.0438 (T) 818.381.4199 (F) 25-335 As described above, Seaview Plaza is regulated by the U.S. Department of Housing and Urban Development, which holds a mortgage for the property and also provides a Section 8 contract. Please contact: Frank Castro Supervisorial Project Manager U.S. Department of Housing and Urban Development 611 West Sixth Street, Suite 800 Los Angeles, CA 90013 (702) 366-2120 Frank.j.castro@hud.gov Additionally, CARING has worked closely with Hunt Capital Partners, LLC, on the acquisition and renovation of Pilgrim Tower, an existing HUD Section 202 project in Los Angeles, California. Hunt Capital Partners, LLC provided tax credit equity and financing through a HUD 221(d)(4) loan. Please contact: Richard S. Coomber Vice President Affordable Housing Acquisitions Hunt Capital Partners, LLC 265 Franklin Street, Suite 1001 Boston, MA 02110 857-305-4100 office main 857-305-4108 office direct 617-335-2905 cell Richard.coomber@huntcompanies.com 25-336 3. Amount of Funds Requested Seaview Lutheran Plaza requests a grant in the amount of $2,860,000.00. Please see attached Development Proforma for the project budget. 25-337 4. Project Description a) The development concept for the site or a description (with photographs) of the site, building, proposed building square footage, number and size of units/bedrooms, total parking spaces, proposed ingress and egress, proposed rents and tenant incomes, and special needs groups to be served, amenities, to be provided to the tenants, and resident manager's unit. If there will not be a resident manager for a rental project, describe in detail how the project will be managed. The proposed project is a rehabilitation of an existing three story 101 unit property located at 2800 Pacific View Drive, Corona Del Mar, 92625. Seaview Lutheran Plaza (Seaview) is a HUD Section 202 project completed in 1982, and 100 units are restricted to seniors over the age of 62 with a household income at or below 50% of Area Median Income. All tenant units are 1 -bedroom units operated under an existing Project Based Section 8 contract with the US Department of Housing and Urban Development; tenant rents are calculated at 30% of tenant income, which creates deep levels of affordability. Of the current tenants, there is 1 household under 60% AMI, 12 under 50% AMI, and 87 under 30% AMI. There is one 2 - bedroom manager unit and the project includes 63 surface parking spaces. Ingress and egress occur on Pacific View Drive. The total building is 83,150 square feet. Figure I View of property from Pacific View Drive 25-338 Figure 2 View of property elevation, including balcony Common areas include laundry facilities, open dining and gathering space with tables and chairs on the ground floor, and a community room on the third floor with meeting area, sink, seating, and a small library. All units have outdoor balcony space. There is an on-site service coordinator who assists residents with benefit eligibility and other matters. 25-339 Figure 3 Ground floor common area Figure 4 Third floor common area library 25-340 Figure 5 Typical unit kitchen Figure 6,' Typical unit bathroom with non -ADA toilet, step over tub, aged flooring r 3 The proposed rehabilitation will renovate the interiors of the apartments in order to improve their accessibility for persons with disabilities, renovate the apartment kitchens, and increase energy efficiency. Proposed work includes installation of new ADA compliant door hardware, ADA toilets and grab bars, ADA showers, lavatories and faucets. New cabinets and counters will be installed in all units, and 25-341 new flooring will be provided in the kitchens and bathrooms. New LED light fixtures will be installed in the kitchens and bathrooms. Overall, the proposed work will update this thirty-three year old property to bring it to current standards for affordable housing and help preserve its long term use. b) Provide basic site information such as property address, lot area, existing uses, current General Plan designation and zoning, consistency with zoning or if rezoning is required. The project location is 2800 Pacific View Drive, Corona Del Mar, 92625. The lot area is 2.25 acres. No changes to the existing use are proposed, and no rezoning is required. The site is zoned RM Multiple Unit Residential and its General Plan designation is RM Multiple Unit Residential. It is located in General Plan area M3. c) Describe the property location, neighborhood, transportation options, local services, and amenities within close proximity to the site. The property is located in Corona del Mar, and is across the street from Abraham Lincoln Elementary School. The rear of the property abuts the Big Canyon Reservoir, giving residents a quiet setting. Directly east/southeast of the property is the Lutheran Church of the Master. To the west/northwest is the Canyon Crest apartment community of detached townhomes. Other neighbors include a Christian Science Church, St Michael's Church, the Harbor Day School, and other multifamily townhouse -style developments. The property is near many amenities, including Gelson's Market, RiteAid, a full service Union Bank, a Mobil Gas Station, and a dry cleaners, all located in the Harbor View Shopping Center approximately 700 feet from the property. Harbor View Nature Park is less than a quarter mile away, and regional shopping destination Fashion Island is less than 1 mile away. Local bus service is operated by the Orange County Transit Agency Bus Route 76, offering service from Newport Beach to Irvine, John Wayne Airport, Santa Ana, and Huntington Beach. The bus stop is located at the corner of San Miguel Drive and Pacific View Drive, less than a quarter mile from the property. 25-342 Figure 7 Abraham Elementary, across Pacific View Drive to the south Figure 8 Lutheran Church of the Master, neighbor to the east 25-343 Figure 9 Canyon Crest apartment community, neighbor to the west / 280D Pacific View Dr, Corona Del Mar, CA 42625 e X 2800 Pacific New Dr `pa Street View Search nearby o'erwoo . PPI s D Miguel Dr m San h ��a ¢G gan �i9�ei Dr ��s Pl t 01 s ue\41 atm 5 � Sa�yji9 5 1. N 11 llnionaank � o- San f� goat �c M ygu el 4r Hard' Vi— men i ro Ilk, Peter Sa�M san M+gust Dr $an Mique Or San Miguel Dr ffesf �, �r Harbm View Gei—W is ABCIfC ✓Or 11 8, 5111apprg Center 9G_ 8 Mite Aid Pharmacy s 0 1117k l 0 Ot eye G� aoc Gam T280fl Pecitia Yew or C rP S `Psr�� tCrr r I Ihr A a0�fc y. 0 9a Or 7 Si Per, Apartments W 1 � A oa 1 �=•: G_ Figure 10 Map showing property location relative to nearby amenities Gelson's Market, RiteAid, Union Bank, and Gas Station 25-344 11 Bus Stop, Route 76 on San Miguel Drive north of Gelson's Market d) Provide a graphic description of the proposed project consisting of a preliminary site plan and elevation See attached scans of original building floor plans. The proposed work will occur solely in the building interior, and no changes to the existing site plan or elevations are anticipated. e) Description of how the project will be managed The project will be managed by CARING Housing Ministries, the current property manager. CARING has managed the property since its inception. f) Provide evidence of site control. Site control must be maintained until the property is acquired See attached title report indicating fee title ownership to Seaview Lutheran Plaza, Inc., a California non-profit corporation. g) Provide a plan for conducting community outreach to the neighbors of the proposed project and community groups. The outreach plan should describe how the proposer intends to build support for the project and address community concerns. The outreach plan should also discuss any anticipated community concerns and how they will be handled. The proposed project involves only internal rehabilitation work to an existing project, and as such, input from the wider community was not solicited at this time. In order to gather tenant input and support for renovation of the property, a 25-345 resident meeting was held on May 18, 2015, and was attended by about 40 residents. Residents communicated preferences for flooring in the apartments, accessible showers, and laundry facilities. In addition, resident questions about how the need, if any, to move from their units during the work were answered. Additional meetings will be held to provide updates to residents about the renovation plans as the project progresses. 25-346 S. Development Proforma The attached proforma shows the project's sources and uses and anticipated cash flows. Please note the following: a) Rents are based on the current rent schedule approved by HUD. All units are subsidized under a Section 8 Housing Assistance Payments Contract, under which tenants pay 30% of their income. Rents are assumed to increase 2% per annum. b) A vacancy loss of 1% is assumed. Historical vacancy rates for the property are significantly less than 1%. As the project has a 3-5 year waiting list of about 300 persons, very minimal vacancy losses are experienced. c) Operating expenses are assumed to increase at a rate of 3%. d) Replacement reserves are in the amount required by HUD. e) Any cash flow remaining after the payment of all expenses, debt service, and required reserves is deposited into the HUD residual receipts account through 2021. 25-347 6. Proposed Implementation Plan The proposed project can be implemented rapidly, as no entitlements are required and all project funding will be available through the grant. The following is the proposed implementation schedule: City approval of funding Days from City approval Revise project budget and scope of work as needed 60 days Secure bids and negotiate construction contract 90 days Secure building permits 120 days Commence renovation work 11150 days Complete renovation work 1 260 days 25-348 ATTACHMENT A: APPLICANT INFORMATION FORM Instructions. Complete the form below and remit as part of your Proposal as `Attachment A." APPLICANT INFORMATION APPLICANT/COMPANY NAME: Seaview Lutheran Plaza, Inc. ADDRESS FOR NOTICES: �� 20 MAIN CONTACT (NAME AND TITLE): L . �- s CONTACT NUMBERS: TELEPHONE: (,,2,L3W -ag4() FAX: E-MAIL ADDRESS: 1�- APPLICANT SIGNATURE AUTHORIZATION AND CERTIFICATION Per the California Corporate Code, Business and Professions Code, the Applicant's Bylaws/Operating Agreement and/or the attached Board Resolution (if applicable), 1lwe hereby verify that l/we am/are (a n) authorized signatoryllesl for the aforementioned Applicant and as such amlare authorized to sign and bind the Applicant In Can tract with the City of Newport Beach. I. APPLICANT AUTHORIZED SIGNATORY(IES) SIGNATURE ..PRINT NAME ['� A TTLEI . DATE SIGNATURE �- �` ") PRfNT.NAME TITLE_ DATE 2. SIGNATURE AUTHORIZATION IS PROVIDED IN ACCORDANCE WITH: ❑ Applicant's Bylaws/ Operating Agreement Section ❑ Copy Attached ^ .Board Resolution F::�.CCopy Attached ❑ Corporate or Business and Professions Code** **If Consultant is a corporation, two (2) authorized signatories will be required On all documents submitted, unless specified in the organization's Bylaws or corporate resolution. IMPORTANT NOTE: If the signature authorization status of any individual changes during the term of the contract, it is the responsibility of the Applicant to contact the RFP Administrator for the Applicant regarding the change and to complete and submit a new Signature Authorization Form. Incorrect information on file may delay the processing of any of the documents submitted. 