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HomeMy WebLinkAbout2010-06-09 e-packetNTH bqN~, 50 ..,•,~; ~ , '~ -~- f-. ~, o cgLIFORt`~~' AGENDA REDEVELOPMENT AGENCY CITY OF SOUTH SAN FRANCISCO REGULAR MEETING MUNICIPAL SERVICES BUILDING COMMUNITY ROOM WEDNESDAY, JUNE 9, 2010 6:30 P.M. PEOPLE OF SOUTH SAN FRANCISCO You are invited to offer your suggestions. In order that you may know our method of conducting Agency business, we proceed as follow: The regular meeting of the Redevelopment Agency is held on the second Wednesday of each month at 6:30 p.m. in the Municipal Services Building, Community Room, 33 Arroyo Drive, South San Francisco, California. Public Comment: For those wishing to address the Board on any Agenda or non-Agendized item, please complete a Speaker Card located at the entrance to the Community Room and submit it to the Clerk. Please be sure to indicate the Agenda Item # you wish to address or the topic of your public comment. California law prevents Redevelopment Agency from taking action on any item not on the Agenda (except in emergency circumstances). Your question or problem may be referred to staff for investigation and/or action where appropriate or the matter may be placed on a future Agenda for more comprehensive action or a report. V:'hen your name is called, please come to the podium, state your name and address for the Minutes. COMMENTS ARE LIMITED TO THREE (3) MIhTUTES PER SPEAKER. Thank you for your cooperation. The Clerk will read successively the items of business appearing on the Agenda. As she completes reading an item, it will be ready for Board action. MARK N. ADDIEGO Chair KEVIN MULLIN Vice Chair RICHARD A. GARBARINO Boardmember RICHARD BATTAGLIA Investment Officer BARRY M. NAGEL Executive Director PEDRO GONZALEZ Boardmember KARYL MATSUMOTO Boardmember KRISTA MARTINELLI-CARSON Clerk STEVEN T. MATTAS Counsel PLEASE SILENCE CELL PHONES AND PAGERS HEARING ASSISTANCE EQUIPMENT IS AVAILABLE FOR USE BY THE HEARING-IMPAIRED AT REDEVELOPMENT AGENCY MEETINGS In accordance with California Government Code Section 54957.5, any writing or document that is a public record, relates to an open session agenda item, and is distributed less than 72 hours prior to a regular meeting will be made available for public inspection in the Ciry Clerk's Office located at Ciry Hall. If, however, the document or writing is not distributed until tl2e regular meeting to which it relates, then the document or writing will be made available to the public at the location of the meeting, as listed on this agenda. The address of Ciry Hall is 400 Grand Avenue, South San Francisco, California 94080. CALL TO ORDER ROLL CALL AGENDA REVIEW PUBLIC COMMENTS CONSENT CALENDAR Motion to approve the minutes of May 12, 2010 and May 26, 2010. 2. Motion to approve expense claims of June 9, 2010. 3. Resolution approving a contract and budget amendment with Dyett and Bhatia to prepare a Program EIR for El Camino Real/Chestnut Area Plan Project in the amount of $137,277. ADMINISTRATIVE BUSINESS 4. Resolution approving an Owner Participation and Loan Agreement with Giffra Enterprises, LLC, for the provision of a loan for the rehabilitation of the property located at 226-238 Grand Avenue, in an amount not to exceed $2.5 million, and authorizing the execution of all documents in connection with such financing. CLOSED SESSION 5. Pursuant to Government Code Section 54956.8 Real property negotiation related to 166 Harbor Road SSF. Company Negotiator: Caltrans Agency Negotiator: Marty Van Duyn. ADJOURNMENT REGULAR REDEVELOPMENT AGENCY MEETING JUNE 9, 2010 AGENDA PAGE 2 vTH SAN ~O a vi . ~!~ ~= ~`- o ~._ -~---.. _, n`~LI FOR~~P MINUTES I~~DEVELOPMENT AGENCY CITY O1~ SOUTH SAN 1-~F~ANCISCO REGULAR MEETING M~JNICIl'AL SERVICES BUILDING COMMUNITY ROOM WEDNESDAY, MAY 12, 2010 CALLED TO ORDER ROLL CALL AGENDA REVIEW No changes. 6:31 p.m. FTT~M # Present: Boardmembers Garbarino, Gonzalez and Matsumoto, Vice Chair Mullin, Chairman Addiego Absent: None PUBLIC COMMENTS None. CONSENT CALENDAR 1. Motion to approve the minutes of April 14, 2010. 2. Motion to accept the Emergency Operations Center/Training Classroom Project as complete in accordance with the plans and specifications. Motion - Boardmember Garbarino/Second - Boardmember Gonzalez: To approve the Consent Calendar. Unanimously approved b.y voice vote. ADMINISTRATIVE BUSINESS 3. Review Updated Financing Flan for Affordable Housing Project at 636 El Camino Real, Mid-Peninsula Housing Coalition, and Agency's Financial Participation. Housing and Community Development Consultant Armando Sanchez gave a brief overview of the project and the financial update and obstacles that have occurred. The initial development had experienced a change in scope and change in financial situation as a result of the current economic environment. Initially 80 units at $37 million, the project has now become 109 units with increased costs over $50 million. The City has given $5 million for land and development costs, and additional sources of funding included tax credits and grants. The change in the economic environment has caused a reduction and/or elimination of grants, resulting in a deficit of over $4 million., with tax credits included. The current situation has left the project $18 million in the hole since inception. IVIr. Sanchez included an article to illustrate that this situation was not unique and that many projec;ts have been cancelled or stalled. Mr. Sanchez hoped the Board would help keep the project going with an increase of funding and cautioned that steep subsidies would be the norm if further affordable housing developments were pursued in the future. Mr. Sanchez