121PaFc 25-349 Attachment B: Developer Team Organizational Chart Property Manager CARING Housing Ministries, Inc. Owner and Board of Directors Seaview Lutheran Plaza, Inc. Financial Consultant Nancy Lewis Associates, Inc. Contractor TBD 25-350 ATTACHMENT C Sources and Uses of Funds Seaview Lutheran Plaza Sources of Funds Total Per Unit City of Newport Beach $2,860,000 28,317 Total Uses $2,860,000 28,317 Uses of Funds Rehabilitation Structures $2,112,900 20,920 General Requirements 126,774 1,255 Contractor Overhead 44,793 443 Contractor Profit 134,380 1,330 General Liability Insurance & Bond 70,631 699 Total Rehab. Costs 2,489,479 24,648 Temporary Relocation 30,000 297 Construction Contingency 250,521 2,480 Other 0 Permit Processing Fees 25,000 248 Inspection and miscellaneous fees 15,000 149 Construction management 50,000 495 Total Other Costs 90,000 891 Total Uses 2,860,000 28,317 25-351 RENT SCHEDULE Project Name: Seaview Lutheran Plaza Project Address: 2800 Pacific View Drive, Corona del Mar Developer Name: Seaview Lutheran Plaza, Inc. 25-352 Monthly Monthly Monthly Total Unit Percent Units Utility Gross Net Monthly Type Median Allow. Rent Rent Rent ($) ONE BEDROOM HUD Contract Rent 50% 100 $21 $1,107 $1,086 $108,600 MANAGER'S UNIT 100% 1 $0 $0 $0 $0 Total 101 $108,600 TOTAL ANNUAL RENTAL INCOME $1,303,200 25-352 OPERATING EXPENSES Project Name: Seaview Lutheran Plaza Project Address: 2800 Pacific View Drive, Corona del Mar Developer: Seaview Lutheran Plaza, Inc. UNITS 101.00 ANNUAL MONTHLY PER UNIT UNIT/MO. 1. MANAGEMENT Contract Management Fee $72,000 $6,000 $713 $59 TOTAL MANAGEMENT $72,000 $6,000 $713 $59 2. ADMINISTRATION $22,600 $1,883 $224 $19 Marketing $10,570 $881 $105 $9 Audit $7,400 $617 $73 $6 Legal $3,000 $250 $30 $2 Office Expenses $119,162 $9,930 $1,180 $98 TOTAL ADMINISTRATION $140,132 $11,678 $1,387 $116 3. SALARIES AND BENEFITS $29,300 $2,442 $290 $24 On -Site Manager/Asst. Manager $49,266 $4,106 $488 $41 Maintenance Personnel $63,000 $5,250 $624 $52 Janitorial Personnel $24,000 $2,000 $238 $20 Security Payroll, Contract $20,900 $1,742 $207 $17 Housekeepers $13,032 $0 $0 $0 Payroll Txs, Ins & Wkr. Comp. $74,490 $6,208 $738 $61 TOTAL SALARIES $231,656 $19,305 $2,294 $191 4. MAINTENANCE $22,521 $1,877 $223 $19 Supplies $53,000 $4,417 $525 $44 Repairs Contract $73,100 $6,092 $490 $41 Pest Control $4,100 $342 $41 $3 Grounds Contract $19,000 $1,583 $188 $16 Interior Painting & Decorating $35,000 $2,917 $347 $29 Elevator $7,100 $592 $70 $6 TOTAL MAINTENANCE $191,300 $15,942 $1,660 $138 5. UTILITIES NOT PAID BY TENANTS Trash Removal $16,600 $1,383 $164 $14 Electricity $29,500 $2,458 $292 $24 Water $22,600 $1,883 $224 $19 Sewer $5,000 $417 $50 $4 Gas $12,500 $1,042 $124 $10 TOTAL UTILITIES $86,200 $7,183 $853 $71 6. INSURANCE Property & Liability Insurance $29,300 $2,442 $290 $24 TOTAL INSURANCE $29,300 $2,442 $290 $24 7. TAXES Business Tax and License $43,015 $3,585 $426 $35 TOTAL TAXES $43,015 $3,585 $426 $35 8. OTHER Security Rent Fee Apartment $13,032 $1,086 $129 $11 TOTAL OTHER $13,032 $1,086 $129 $11 TOTAL OPERATING EXPENSES $806,635 $67,220 $7,986 $646 Real Estate Taxes and Assessments $22,521 $1,877 $223 $19 Replacement Reserves & Painting Reserve $32,724 $2,727 $324 $27 $0 $0 $0 $0 TOTAL OPERATING EXPENSES INC. TAXES $861,880 $71,823 $8,533 $692 25-353 CASH FLOW ANALYSIS Project Name: Project Address Developer Name: ASSUMPTIONS: Residential Income Infl. Rate: Laundry & Misc. Infl. Factor: Operating Expense Infl. Factor: Vacancy Rate: Real Estate Taxes: Number of Units: Residential Income Laundry & Miscellaneous GROSS INCOME Vacancy EFFECTIVE GROSS INCOME Operating Expenses Real Estate Taxes Replacement Reserve NOI BEFORE DEBT SERVICE Debt Service CASH FLOW AFTER DEBT SERVICE Deposit to HUD Residual Receipts Account Net Cash Flow Residential Income Laundry & Miscellaneous GROSS INCOME Vacancy EFFECTIVE GROSS INCOME Operating Expenses Real Estate Taxes Replacement Reserve N01 BEFORE DEBT SERVICE Debt Service CASH FLOW AFTER DEBT SERVICE Deposit to HUD Residual Receipts Account Net Cash Flow Seaview Lutheran Plaza 2800 Pacific View Drive, Corona del Mar Seaview Lutheran Plaza, Inc. 2.00% 2.00% 3.00% 1.00% 2.00% 101 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 YEAR 11 YEAR 12 YEAR 13 YEAR 14 YEAR 15 $1,303,200 $1,329,264 $1,355,849 $1,382,966 $1,410,626 $1,438,838 $1,467,615 $1,496,967 $1,526,907 $1,557,445 $1,588,594 $1,620,365 $1,652,773 $1,685,828 $1,719,545 $4,600 $4,738 $4,880 $5,027 $5,177 $5,333 $5,493 $5,657 $5,827 $6,002 $6,182 $6,367 $6,559 $6,755 $6,958 1,090 $1,307,800 $1,334,002 $1,360,729 $1,387,993 $1,415,803 $1,444,171 $1,473,108 $1,502,625 $1,532,734 $1,563,447 $1,594,776 $1,626,733 $1,659,331 $1,692,583 $1,726,503 ($13,032) ($13,293) ($13,558) ($13,830) ($14,106) ($14,388) ($14,676) ($14,970) ($15,269) ($15,574) ($15,886) ($16,204) ($16,528) ($16,858) ($17,195) $1,294,768 $1,320,709 $1,347,171 $1,374,163 $1,401,697 $1,429,782 $1,458,431 $1,487,655 $1,517,465 $1,547,872 $1,578,890 $1,610,529 $1,642,803 $1,675,725 $1,709,307 ($806,635) ($830,834) ($855,759) ($881,432) ($907,875) ($935,111) ($963,164) ($992,059) ($1,021,821) ($1,052,476) ($1,084,050) ($1,116,571) ($1,150,069) ($1,184,571) ($1,220,108) ($22,521) ($22,971) ($23,431) ($23,899) ($24,377) ($24,865) ($25,362) ($25,870) ($26,387) ($26,915) ($27,453) ($28,002) ($28,562) ($29,133) ($29,716) 0.00% ($32,724) ($32,724) ($32,724) ($32,724) ($32,724) ($32,724) ($32,724) ($32,724) ($32,724) ($32,724) ($32,724) ($32,724) ($32,724) ($32,724) ($32,724) $0 $0 $0 $0 $0 $0 ##### $432,888 $434,180 $435,257 $436,108 $436,720 $437,082 $437,181 $437,002 $436,533 $435,758 $434,663 $433,232 $431,449 $429,297 $426,759 ($421,080) ($421,080) ($421,080) ($421,080) ($421,080) ($421,080) ($421,080) $11,808 $13,100 $14,177 $15,028 $15,640 $16,002 $16,101 $437,002 $436,533 $435,758 $434,663 $433,232 $431,449 $429,297 $426,759 ($11,808) ($13,100) ($14,177) ($15,028) ($15,640) ($16,002) ($16,101) $0 $0 $0 $0 $0 $0 $0 $0 0 0 0 0 0 0 0 437,002 436,533 435,758 434,663 433,232 431,449 429,297 426,759 YEAR 16 YEAR 17 YEAR 18 YEAR 19 YEAR 20 YEAR 21 YEAR 22 YEAR 23 YEAR 24 YEAR 25 YEAR 26 YEAR 27 YEAR 28 YEAR 29 YEAR 30 $1,753,936 $1,789,014 $1,824,795 $1,861,291 $1,898,516 $1,936,487 $1,975,216 $2,014,721 $2,055,015 $2,096,115 $2,138,038 $2,180,798 $2,224,414 $2,268,903 $2,314,281 $7,167 $7,382 $7,603 $7,831 $8,066 $8,308 $8,557 $8,814 $9,078 $9,351 $9,631 $9,920 $10,218 $10,524 $10,840 $1,761,102 $1,796,396 $1,832,398 $1,869,122 $1,906,582 $1,944,795 $1,983,774 $2,023,535 $2,064,094 $2,105,466 $2,147,669 $2,190,719 $2,234,632 $2,279,427 $2,325,121 ($17,539) ($17,890) ($18,248) ($18,613) ($18,985) ($19,365) ($19,752) ($20,147) ($20,550) ($20,961) ($21,380) ($21,808) ($22,244) ($22,689) ($23,143) $1,743,563 $1,778,506 $1,814,150 $1,850,509 $1,887,597 $1,925,430 $1,964,022 $2,003,388 $2,043,543 $2,084,505 $2,126,289 $2,168,911 $2,212,388 $2,256,738 $2,301,978 ($1,256,711) ($1,294,412) ($1,333,245) ($1,373,242) ($1,414,439) ($1,456,873) ($1,500,579) ($1,545,596) ($1,591,964) ($1,639,723) ($1,688,915) ($1,739,582) ($1,791,769) ($1,845,523) ($1,900,888) ($30,310) ($30,917) ($31,535) ($32,166) ($32,809) ($33,465) ($34,134) ($34,817) ($35,513) ($36,224) ($36,948) ($37,687) ($38,441) ($39,210) ($39,994) ($32,724) ($32,724) ($32,724) ($32,724) ($32,724) ($32,724) ($32,724) ($32,724) ($32,724) ($32,724) ($32,724) ($32,724) ($32,724) ($32,724) ($32,724) $423,818 $420,453 $416,646 $412,377 $407,625 $402,368 $396,585 $390,250 $383,342 $375,835 $367,702 $358,918 $349,454 $339,282 $328,372 $423,818 $420,453 $416,646 $412,377 $407,625 $402,368 $396,585 $390,250 $383,342 $375,835 $367,702 $358,918 $349,454 $339,282 $328,372 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 423,818 420,453 416,646 412,377 407,625 402,368 396,585 390,250 383,342 375,835 367,702 358,918 349,454 339,282 328,372 25-354 Date: 04 -Jun -15 Project: Seaview Lutheran Apartments 2800 Pacific View Drive Corona Del Mar, CA 92625 HUD Line # Trade Non Prevailing Wage Description DOORS Total Amount 10 Doors Install New Hardware Package Unit Entry DRYWALL 14 Drywall Drywall - General Repairs - Units RESILIENT FLOORING 18 Vinyl Floor Floor Prep and Vinyl Removal 18 Vinyl Floor Install Vinyl Base at Hard Floor Locations 18 Vinyl Floor Install Vinyl Plank at Entry and Kitchen 18 Vinyl Floor Install VCT at Bathroom PAINTING AND DECORATING 49,800 19 Painting Painting - Unit Interiors SPECIALTIES 100 20 Specialties Install Medicine Cabinets - Semi Recessed Over Sink Base 20 Specialties Replace Towel Bars 20 Specialties Replace TP Holders 20 Specialties Install ADA Grab Bars at Toilet and Tub CABINETS 100 22 Cabinets Demo and Removal of Cabinets and Finishes 22 Cabinets Cabinets - Unit Kitchens and Bathrooms 22 Cabinets Bathroom Counter - Granite 22 Cabinets Kitchen Counters- Granite CARPET 112,300 25 Carpet Install Carpet at Living Room and Bedroom 25 Carpet Temporarily Move and Manipulation of Furniture PLUMBING - HOT WATER 4,200 28 Plumbing 1/4 Turn Angle Stops All Sinks & Toilet Unit and Building Breakdown 100 1 Bed, 1 Bath 2 Apartment Buildings 1 Office 100 Total Units 1 Laundry 100 Total Beds 100 Total Baths Notes 25-355 Per Price Total Amount Category Quantity Each Price 57,900 100 579 57,900 57,900 49,800 100 498 49,800 49,800 54,300 100 543 54,300 65,000 100 650 65,000 130,500 100 1,305 130,500 62,000 100 620 62,000 311,800 112,300 100 1,123 112,300 Low VOC 112,300 13,900 100 139 13,900 4,200 100 42 4,200 4,000 100 40 4,000 49,800 100 498 49,800 71,900 78,900 100 789 78,900 368,700 100 3,687 368,700 55,500 100 555 55,500 132,700 100 1,327 132,700 635,800 123,400 100 1,234 123,400 35,000 100 350 35,000 158,400 19,500 500 39 19,500 Notes 25-355 Date: 04 -Jun -15 Project: Seaview Lutheran Apartments 2800 Pacific View Drive Corona Del Mar, CA 92625 Unit and Building Breakdown 100 1 Bed, 1 Bath 2 Apartment Buildings 1 Office 100 Total Units 1 Laundry 100 Total Beds 100 Total Baths HUD Line # Trade Non Prevailing Wage Description Amount Per Category Quantity Price Each Total Price Notes 28 Plumbing Kitchen Faucet 24,800 100 248 24,800 Low Flow 28 Plumbing Kitchen Sink -White Porcelain Over Iron - Undermount for Granite 37,900 100 379 37,900 28 Plumbing Provide and Install Disposal 13,700 100 137 13,700 28 Plumbing Bath Lav Faucet and Sink 59,500 100 595 59,500 Low Flow 28 Plumbing New ADA Low Flush Toilet & Wax Ring 35,200 100 352 35,200 Low Flow, 1.28 GPF 28 Plumbing Demo and Remove Shower Surrounds 21,300 100 213 21,300 28 Plumbing New Shower Surrounds with ADA Compliant Dam 245,400 100 2,454 245,400 28 Plumbing New Shower Mixing Valves 55,500 100 555 55,500 28 Plumbing Install New Shower Heads with Flexible Sprayer Head Arm 14,200 100 142 14,200 Low Flow 527,000 HVAC 29 HVAC Install New Humidistat Fan 0 0 379 0 Item removed per owner request. 0 ELECTRICAL 31 Electrical Install GFI Outlets - Kitchen (Existing Location) 15,800 200 79 15,800 31 Electrical Replace GFI Outlets - Bathroom 7,900 100 79 7,900 31 Electrical New Bathroom LED Fixture (Bath Bar) 18,400 100 184 18,400 Energy Star 31 Electrical New Kitchen LED Fixture 37,900 100 379 37,900 Energy Star 31 Electrical Install New Switch Leg for Humidistat Fan 0 0 170 0 Item removed per owner request. 80,000 SITE IMPROVEMENTS 38 Site Improvements Tight Site, Clean Up 32,500 100 325 32,500 38 Site Improvements Unforseen Conditions in Walls and Systems 75,500 100 755 75,500 108,000 Cost Per Unit Before General Requirements, Fees and Bond 2,112,900 2,112,900 21,129 Per Unit (100 units) GENERAL REQUIREMENTS 43 General Requirements General Requirements $126,774 $126,774 6.00% 44 Sub Total Construction Costs $2,239,674 $2,239,674 25-356 Date: 04 -Jun -15 Project: Seaview Lutheran Apartments 2800 Pacific View Drive Corona Del Mar, CA 92625 Unit and Building Breakdown 100 1 Bed, 1 Bath 2 Apartment Buildings 1 Office 100 Total Units 1 Laundry 100 Total Beds 100 Total Baths Alternates Not Included Asbestos, Lead and Mold Abatement Plans and/or Engineering Seismic or Structural Upgrades Special Inspection Fees Utility Company Fees Security Relocation Costs FIFE, Site Equipment and Decorator Items Based on a Lump Sum Contract Permits Per Price Total Category Quantity Each Price Notes 25-357 Non Prevailing Wage HUD Line # Trade Description Amount 45 Overhead Contractors Overhead - 2% $44,793 46 Profit Contractors Profit - 6% $134,380 47 Total Construction Costs $2,418,847 48 Other Fees Bond $36,283 49 Other Fees Insurance - Contractors General Liability $34,348 50 Other Fees Permits By Owner 51 Grand Total $2,489,478 Per Unit (100 units) $24,895 Alternates Not Included Asbestos, Lead and Mold Abatement Plans and/or Engineering Seismic or Structural Upgrades Special Inspection Fees Utility Company Fees Security Relocation Costs FIFE, Site Equipment and Decorator Items Based on a Lump Sum Contract Permits Per Price Total Category Quantity Each Price Notes 25-357 Date: 04 -Jun -15 Project: Seaview Lutheran Apartments 2800 Pacific View Drive Corona Del Mar, CA 92625 HUD Line # Trade Non Prevailing Wage Description Alternate Costs Removed Per Owners Request APPLIANCES 64,500 23 Appliances Install New Range Hood and Connect to Existing Vent 23 Appliances Install New Gas Stoves - 24" 23 Appliances Install New Refrigerators - 16 cu ft ROOFING Energy Star 8 Roof Overlay Existing TPO Roof with 60 MIL TPO Roof 8 Roof Remove and Replace Roofing at Sloped Roof Sections PAINT 1 183,100 19 Painting Painting - Exterior SPECIALTIES 1 69,010 20 Specialties Install Glass Shower Enclosure Door 20 Specialties Signs - Unit Identification 20 Specialties Signs - New Signage for Buildings WINDOW BLINDS 1 125,800 24 Blinds Replace All Window and Sliding Glass Door Blinds ELECTRICAL 31 Electrical Install New Patio/Balcony Fixtures at Units 31 Electrical Install New Entry Light Fixture 31 Electrical Install New Building Wall Pack Fixtures (Existing Locations) 31 Electrical Replace Parking Lot Poles and Lights - LED SITE IMPROVEMENTS 8,000 38 Site Improvements Sign - Project Identification LAWNS AND PLANTING 39 Landscaping Landscape - Irrigation Repairs Unit and Building Breakdown 100 1 Bed, 1 Bath 2 Apartment Buildings 1 Office 100 Total Units 1 Laundry 100 Total Beds 100 Total Baths Per Price Total Amount Category Quantity Each Price 22,100 100 221 22,100 64,500 100 645 64,500 82,400 100 824 82,400 Energy Star 169,000 183,100 1 183,100 183,100 69,010 1 69,010 69,010 252,110 125,800 1 125,800 125,800 125,800 49,800 100 498 49,800 8,700 100 87 8,700 8,000 1 8,000 8,000 Allowance 66,500 29,800 100 298 29,800 29,800 12,100 100 121 12,100 Energy Star 12,100 100 121 12,100 Energy Star 15,220 1 15,220 15,220 19,800 10 1,980 19,800 59,220 5,000 1 5,000 5,000 Allowance 5,000 10,000 1 10,000 10,000 Allowance Nates 25-358 Date: 04 -Jun -15 Project: Seaview Lutheran Apartments 2800 Pacific View Drive Corona Del Mar, CA 92625 Non Prevailing Wage HUD Line # Trade Description Unit and Building Breakdown 100 1 Bed, 1 Bath 2 Apartment Buildings 1 Office 100 Total Units 1 Laundry 100 Total Beds 100 Total Baths Per Price Total Amount Category Quantity Each Price 10,000 TOTAL 717,430 717,430 Nates 25-359 Commonwealth® LAND TITLE COMPANY Nancy Lewis & Associates 3306 Club Drive Los Agneles, CA 90064 Attn: Nancy Lewis Your Reference No: Commonwealth Land Title Company 888 S. Figueroa St Suite 2100 Los Angeles, CA 90017 Phone: (800) 432-0706 Our File No: 08014609 Title Officer: Kathy Religioso e-mail: Unit9@cltic.com Phone: (213) 330-3060 Fax: (213) 330-3105 Property Address: 2800 PACIFIC VIEW DR, City Of Newport Beach, California PRELIMINARY REPORT Dated as of May 5, 2015 at 7:30 a.m. In response to the application for a policy of title insurance referenced herein, Commonwealth Land Title Company hereby reports that it is prepared to issue, or cause to be issued, as of the date hereof, a policy or policies of title insurance describing the land and the estate or interest therein hereinafter set forth, insuring against loss which may be sustained by reason of any defect, lien or encumbrance not shown or referred to as an exception herein or not excluded from coverage pursuant to the printed Schedules, Conditions and Stipulations or Conditions of said policy forms. The printed Exceptions and Exclusions from the coverage and Limitations on Covered Risks of said policy or policies are set forth in Attachment One. The policy to be issued may contain an arbitration clause. When the Amount of Insurance is less than that set forth in the arbitration clause, all arbitrable matters shall be arbitrated at the option of either the Company or the Insured as the exclusive remedy of the parties. Limitation on Covered Risks applicable to the CLTA and ALTA Homeowner's Policies of Title Insurance which establish a Deductible Amount and a Maximum Dollar Limit of Liability for certain coverages are also set forth in Attachment One. Copies of the policy forms should be read. They are available from the office which issued this report. The policy(s) of title insurance to be issued hereunder will be policy(s) of Commonwealth Land Title Insurance Company. Please read the exceptions shown or referred to below and the exceptions and exclusions set forth in Attachment One of this report carefully. The exceptions and exclusions are meant to provide you with notice of matters which are not covered under the terms of the title insurance policy and should be carefully considered. It is important to note that this preliminary report is not a written representation as to the condition of title and may not list all liens, defects, and encumbrances affecting title to the land. This report (and any supplements or amendments hereto) is issued solely for the purpose of facilitating the issuance of a policy of title insurance and no liability is assumed hereby. If it is desired that liability be assumed prior to the issuance of a policy of title insurance, a Binder or Commitment should be requested. CLTA Preliminary Report Form — Modified (11-17-06) Page 1 25-360 File No: 08014609 SCHEDULE A The form of policy of title insurance contemplated by this report is: ALTA Extended Loan Policy (6-17-06) The estate or interest in the land hereinafter described or referred to covered by this report is: A FEE Title to said estate or interest at the date hereof is vested in: Seaview Lutheran Plaza, Inc., a California non-profit corporation The land referred to herein is situated in the County of Orange, State of California, and is described as follows: SEE EXHIBIT "A" ATTACHED HERETO AND MADE A PART HEREOF CLTA Preliminary Report Form - Modified (11-17-06) Page 2 25-361 File No: 08014609 EXHIBIT '"A" All that certain real property situated in the County of Orange, State of California, described as follows: Parcel 1 in the City of Newport Beach, County of Orange, State of California, as shown on a Map filed in Book 149, Pages 25 and 26 of Parcel Maps, in the office of the County Recorder of Orange County, California. Assessor's Parcel Number: 458-321-04 CLTA Preliminary Report Form — Modified (11-17-06) Page 3 25-362 File No: 08014609 SCHEDULE B - Section A The following exceptions will appear in policies when providing standard coverage as outlined below: 1. (a) Taxes or assessments that are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the Public Records; (b) proceedings by a public agency that may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the Public Records. 2. Any facts, rights, interests or claims that are not shown by the Public Records but that could be ascertained by an inspection of the Land or that may be asserted by persons in possession of the Land. 3. Easements, liens or encumbrances, or claims thereof, not shown by the Public Records. 4. Any encroachment, encumbrance, violation, variation or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land and not shown by the Public Records. 5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b) or (c) are shown by the Public Records. 6. Any lien or right to a lien for services, labor of material not shown by the Public Records. CLTA Preliminary Report Form — Modified (11-17-06) Page 4 25-363 File No: 08014609 SCHEDULE B - Section B At the date hereof Exceptions to coverage in addition to the printed exceptions and exclusions in said policy form would be as follows: A. Property taxes, which are a lien not yet due and payable, including any assessments collected with taxes to be levied for the fiscal year 2015-2016. B. Any liens or other assessments, bonds, or special district liens including without limitation, Community Facility Districts, that arise by reason of any local, City, Municipal or County Project or Special District. C. The lien of supplemental or escaped assessments of property taxes, if any, made pursuant to the provisions of Chapter 3.5 (commencing with Section 75) or Part 2, Chapter 3, Articles 3 and 4, respectively, of the Revenue and Taxation Code of the State of California as a result of the transfer of title to the vestee named in Schedule A or as a result of changes in ownership or new construction occurring prior to Date of Policy. 1. Water rights, claims or title to water, whether or not disclosed by the public records. 2. Easement(s) for the purpose(s) shown below and rights incidental thereto as set forth in a document: Purpose: pipe lines Recording No: in Book 4143, Page 395 of Official Records Affects: the Northwesterly 30 feet 3. Easement(s) for the purpose(s) shown below and rights incidental thereto, as granted in a document: Granted to: City of Newport Beach Purpose: road for ingress and egress Recording Date: December 20, 1957 Recording No: in Book 4143, Page 395 of Official Records Affects: The herein described Land and other land. 4. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other matters shown on Map: Record of Survey Recording No: in Book 50, Page 37 Record of Survey 5. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other matters shown on Map: Record of Survey Recording No: in Book 63, Page 45 Record of Survey 6. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other matters shown on Map: Record of Survey Recording No: in Book 64, Page 23 Record of Survey CLTA Preliminary Report Form — Modified (11-17-06) Page 5 25-364 File No: 08014609 7. Covenants, conditions, restrictions and easements but omitting any covenants or restrictions, if any, including but not limited to those based upon race, color, religion, sex, sexual orientation, familial status, marital status, disability, handicap, national origin, ancestry, source of income, gender, gender identity, gender expression, medical condition or genetic information, as set forth in applicable state or federal laws, except to the extent that said covenant or restriction is permitted by applicable law, as set forth in the document Recording Date: April 20, 1964 Recording No: in Book 7010, Page 662 of Official Records Said instrument provides or establishes: Road purposes. Affects: The herein described Land and other land. Modification(s) of said covenants, conditions and restrictions Recording Date: April 13, 1981 Recording No: in Book 14017, Page 1250 of Official Records 8. Covenants, conditions and restrictions but omitting any covenants or restrictions, if any, including but not limited to those based upon race, color, religion, sex, sexual orientation, familial status, marital status, disability, handicap, national origin, ancestry, source of income, gender, gender identity, gender expression, medical condition or genetic information, as set forth in applicable state or federal laws, except to the extent that said covenant or restriction is permitted by applicable law, as set forth in the document Recording No: in Book 7010, Page 662 of Official Records Affects: Parcels 1 and 2 Said covenants, conditions and restrictions provide that a violation thereof shall not defeat the lien of any mortgage or deed of trust made in good faith and for value. 9. Recitals as shown on that certain Parcel Map No. 80-712 Recording No: in Book 149, Page 25 Parcel Maps Which among other things recites proposed 3 foot easement for pipelines to the City of Newport Beach. Reference is hereby made to said document for full particulars. 10. Easement(s) for the purpose(s) shown below and rights incidental thereto, as granted in a document: Granted to: City of Newport Beach, a municipal corporation Purpose: pipelines Recording Date: August 20, 1980 Recording No: in Book 13723, Page 1438 of Official Records Affects: said land more particularly described therein. CLTA Preliminary Report Form — Modified (11-17-06) Page 6 25-365 File No: 08014609 11. A deed of trust to secure an indebtedness in the amount shown below, Amount: $4,467,500.00 Dated: April 1, 1981 Trustor/Grantor Seaview Lutheran Plaza, Inc., a California nonprofit corporation Trustee: Title Insurance and Trust Company, a California Corporation Beneficiary: United States of America acting by and through the Secretary of Housing and Urban Development Loan No.: Not set out Recording Date: April 15, 1981 Recording No: in Book 14021, Page 36 of Official Records An agreement to modify the terms and provisions of said deed of trust as therein provided Executed by: Seaview Lutheran Plaza and the United States of America acting by and through the Secretary of Housing and Urban Development Recording Date: January 26, 1984 Recording No: as Instrument No. 84-036723 of Official Records 12. Matters contained in that certain document Entitled: Regulatory Agreement Housing for the Elderly - Nonprofit Dated: April 1, 1981 Executed by: Seaview Lutheran Plaza, Inc. and Secretary of Housing and Urban Development Recording Date: April 15, 1981 Recording No: in Book 14021, Page 42 of Official Records Reference is hereby made to said document for full particulars. An agreement to modify the terms and provisions of the said document, as therein provided Executed by: Seaview Lutheran Plaza, Inc., and its successors and assigns and the Secretary of Housing and Urban Development, acting by and through the Federal Housing Commissioner, and his successors Recording Date: August 14, 1985 Recording No: as Instrument No. 85-302702 of Official Records 13. Easement(s) for the purpose(s) shown below and rights incidental thereto, as granted in a document: Granted to: Southern California Edison Company, a Corporation Purpose: public utilities Recording Date: September 29, 1981 Recording No: in Book 14237, Page 1027 of Official Records Affects: said land more particularly described therein. 14. Matters contained in that certain document Entitled: Annexation and Development Agreement Dated: August 23, 2001 Executed by: City of Newport Beach and the Irvine Company and Irvine Community Development Company Recording Date: November 8, 2001 Recording No: as Instrument No. 20010800494 of Official Records Reference is hereby made to said document for full particulars. CLTA Preliminary Report Form — Modified (11-17-06) Page 7 25-366 File No: 08014609 An agreement to modify the terms and provisions of the said document, as therein provided Executed by: City of Newport Beach, a California municipal corporation and charter city and Seaview Lutheran Plaza, Inc., a California nonprofit corporation Recording Date: January 6, 2011 Recording No: as Instrument No. 2011000010923 of Official Records 15. A financing statement as follows: Debtor: Seaview Lutheran Plaza, Inc. Secured Party: Secretary of Housing and Urban Development of Washington D.C. Recording Date: July 26, 2012 Recording No: as Instrument No. 2012000426273 of Official Records 16. Any rights of the parties in possession of a portion of, or all of, said Land, which rights are not disclosed by the public records. The Company will require, for review, a full and complete copy of any unrecorded agreement, contract, license and/or lease, together with all supplements, assignments and amendments thereto, before issuing any policy of title insurance without excepting this item from coverage. The Company reserves the right to except additional items and/or make additional requirements after reviewing said documents. 17. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other matters which a correct survey would disclose and which are not shown by the public records. 18. Any easements not disclosed by the public records as to matters affecting title to real property, whether or not said easements are visible and apparent. 19. Matters which may be disclosed by an inspection and/or by a correct ALTA/ACSM Land Title Survey of said Land that is satisfactory to the Company, and/or by inquiry of the parties in possession thereof. END OF SCHEDULE B EXCEPTIONS PLEASE REFER TO THE "NOTES AND REQUIREMENTS SECTION" WHICH FOLLOWS FOR INFORMATION NECESSARY TO COMPLETE THIS TRANSACTION CLTA Preliminary Report Form — Modified (11-17-06) Page 8 25-367 File No: 08014609 REQUIREMENTS SECTION: REQ NO. 1: In order to complete this report, the Company requires a Statement of Information to be completed by the following party(s), Party(s): buyer/seller The Company reserves the right to add additional items or make further requirements after review of the requested Statement of Information. NOTE: The Statement of Information is necessary to complete the search and examination of title under this order. Any title search includes matters that are indexed by name only, and having a completed Statement of Information assists the Company in the elimination of certain matters which appear to involve the parties but in fact affect another party with the same or similar name. Be assured that the Statement of Information is essential and will be kept strictly confidential to this file. REQ NO.2: Before issuing its policy of title insurance, the Company will require evidence, satisfactory to the Company, that the vestee corporation named herein a) was duly incorporated on or before the date title was acquired by the said corporation; b) is now in good standing and authorized to do business in the state or country where the said corporation was formed; and C) has complied with the "doing business" laws of the State of California. CLTA Preliminary Report Form — Modified (11-17-06) Page 9 25-368 File No: 08014609 INFORMATIONAL NOTES SECTION NOTE NO. 1: The information on the attached plat is provided for your convenience as a guide to the general location of the subject property. The accuracy of this plat is not guaranteed, nor is it a part of any policy, report or guarantee to which it may be attached. NOTE NO. 2: For wiring Instructions please contact your Title Officer or Title Company Escrow officer. NOTE NO. 3: Property taxes, including any personal property taxes and any assessments collected with taxes, are paid. For proration purposes the amounts were: Tax Identification No.: 458-321-04 Fiscal Year: 2014-2015 1st Installment: $11,215.09 2nd Installment: $11,215.09 Exemption: Not set out Code Area: 07034 NOTE NO. 4: None of the items shown in this report will cause the Company to decline to attach CLTA Endorsement Form 100 to an ALTA Loan Policy, when issued. The following information will be included in the CLTA Form 116 or ALTA Form 22-06 Endorsement to be issued pursuant to this order: There is located on said Land: multiple family residence Known as: 2800 Pacific View Drive, City of Newport Beach, Ca The Company requires current beneficiary demands prior to closing. If the demand is expired and a current demand cannot be obtained, our requirements will be as follows: a) If the Company accepts a verbal update on the demand, we may hold an amount equal to one monthly mortgage payment. This hold will be in addition to the verbal hold the lender may have stipulated. b) If the Company cannot obtain a verbal update on the demand, we will either pay off the expired demand or wait for the amended demand, at our discretion. C) All payoff figures are verified at closing. If the customer's last payment was made within 15 days of closing, our Payoff Department may hold one month's payment to insure the check has cleared the bank (unless a copy of the cancelled check is provided, in which case there will be no hold). Typist: tga Date Typed: May 20, 2015 CLTA Preliminary Report Form - Modified (11-17-06) Page 10 25-369 Attachment One (Revised 06-05-14) CALIFORNIA LAND TITLE ASSOCIATION STANDARD COVERAGE POLICY - 1990 EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys' fees or expenses which arise by reason of: 1. (a) Any law, ordinance or governmental regulation (including but not limited to building or zoning laws, ordinances, or regulations) restricting, regulating, prohibiting or relating (i) the occupancy, use, or enjoyment of the land; (ii) the character, dimensions or location of any improvement now or hereafter erected on the land; (iii) a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part; or (iv) environmental protection, or the effect of any violation of these laws, ordinances or governmental regulations, except to the extent that a notice of the enforcement thereof or a notice of a defect, lien, or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. (b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. 2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, but not excluding from coverage any taking which has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without knowledge. 3. Defects, liens, encumbrances, adverse claims or other matters: (a) whether or not recorded in the public records at Date of Policy, but created, suffered, assumed or agreed to by the insured claimant; (b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy; (c) resulting in no loss or damage to the insured claimant; (d) attaching or created subsequent to Date of Policy; or (e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the insured mortgage or for the estate or interest insured by this policy. 4. Unenforceability of the lien of the insured mortgage because of the inability or failure of the insured at Date of Policy, or the inability or failure of any subsequent owner of the indebtedness, to comply with the applicable doing business laws of the state in which the land is situated. 5. Invalidity or unenforceability of the lien of the insured mortgage, or claim thereof, which arises out of the transaction evidenced by the insured mortgage and is based upon usury or any consumer credit protection or truth in lending law. 6. Any claim, which arises out of the transaction vesting in the insured the estate of interest insured by this policy or the transaction creating the interest of the insured lender, by reason of the operation of federal bankruptcy, state insolvency or similar creditors' rights laws. EXCEPTIONS FROM COVERAGE -SCHEDULE B, PART I This policy does not insure against loss or damage (and the Company will not pay costs, attorneys' fees or expenses) which arise by reason of: 1. Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the public records. Proceedings by a public agency which may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the public records. 2. Any facts, rights, interests, or claims which are not shown by the public records but which could be ascertained by an inspection of the land or which may be asserted by persons in possession thereof. 3. Easements, liens or encumbrances, or claims thereof, not shown by the public records. 4. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other facts which a correct survey would disclose, and which are not shown by the public records. 5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b) or (c) are shown by the public records. 6. Any lien or right to a lien for services, labor or material not shown by the public records. CLTA HOMEOWNER'S POLICY OF TITLE INSURANCE (12-02-13) ALTA HOMEOWNER'S POLICY OF TITLE INSURANCE EXCLUSIONS In addition to the Exceptions in Schedule B, You are not insured against loss, costs, attorneys' fees, and expenses resulting from: 1. Governmental police power, and the existence or violation of those portions of any law or government regulation concerning: a. building; b. zoning; c. land use; d. improvements on the Land; e. land division; and f. environmental protection. This Exclusion does not limit the coverage described in Covered Risk 8.a., 14, 15, 16, 18, 19, 20, 23 or 27. 2. The failure of Your existing structures, or any part of them, to be constructed in accordance with applicable building codes. This Exclusion does not limit the coverage described in Covered Risk 14 or 15. 3. The right to take the Land by condemning it. This Exclusion does not limit the coverage described in Covered Risk 17. 4. Risks: © California Land Title Association. All rights reserved. The use of this Form is restricted to CLTA subscribers in good standing as of the date of use. All other uses are prohibited. Reprinted under license or express permission from the California Land Title Association. Page 11 25-370 File No: 08014609 a. that are created, allowed, or agreed to by You, whether or not they are recorded in the Public Records; b. that are Known to You at the Policy Date, but not to Us, unless they are recorded in the Public Records at the Policy Date; c. that result in no loss to You; or d. that first occur after the Policy Date - this does not limit the coverage described in Covered Risk 7, 8.e., 25, 26, 27 or 28. 5. Failure to pay value for Your Title. 6. Lack of a right: a. to any land outside the area specifically described and referred to in paragraph 3 of Schedule A; and b. in streets, alleys, or waterways that touch the Land. This Exclusion does not limit the coverage described in Covered Risk 11 or 21. 7. The transfer of the Title to You is invalid as a preferential transfer or as a fraudulent transfer or conveyance under federal bankruptcy, state insolvency, or similar creditors' rights laws. 8. Contamination, explosion, fire, flooding, vibration, fracturing, earthquake, or subsidence. 9. Negligence by a person or an Entity exercising a right to extract or develop minerals, water, or any other substances. LIMITATIONS ON COVERED RISKS Your insurance for the following Covered Risks is limited on the Owner's Coverage Statement as follows: • For Covered Risk 16, 18, 19, and 21 Your Deductible Amount and Our Maximum Dollar Limit of Liability shown in Schedule A. The deductible amounts and maximum dollar limits shown on Schedule A are as follows: The following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damage, costs, attorneys' fees, or expenses that arise by reason of: 1. (a) Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to (i) the occupancy, use, or enjoyment of the Land; (ii) the character, dimensions, or location of any improvement erected on the Land; (iii) the subdivision of land; or (iv) environmental protection; or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion 1(a) does not modify or limit the coverage provided under Covered Risk 5. (b) Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 6. 2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8. 3. Defects, liens, encumbrances, adverse claims, or other matters (a) created, suffered, assumed, or agreed to by the Insured Claimant; (b) not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; (c) resulting in no loss or damage to the Insured Claimant; (d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 11, 13 or 14); or (e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Insured Mortgage. 4. Unenforceability of the lien of the Insured Mortgage because of the inability or failure of an Insured to comply with applicable doing - business laws of the state where the Land is situated. 5. Invalidity or unenforceability in whole or in part of the lien of the Insured Mortgage that arises out of the transaction evidenced by the Insured Mortgage and is based upon usury or any consumer credit protection or truth -in -lending law. 6. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that the transaction creating the lien of the Insured Mortgage, is (a) a fraudulent conveyance or fraudulent transfer, or (b) a preferential transfer for any reason not stated in Covered Risk 13(b) of this policy. © California Land Title Association. All rights reserved. The use of this Form is restricted to CLTA subscribers in good standing as of the date of use. All other uses are prohibited. Reprinted under license or express permission from the California Land Title Association. Page 12 25-371 Our Maximum Dollar Your Deductible Amount Limit of Liability 1.00% of Policy Amount Shown in Schedule A or $2,500.00 Covered Risk 16: (whichever is less) $ 10,000.00 1.00% of Policy Amount Shown in Schedule A or $5,000.00 Covered Risk 18: (whichever is less) $ 25,000.00 1.00% of Policy Amount Shown in Schedule A or $5,000.00 Covered Risk 19: (whichever is less) $25,000.00 1.00% of Policy Amount Shown in Schedule A or $2,500.00 Covered Risk 21: (whichever is less) $ 5,000.00 2006 ALTA LOAN POLICY (06-17-06) EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damage, costs, attorneys' fees, or expenses that arise by reason of: 1. (a) Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to (i) the occupancy, use, or enjoyment of the Land; (ii) the character, dimensions, or location of any improvement erected on the Land; (iii) the subdivision of land; or (iv) environmental protection; or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion 1(a) does not modify or limit the coverage provided under Covered Risk 5. (b) Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 6. 2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8. 3. Defects, liens, encumbrances, adverse claims, or other matters (a) created, suffered, assumed, or agreed to by the Insured Claimant; (b) not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; (c) resulting in no loss or damage to the Insured Claimant; (d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 11, 13 or 14); or (e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Insured Mortgage. 4. Unenforceability of the lien of the Insured Mortgage because of the inability or failure of an Insured to comply with applicable doing - business laws of the state where the Land is situated. 5. Invalidity or unenforceability in whole or in part of the lien of the Insured Mortgage that arises out of the transaction evidenced by the Insured Mortgage and is based upon usury or any consumer credit protection or truth -in -lending law. 6. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that the transaction creating the lien of the Insured Mortgage, is (a) a fraudulent conveyance or fraudulent transfer, or (b) a preferential transfer for any reason not stated in Covered Risk 13(b) of this policy. © California Land Title Association. All rights reserved. The use of this Form is restricted to CLTA subscribers in good standing as of the date of use. All other uses are prohibited. Reprinted under license or express permission from the California Land Title Association. Page 12 25-371 File No: 08014609 7. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of Policy and the date of recording of the Insured Mortgage in the Public Records. This Exclusion does not modify or limit the coverage provided under Covered Risk 11(b). The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage: EXCEPTIONS FROM COVERAGE Except as provided in Schedule B - Part II, this policy does not insure against loss or damage, and the Company will not pay costs, attorneys' fees or expenses, that arise by reason of: PART I The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage: 1. (a) Taxes or assessments that are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the Public Records; (b) proceedings by a public agency that may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the Public Records. 2. Any facts, rights, interests, or claims that are not shown by the Public Records but that could be ascertained by an inspection of the Land or that may be asserted by persons in possession of the Land. 3. Easements, liens or encumbrances, or claims thereof, not shown by the Public Records. 4. Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land and not shown by the Public Records. 5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b), or (c) are shown by the Public Records. 6. Any lien or right to a lien for services, labor or material not shown by the Public Records. PART II In addition to the matters set forth in Part I of this Schedule, the Title is subject to the following matters, and the Company insures against loss or damage sustained in the event that they are not subordinate to the lien of the Insured Mortgage: 2006 ALTA OWNER'S POLICY (06-17-06) EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damage, costs, attorneys' fees, or expenses that arise by reason of: 1. (a) Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to (i) the occupancy, use, or enjoyment of the Land; (ii) the character, dimensions, or location of any improvement erected on the Land; (iii) the subdivision of land; or (iv) environmental protection; or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion 1(a) does not modify or limit the coverage provided under Covered Risk 5. (b) Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 6. 2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8. 3. Defects, liens, encumbrances, adverse claims, or other matters (a) created, suffered, assumed, or agreed to by the Insured Claimant; (b) not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; (c) resulting in no loss or damage to the Insured Claimant; (d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 9 and 10); or (e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Title. 4. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that the transaction vesting the Title as shown in Schedule A, is (a) a fraudulent conveyance or fraudulent transfer; or (b) a preferential transfer for any reason not stated in Covered Risk 9 of this policy. 5. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of Policy and the date of recording of the deed or other instrument of transfer in the Public Records that vests Title as shown in Schedule A. The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage: EXCEPTIONS FROM COVERAGE This policy does not insure against loss or damage, and the Company will not pay costs, attorneys' fees or expenses, that arise by reason of: The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage: © California Land Title Association. All rights reserved. The use of this Form is restricted to CLTA subscribers in good standing as of the date of use. All other uses are prohibited. Reprinted under license or express permission from the California Land Title Association. Page 13 25-372 File No: 08014609 1. (a) Taxes or assessments that are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the Public Records; (b) proceedings by a public agency that may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the Public Records. 2. Any facts, rights, interests, or claims that are not shown in the Public Records but that could be ascertained by an inspection of the Land or that may be asserted by persons in possession of the Land. 3. Easements, liens or encumbrances, or claims thereof, not shown by the Public Records. 4. Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land and that are not shown by the Public Records. 5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b), or (c) are shown by the Public Records. 6. Any lien or right to a lien for services, labor or material not shown by the Public Records. 7. Variable exceptions such as taxes, easements, CC&R's, etc. shown here. ALTA EXPANDED COVERAGE RESIDENTIAL LOAN POLICY (12-02-13) EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys' fees or expenses which arise by reason of: 1. (a) Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to (i) the occupancy, use, or enjoyment of the Land; (ii) the character, dimensions, or location of any improvement erected on the Land; (iii) the subdivision of land; or (iv) environmental protection; or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion 1(a) does not modify or limit the coverage provided under Covered Risk 5, 6, 13(c), 13(d), 14 or 16. (b) Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 5, 6, 13(c), 13(d), 14 or 16. 2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8. 3. Defects, liens, encumbrances, adverse claims, or other matters (a) created, suffered, assumed, or agreed to by the Insured Claimant; (b) not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; (c) resulting in no loss or damage to the Insured Claimant; (d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 11, 16, 17, 18, 19, 20, 21, 22, 23, 24, 27 or 28); or (e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Insured Mortgage. 4. Unenforceability of the lien of the Insured Mortgage because of the inability or failure of an Insured to comply with applicable doing - business laws of the state where the Land is situated. 5. Invalidity or unenforceability in whole or in part of the lien of the Insured Mortgage that arises out of the transaction evidenced by the Insured Mortgage and is based upon usury, or any consumer credit protection or truth -in -lending law. This Exclusion does not modify or limit the coverage provided in Covered Risk 26. 6. Any claim of invalidity, unenforceability or lack of priority of the lien of the Insured Mortgage as to Advances or modifications made after the Insured has Knowledge that the vestee shown in Schedule A is no longer the owner of the estate or interest covered by this policy. This Exclusion does not modify or limit the coverage provided in Covered Risk 11. 7. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching subsequent to Date of Policy. This Exclusion does not modify or limit the coverage provided in Covered Risk 11(b) or 25. 8. The failure of the residential structure, or any portion of it, to have been constructed before, on or after Date of Policy in accordance with applicable building codes. This Exclusion does not modify or limit the coverage provided in Covered Risk 5 or 6. 9. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that the transaction creating the lien of the Insured Mortgage, is (a) a fraudulent conveyance or fraudulent transfer, or (b) a preferential transfer for any reason not stated in Covered Risk 27(b) of this policy. 10. Contamination, explosion, fire, flooding, vibration, fracturing, earthquake, or subsidence. 11. Negligence by a person or an Entity exercising a right to extract or develop minerals, water, or any other substances. © California Land Title Association. All rights reserved. The use of this Form is restricted to CLTA subscribers in good standing as of the date of use. All other uses are prohibited. Reprinted under license or express permission from the California Land Title Association. Page 14 25-373 File No. 08014609 Notice of Available Discounts Pursuant to Section 2355.3 in Title 10 of the California Code of Regulations Fidelity National Financial, Inc. and its subsidiaries ("FNF") must deliver a notice of each discount available under our current rate filing along with the delivery of escrow instructions, a preliminary report or commitment. Please be aware that the provision of this notice does not constitute a waiver of the consumer's right to be charged the filed rate. As such, your transaction may not qualify for the below discounts. You are encouraged to discuss the applicability of one or more of the below discounts with a Company representative. These discounts are generally described below; consult the rate manual for a full description of the terms, conditions and requirements for such discount. These discounts only apply to transactions involving services rendered by the FNF Family of Companies. This notice only applies to transactions involving property improved with a one -to -four family residential dwelling. FNF Underwritten Title Company FNF Underwriter LTC - Lawyers Title Company CLTIC - Commonwealth Land Title Insurance Co. Available Discounts DISASTER LOANS (CLTIC) The charge for a Lender's Policy (Standard or Extended coverage) covering the financing or refinancing by an owner of record, within 24 months of the date of a declaration of a disaster area by the government of the United States or the State of California on any land located in said area, which was partially or totally destroyed in the disaster, will be 50% of the appropriate title insurance rate. EMPLOYEE RATE (LTC and CLTIC) No charge shall be made to employees (including employees on approved retirement) of the Company or its underwritten, subsidiary or affiliated title companies for policies or escrow services in connection with financing, refinancing, sale or purchase of the employees' bona fide home property. Waiver of such charges is authorized only in connection with those costs which the employee would be obligated to pay, by established custom, as a party to the transaction. Notice of Available Discounts Mod. 10/21/2011 Page 15 25-374 FIDELITY NATIONAL FINANCIAL PRIVACY NOTICE Fidelity National Financial, Inc. and its majority-owned subsidiary companies providing real estate- and loan -related services (collectively, "FNF", "our" or "we") respect and are committed to protecting your privacy. This Privacy Notice lets you know how and for what purposes your Personal Information (as defined herein) is being collected, processed and used by FNF. We pledge that we will take reasonable steps to ensure that your Personal Information will only be used in ways that are in compliance with this Privacy Notice. The provision of this Privacy Notice to you does not create any express or implied relationship, or create any express or implied duty or other obligation, between Fidelity National Financial, Inc. and you. See also No Representations or Warranties below. This Privacy Notice is only in effect for any generic information and Personal Information collected and/or owned by FNF, including collection through any FNF website and any online features, services and/or programs offered by FNF (collectively, the "Website"). This Privacy Notice is not applicable to any other web pages, mobile applications, social media sites, email lists, generic information or Personal Information collected and/or owned by any entity other than FNF. How Information is Collected The types of personal information FNF collects may include, among other things (collectively, "Personal Information"): (1) contact information (e.g., name, address, phone number, email address); (2) demographic information (e.g., date of birth, gender marital status); (3) Internet protocol (or IP) address or device ID/UDID; (4) social security number (SSN), student ID (SIN), driver's license, passport, and other government ID numbers; (5) financial account information; and (6) information related to offenses or criminal convictions. In the course of our business, we may collect Personal Information about you from the following sources: • Applications or other forms we receive from you or your authorized representative; • Information we receive from you through the Website; • Information about your transactions with or services performed by us, our affiliates, or others; and • From consumer or other reporting agencies and public records maintained by governmental entities that we either obtain directly from those entities, or from our affiliates or others. Additional Ways Information is Collected Through the Website Browser Log Files. Our servers automatically log each visitor to the Website and collect and record certain information about each visitor. This information may include IP address, browser language, browser type, operating system, domain names, browsing history (including time spent at a domain, time and date of your visit), referring/exit web pages and URLs, and number of clicks. The domain name and IP address reveal nothing personal about the user other than the IP address from which the user has accessed the Website. Cookies. From time to time, FNF or other third parties may send a "cookie" to your computer. A cookie is a small piece of data that is sent to your Internet browser from a web server and stored on your computer's hard drive and that can be re -sent to the serving website on subsequent visits. A cookie, by itself, cannot read other data from your hard disk or read other cookie files already on your computer. A cookie, by itself, does not damage your system. We, our advertisers and other third parties may use cookies to identify and keep track of, among other things, those areas of the Website and third party websites that you have visited in the past in order to enhance your next visit to the Website. You can choose whether or not to accept cookies by changing the settings of your Internet browser, but some functionality of the Website Privacy Notice Effective: May 1, 2015 may be impaired or not function as intended. See the Third Party Opt Out section below. Web Beacons. Some of our web pages and electronic communications may contain images, which may or may not be visible to you, known as Web Beacons (sometimes referred to as "clear gifs"). Web Beacons collect only limited information that includes a cookie number; time and date of a page view; and a description of the page on which the Web Beacon resides. We may also carry Web Beacons placed by third party advertisers. These Web Beacons do not carry any Personal Information and are only used to track usage of the Website and activities associated with the Website. See the Third Party Opt Out section below. Unique Identifier. We may assign you a unique internal identifier to help keep track of your future visits. We may use this information to gather aggregate demographic information about our visitors, and we may use it to personalize the information you see on the Website and some of the electronic communications you receive from us. We keep this information for our internal use, and this information is not shared with others. Third Party Opt Out. Although we do not presently, in the future we may allow third -party companies to serve advertisements and/or collect certain anonymous information when you visit the Website. These companies may use non -personally identifiable information (e.g., click stream information, browser type, time and date, subject of advertisements clicked or scrolled over) during your visits to the Website in order to provide advertisements about products and services likely to be of greater interest to you. These companies typically use a cookie or third party Web Beacon to collect this information, as further described above. Through these technologies, the third party may have access to and use non -personalized information about your online usage activity. You can opt -out of certain online behavioral services through any one of the ways described below. After you opt -out, you may continue to receive advertisements, but those advertisements will no longer be as relevant to you. • You can opt -out via the Network Advertising Initiative industry opt -out at h!Ltp://www.networkadvertising.org/. • You can opt -out via the Consumer Choice Page at htW://www.aboutads.info. • For those in the U.K., you can opt -out via the IAB UK's industry opt -out at http://www.yourontinechoices.com. • You can configure your web browser (Chrome, Firefox, Internet Explorer, Safari, etc.) to delete and/or control the use of cookies. More information can be found in the Help system of your browser. Note: If you opt -out as described above, you should not delete your cookies. If you delete your cookies, you will need to opt -out again. Use of Personal Information Information collected by FNF is used for three main purposes: To provide products and services to you or one or more third party service providers (collectively, "Third Parties") who are obtaining services on your behalf or in connection with a transaction involving you. To improve our products and services that we perform for you or for Third Parties. To communicate with you and to inform you about FNF's, FNF's affiliates and third parties' products and services. When Information Is Disclosed By FNF We may provide your Personal Information (excluding information we receive from consumer or other credit reporting agencies) to various individuals and companies, 25-375 as permitted by law, without obtaining your prior authorization. Such laws do not allow consumers to restrict these disclosures. Disclosures may include, without limitation, the following: • To agents, brokers, representatives, or others to provide you with services you have requested, and to enable us to detect or prevent criminal activity, fraud, material misrepresentation, or nondisclosure in connection with an insurance transaction; • To third -party contractors or service providers who provide services or perform marketing services or other functions on our behalf, • To law enforcement or other governmental authority in connection with an investigation, or civil or criminal subpoenas or court orders; and/or • To lenders, lien holders, judgment creditors, or other parties claiming an encumbrance or an interest in title whose claim or interest must be determined, settled, paid or released prior to a title or escrow closing. In addition to the other times when we might disclose information about you, we might also disclose information when required by law or in the good -faith belief that such disclosure is necessary to: (1) comply with a legal process or applicable laws; (2) enforce this Privacy Notice; (3) respond to claims that any materials, documents, images, graphics, logos, designs, audio, video and any other information provided by you violates the rights of third parties; or (4) protect the rights, property or personal safety of FNF, its users or the public. We maintain reasonable safeguards to keep the Personal Information that is disclosed to us secure. We provide Personal Information and non - Personal Information to our subsidiaries, affiliated companies, and other businesses or persons for the purposes of processing such information on our behalf and promoting the services of our trusted business partners, some or all of which may store your information on servers outside of the United States. We require that these parties agree to process such information in compliance with our Privacy Notice or in a similar, industry -standard manner, and we use reasonable efforts to limit their use of such information and to use other appropriate confidentiality and security measures. The use of your information by one of our trusted business partners may be subject to that party's own Privacy Notice. We do not, however, disclose information we collect from consumer or credit reporting agencies with our affiliates or others without your consent, in conformity with applicable law, unless such disclosure is otherwise permitted by law. We also reserve the right to disclose Personal Information and/or non - Personal Information to take precautions against liability, investigate and defend against any third -party claims or allegations, assist government enforcement agencies, protect the security or integrity of the Website, and protect the rights, property, or personal safety of FNF, our users or others. We reserve the right to transfer your Personal Information, as well as any other information, in connection with the sale or other disposition of all or part of the FNF business and/or assets. We also cannot make any representations regarding the use or transfer of your Personal Information or other information that we may have in the event of our bankruptcy, reorganization, insolvency, receivership or an assignment for the benefit of creditors, and you expressly agree and consent to the use and/or transfer of your Personal Information or other information in connection with a sale or transfer of some or all of our assets in any of the above described proceedings. Furthermore, we cannot and will not be responsible for any breach of security by any third parties or for any actions of any third parties that receive any of the information that is disclosed to us. Information From Children We do not collect Personal Information from any person that we know to be under the age of thirteen (13). Specifically, the Website is not intended or designed to attract children under the age of thirteen (13). Privacy Notice Effective: May 1, 2015 You affirm that you are either more than 18 years of age, or an emancipated minor, or possess legal parental or guardian consent, and are fully able and competent to enter into the terms, conditions, obligations, affirmations, representations, and warranties set forth in this Privacy Notice, and to abide by and comply with this Privacy Notice. In any case, you affirm that you are over the age of 13, as THE WEBSITE IS NOT INTENDED FOR CHILDREN UNDER 13 THAT ARE UNACCOMPANIED BY HIS OR HER PARENT OR LEGAL GUARDIAN. Parents should be aware that FNF's Privacy Notice will govern our use of Personal Information, but also that information that is voluntarily given by children — or others — in email exchanges, bulletin boards or the like may be used by other parties to generate unsolicited communications. FNF encourages all parents to instruct their children in the safe and responsible use of their Personal Information while using the Internet. Privacy Outside the Website The Website may contain various links to other websites, including links to various third party service providers. FNF is not and cannot be responsible for the privacy practices or the content of any of those other websites. Other than under agreements with certain reputable organizations and companies, and except for third party service providers whose services either we use or you voluntarily elect to utilize, we do not share any of the Personal Information that you provide to us with any of the websites to which the Website links, although we may share aggregate, non -Personal Information with those other third parties. Please check with those websites in order to determine their privacy policies and your rights under them. European Union Users If you are a citizen of the European Union, please note that we may transfer your Personal Information outside the European Union for use for any of the purposes described in this Privacy Notice. By providing FNF with your Personal Information, you consent to both our collection and such transfer of your Personal Information in accordance with this Privacy Notice. Choices With Your Personal Information Whether you submit Personal Information to FNF is entirely up to you. You may decide not to submit Personal Information, in which case FNF may not be able to provide certain services or products to you. You may choose to prevent FNF from disclosing or using your Personal Information under certain circumstances ("opt out"). You may opt out of any disclosure or use of your Personal Information for purposes that are incompatible with the purpose(s) for which it was originally collected or for which you subsequently gave authorization by notifying us by one of the methods at the end of this Privacy Notice. Furthermore, even where your Personal Information is to be disclosed and used in accordance with the stated purposes in this Privacy Notice, you may elect to opt out of such disclosure to and use by a third party that is not acting as an agent of FNF. As described above, there are some uses from which you cannot opt -out. Please note that opting out of the disclosure and use of your Personal Information as a prospective employee may prevent you from being hired as an employee by FNF to the extent that provision of your Personal Information is required to apply for an open position. If FNF collects Personal Information from you, such information will not be disclosed or used by FNF for purposes that are incompatible with the purpose(s) for which it was originally collected or for which you subsequently gave authorization unless you affirmatively consent to such disclosure and use. You may opt out of online behavioral advertising by following the instructions set forth above under the above section "Additional Ways That Information Is Collected Through the Website," subsection "Third Party Opt Out." 25-376 Access and Correction To access your Personal Information in the possession of FNF and correct inaccuracies of that information in our records, please contact us in the manner specified at the end of this Privacy Notice. We ask individuals to identify themselves and the information requested to be accessed and amended before processing such requests, and we may decline to process requests in limited circumstances as permitted by applicable privacy legislation. Your California Privacy Rights Under California's "Shine the Light" law, California residents who provide certain personally identifiable information in connection with obtaining products or services for personal, family or household use are entitled to request and obtain from us once a calendar year information about the customer information we shared, if any, with other businesses for their own direct marketing uses. If applicable, this information would include the categories of customer information and the names and addresses of those businesses with which we shared customer information for the immediately prior calendar year (e.g., requests made in 2015 will receive information regarding 2014 sharing activities). To obtain this information on behalf of FNF, please send an email message to privacy@fn£com with "Request for California Privacy Information" in the subject line and in the body of your message. We will provide the requested information to you at your email address in response. Please be aware that not all information sharing is covered by the "Shine the Light" requirements and only information on covered sharing will be included in our response. Additionally, because we may collect your Personal Information from time to time, California's Online Privacy Protection Act requires us to disclose how we respond to "do not track" requests and other similar mechanisms. Currently, our policy is that we do not recognize "do not track" requests from Internet browsers and similar devices. FNF Compliance with California Online Privacy Protection Act For some websites which FNF or one of its companies owns, such as the Customer CareNet ("CCN"), FNF is acting as a third party service provider to a mortgage loan servicer. In those instances, we may collect certain information on behalf of that mortgage loan servicer for fulfilling a service to that mortgage loan servicer. For example, you may access CCN to complete a transaction with your mortgage loan servicer. During this transaction, the information which we may collect on behalf of the mortgage loan servicer is as follows: • First and Last Name • Property Address • User Name • Password • Loan Number • Social Security Number - masked upon entry • Email Address • Three Security Questions and Answers • IP Address The information you submit is then transferred to your mortgage loan servicer by way of CCN. The mortgage loan servicer is responsible for taking action or making changes to any consumer information submitted through this website. For example, if you believe that your payment or user Privacy Notice Effective: May 1, 2015 information is incorrect, you must contact your mortgage loan servicer. CCN does not share consumer information with third parties, other than those with which the mortgage loan servicer has contracted to interface with the CCN application. All sections of the FNF Privacy Notice apply to your interaction with CCN, except for the sections titled Choices with Your Personal Information and Access and Correction. If you have questions regarding the choices you have with regard to your personal information or how to access or correct your personal information, you should contact your mortgage loan servicer. No Representations or Warranties By providing this Privacy Notice, Fidelity National Financial, Inc. does not make any representations or warranties whatsoever concerning any products or services provided to you by its majority-owned subsidiaries. In addition, you also expressly agree that your use of the Website is at your own risk. Any services provided to you by Fidelity National Financial, Inc. and/or the Website are provided "as is" and "as available" for your use, without representations or warranties of any kind, either express or implied, unless such warranties are legally incapable of exclusion. Fidelity National Financial, Inc. makes no representations or warranties that any services provided to you by it or the Website, or any services offered in connection with the Website are or will remain uninterrupted or error -free, that defects will be corrected, or that the web pages on or accessed through the Website, or the servers used in connection with the Website, are or will remain free from any viruses, worms, time bombs, drop dead devices, Trojan horses or other harmful components. Any liability of Fidelity National Financial, Inc. and your exclusive remedy with respect to the use of any product or service provided by Fidelity National Financial, Inc. including on or accessed through the Website, will be the re -performance of such service found to be inadequate. Your Consent To This Privacy Notice By submitting Personal Information to FNF, you consent to the collection and use of information by us as specified above or as we otherwise see fit, in compliance with this Privacy Notice, unless you inform us otherwise by means of the procedure identified below. If we decide to change this Privacy Notice, we will make an effort to post those changes on the Website. Each time we collect information from you following any amendment of this Privacy Notice will signify your assent to and acceptance of its revised terms for all previously collected information and information collected from you in the future. We may use comments, information or feedback that you may submit in any manner that we may choose without notice or compensation to you. If you have additional questions or comments, please let us know by sending your comments or requests to: Fidelity National Financial, Inc. 601 Riverside Avenue Jacksonville, Florida 32204 Attn: Chief Privacy Officer (888)934-3354 privacy@fn£com Copyright © 2015. Fidelity National Financial, Inc. All Rights Reserved. EFFECTIVE AS OF: MAY 1, 2015 25-377 N r1f) colv FA g W O z 25-378 SEAVIEW LUTHERAN PLAZA, INC. AUTHORIZING RESOLUTION At a duly constituted meeting of the Board of Directors of Seaview Lutheran Plaza, Inc., a California nonprofit public benefit corporation (the "Corporation") held on June 4, 2415, the following resolutions were adopted: WHEREAS, the Corporation is the owner of Seaview Lutheran Plaza (SLP), and seeks to maintain the long term affordability of SLP for low income seniors; WHEREAS, SLP is in need to various repairs and replacements for which there are insufficient funds in the project's Reserve for Replacement; WHEREAS, the City of Newport Beach has issued a Request for Proposal no. 15-55 for the development or preservation of affordable housing in the City; NOW, THEREFORE, BE IT RESOLVED, that the Chairperson and Vice Chairperson of the Corporation, acting alone, shall be authorized, empowered, and directed to execute and deliver all documents necessary to submit an Application to the City of Newport Beach in response to said Request for Proposal. SECRETARY'S CERTIFICATE I HEREBY CERTIFY that I am the duly elected and acting Secretary and keeper of the records of Seaview Lutheran Plaza, a California nonprofit public benefit corporation (the "Corporation"); that the Resolution does not conflict with the corporate charter or by-laws of the Corporation, nor has the Resolution been in any way altered, amended, or repealed, and that it is in full force and effect, unrevoked and unrescinded, as of this day, and has been entered upon the regular minute book of the Corporation, as of the aforementioned date, and that the Board of Directors of the Corporation has, and at the time of adoption of the Resolution, had full power and lawful authority to adopt the Resolution and to confer the powers thereby granted to the Chairperson and Vice Chairperson who has (have) full power and lawful authority to exercise the same. L� Secretary -1 Date 25-379 . 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W, , . 1. � . n � . I -1 .... . .,. ,,.,., , . , .., j, - . . , � % �,, -. , : � , , I . -?� , � % I , . : . , . . - I . � . . .: - I .. �. .... I - ". ��. � , - .,.,,�� -,.,�� �� - , : . . .. I � - , , : ., !. �-.�.,, , . I - ", � , '. , I r .l.. 1;1 . I I I.'.- - I A - I % I 11 : , �, � . : I ... ;., Ll . �,. I I . . . . . . , �� k. . . � . 26-380 .� . �,.� s . qfm �.. __ NOTE: Attachment C Seaview Lutheran Plaza Score Sheet 25-386 Attachment H Newport Shores Project Scope of Improvements and Architectural Renderings 25-387 newport shores 10.12.15 bettershelter 25-388 Newport Shores residential design enhancement package. A classic design approach that results in a timeless and contemporary aesthetic by utilizing simple sustainable materials. Create a new sense of community for future tenants to enjoy. Provide communal areas for gardening, relaxation and fun. Interact with local artists to create a local urban experience. A welcome addition to the existing Newport Beach landscape. bettershelter 25-389 Site Construction Site preparation & site demolition Resealing of parking lot Removal of asphalt for new planting wells Filling in of existing pool and removal of pool fencing Repair of broken/damaged flatwork as needed Demolition Remove all windows& frames Remove all exterior stucco and plywood soffit Removal of exterior light fixtures Remove roofs (subject to type of new roof) Removal of gutters Remove exterior dry rot Remove unit items including: All cabinets, vanities and countertops All exterior front doors & frames All windows & frames (included above) All interior doors and frames All interior door hardware All drywall cuts as needed for electrical upgrades All floor finishes — vinyl & carpet All window coverings All bathroom accessories All kitchen appliances including kitchen good All water heaters All plumbing fixtures All HVAC/heat systems All smoke detectors All exhaust fans All Electrical fixtures and outlet & switch covers Sanitary sewer Scope all main lines — repair as directed Asphalt pavement Slurry seal Stripelpaint Wheel stops all spaces Fencing & Gates New decorative fencing Pedestrian gates to adjacent open space Trash enclosure gates Site furnishinas To be selected Landscape & Irrigation All new landscape & irrigation including community garden Outdoor gathering space BBQ area Masonry Redesigned block wall alongside adjacent to open space Wood & Plastics Finish Carpentry — as required Architectural casework — interior trim Cabinets — all new at units Counters & Vanities — solid surface — all new at units Stairs — repairs where needed Wood decorative siding at fagade Thermal & Moisture Protection Insulation —existing to be examined, must meet energy requirements Waterproofing — weather barrier for any new siding Roofing —TPO or built up or foam Gutters, downspout & roof flashing Flashing — including any necessary wall caps Caulking and Sealant Sealing second floor decks Door & Windows Doors & frames — new front doors and frames New interior doors & jambs New sliding doors to balconies Windows —all new Hardware — all new Skylights — all new or remove Comply with City egress requirements Finishes Drywall - repair where necessary Siding Systems - wood decorative siding in select locations Ceiling — repair only where necessary, scrape acoustic ceilings Flooring - all new in units - resilient flooring or vinyl plank Painting — exterior - all Painting— interior — all Specialties Signage Monument sign/mural Building Signage — new throughout Bath Accessories — all new in units Fire Protection Specialties — exterior fire extinguishers Equipment Kitchen Equipment — range, micro hood, refer, dishwasher - all new in units Furnishings Window Coverings —all new in units Special Construction Hazardous Material Remediation — to comply with environmental survey Solar PV Panels — to be selected Laundry Room Upgrades — new flooring, drywall where needed, painting, light fixtures, venting, WID equipment Mechanical & Plumbing Plumbing Equipment — all new central hot water system Plumbing Fixtures —all new in units including garbage disposal HVAC Systems — new heating in all units Exhaust Fans - all new at bathrooms Electrical Electrical Equipment — new interior subpanels Electrical Finish — interior — new fixtures, outlets, and covers, as required New smoke detectors & carbon monoxide detectors Electrical Finish — exterior — new fixtures Security Access & Surveillance — camera system, FOB access to common areas New ceiling fans Framing convert one unit to be ADA accessible Seismic Retrofits to be applied per code bettershelt1g, newport shores aft existing condition - front view bettershelter 25-391 proposed design - front view newport shores bettershelter 25-392 new canvas awning and frame new skylights newport shores 4" pine wood planks; new pin mounted new fascia natural finish signage applied;painted Inew light fixture I I - - - 4 - r - new double pane windows 4" wood planks; painted 21 stucco; painted 4" pine wood planks; - natural finish at entry passion stucco; new light new metal fruit vine painted fixtures frame garage doors bettershelter 25-393 IL •� ' �` � f +-��'/�4-''_-�i:-i-;}� �,•� ,,y,t=�.'X'''ei tii'- r� r i4;� ...._ ..�.• �... ,.•`- � 1';� ,v`•'si,,r,, �' �: .t �,�;F-� } .• �' -r� .:jai �y�,� ^'��:c�—. Y�"t� {�. 'ti.44,,y, �:;' , ,: I '4�r 'r4' ; • rrf" — - -* : - � � . 4Y-1��3� '�` r. r: ',:� -- 1� � •- - - � '�: T'-'.h'._�' i�r F+` sY- Y4'." �7� .. ._ .Y ;.+ -.���� r+ t�!� 4 -H _ - ti• =�• rs��, ,�.r,��7� &. _ .� �'h � �'�: r � Y"i ,-itr,r, . �.►F' newport shores proposed design - back view bettershelter 25-395 newport shores replace existing railing stucco; painted new light fixtures update existing railing; paint 4 wood planks; painted Lilt_ - - - — _ - stucco; painted replant existing planters paint existing planters paint existing new light fixtures 4" pine wood planks; new slatted security gate block wall low impact natural finish bettershelter 25-396 newport shores existing condition - side view bettershelter 25-397 newport shores proposed design - side view bettershelter 25-398 W. newport shores new canvas awning and frame painted painted -111-11, .y -1-1 -z7-5 paint same as stucco passion fruit vine stucco; painted 4" pine wood planks; natural finish at entry 4" wood planks; painted bettershelter 25-399 Removal of asphalt for new planting wells — passion fruit vine Little John Bottlebrush Icee Blue Podocarpus super red aloe proposed site plan newport shores communal gardens california natives / drought tolerant plantings (all existing interior planters; all new raised planters) it mexican feather grass african aloe dwarf agave bettershelter 25-400 board formed raised concrete planters - communal gardening common area covered niche dining area proposed site plan existing planter V `1, newport shores existing raised existing existing planter I planter I planter I planter decorative I built-in I lounge area with tile bench awning -to match front decks exposed aggregate pathways - s a wood decking california natives / drought tolerant plantings (all bettershelter ex.planters) 25-401 newport shores proposed design vibe r � J proposed garage doors bettershelter 25-402 newport shores 0i PORT SHORES proposed signage and local artist application bettershelter 25-403 V proposed security gate newport shores proposed back wall design - wood slats above existing block wall II 1 I I � proposed bench and common area seating bettershelter 25-404 w W --4qw proposed plantings - native drought tolerant species newport shores conceptual common area design elements bettershelter 25-405 ;a Nk common area planters for communal gardening newport shores P common area speciality tile F -T common area niche dining area bettershelter 25-406 __p — M im. �mw-- AM 111 ti��flll��r UZ llt�il�tlr�flr���f1 �� ��I�IIIIIII��FI�lJIIfI `r�� ,� .I i a ` A ATTACHMENT I City of Newport Beach BUDGET AMENDMENT 2015-16 EFFECT ON BUDGETARY FUND BALANCE: Increase Revenue Estimates X Increase Expenditure Appropriations AND Transfer Budget Appropriations SOURCE: from existing budget appropriations from additional estimated revenues X from unappropriated fund balance EXPLANATION: NO. BA- 16BA-013 AMOUNT:$2,575,000.00 Increase in Budgetary Fund Balance X Decrease in Budgetary Fund Balance No effect on Budgetary Fund Balance This budget amendment is requested to provide for the following: To increase expenditure appropriations from the General Fund Affordable Housing Reserve to provide for two Affordable Housing projects: the Newport Shores project and the Senior Home Repair project. ACCOUNTING ENTRY: BUDGETARY FUND BALANCE Fund Object 010 330004 REVENUE ESTIMATES Org EXPENDITURE APPROPRIATIONS Amount Description Debit General Fund - Affordable Housing Reserve $2,575,000.00 Object Description Signed: Signed: Signed Financial Approval: Finance Administra`ttveJApproval: City Manager City Council Approval: City Clerk Automatic System Entry. Credit $1,975,000.00 $600,000.00 1I—o7 —/,5— Date Date Date 25-408 Description Org Number 010 General Fund Object Number 980000 CIP Project Number 16M14 Affordable Housing - Newport Shores Org Number 010 General Fund Object Number 980000 CIP Project Number 16M15 Affordable Housing - Senior Home Repair Signed: Signed: Signed Financial Approval: Finance Administra`ttveJApproval: City Manager City Council Approval: City Clerk Automatic System Entry. Credit $1,975,000.00 $600,000.00 1I—o7 —/,5— Date Date Date 25-408