explained how, fortunately, Mid-Peninsula Housing Coalition has found success in securing close to $9 million in additional funding. This erased the decrease in grants; however, there remains a deficit of $10 million. Options discussed included returning land ownership to the Redevelopment Agency ("Agency"). This would defer $700,000 in development fees, the Agency could lease land to Mid-Peninsula for 99 years and have a master lease for commercial space. An additional $10 million was requested from the Agency. Mr. Sanchez noted all other sources, with exception of the state grant, had been committed to the project. He also noted there were several opportunities to apply f:or the grant should it not be awarded the first time around and they were hopeful in regards to ithe tax credit because of the scope of project. The agreement and financial assistance could be terminated ifMid-Peninsula was unable to secure funding. Boardmember Matsumoto asked why the land was not credited as part of the Agency's contribution and sought clarification. as to its value. Mr. Sanchez stated the value of the land was between $4.5 to 5 million and that it was not being credited to show what was being lent to the project. Boardmember Garbarino noted the recent court ruling allowing the state to take Agency funds and was unsure of what would be left. Chairman Addiego stated perhaps that was the best argument for spending it. Mr. Sanchez agreed and noted committed funds could not be taken. Chairman Addiego sought clarification that with the new numbers it worked out to $500,000 per unit. He was unsure about committing due to this estimation and noted the Agency could purchase existing units for a much lower price. Jan Lindenthal, Vice President of Real Estate Development for Mid Peninsula, agreed the total development was around $500,000 per unit and listed the factors contributing to the cost, which included: more density, parking underground, and being unable to underwrite the income for the rental commercial space, though the expected rental would give 100% revenue back to City over the long term through a master lease;. She also agreed that while existing units could be purchased, they would not have the lifespan of the new development nor the high quality. Standards were set high and even though it would be affordable housing, it would not be cheap to build. Vice Chairman Mullin asked Ms. Lindenthal to explain why density equaled greater expense. He also requested an explanation as to why a greater Agency contribution was beneficial in terms of making the project more competitive for tax credit and other types of funding. REGULAR REDEVELOPMENT AGENCY MEETING MAY 12, 2010 MINUTES PAGE 2 Ms. Lindenthal explained the concrete box to accommodate parking and stability was extremely expensive to engineer as it had to be the foundation as well as be suitable for parking. When you get to five (5) floors, the cost is more per square foot. Ms. Lindenthal noted a decline of 35% in what tax credit investors are willing to pay compared to the previous year. At the same time, the competitiveness became more inten~;e as there vas only enough money in this region to finance 140 units per year. Mid-Peninsula scored information gathered from other projects to determine what was needed to maximize competitiveness, which drove up the City's subsidy. The score relied heavily on the credit requested. Vice Chairman Mullin asked what the main factor was for the inadequate tax credit- the state budget situation or the overall economic climate. Ms. Lindenthal stated it was both. The value of the tax credit continues to drop and the state has had difficulty issuing bonds under Proposition 1C. Mid Peninsula intended to apply for the bonds, which would reduce the City's contribution. With the state situation as it was, there was no way to bring forth another bond clue to the economic climate. A positive was the county stepped up to partner with the City, helping provide funding for 20 units for special needs residents as well as Section 8 rental assistance. Ms Lindenthal noted City staff's work as advocates. Boardmember Matsumoto requested clarification as to whether special needs meant wheelchair bound. Ms. Lindenthal clarified the meaning as such and noted in addition, all units would be fully adaptable. Boardmember Gonzalez found the expenses difficult but liked the project. He noted feeling rushed during the approval of the land purchase and felt the same about this but understood this presentation was for provision of information. Mr. Sanchez went trirough the next steps as being the presentation to the Planning Commission on June 3, followed by the presentation of the complex project to the Agency on June 23, 2010 assuming Planning Commission approval. Chairman Addiego noted a time frame of approximately 1 month to review and determine the best direction for the project. ADJOURNMENT Being no further business, Chairman Addiego adjourned the meeting at 6:59 p.m. Submitted: Anna M. Brown, Deputy Clerk City of South San Francisco Approved: Mark Addiego, Chairman City of South San Francisco REGULAR REDEVELOPMENT AGENCY MEETING MINUTES MAY 12, 2010 PAGE 3 ~zK sA,l,~ o H ~ n J ~ c'~LIFOR~~~ 11~IIl~TIJTES ~T REDEVELOPMENT AGENCY czTY C-r soUTrl sAN rRANCL~co ~~ CITY CO UNCIL CI~1~Y C-r SOt1r1~H SAN I'R1INCISCO ST'tECIA.L JQINT MEETING MUNICIPAL SERVICES BUILDING COMMUNITY ROOM V~%'EDNE,SDAY, MAY 2G, 2010 CALLED TO ORDER: 7:00 p.m. ROLL CALL: Present: Boardmembers/Councilmembers Garbarino, Gonzalez and Matsumoto, Vice Ch~unnan/Vice Mayor Mullin a11d Churmui/Mayor Addiego. Absenit: None. Recess: 7:01 p.m. Meeting Resumed: 9:18 p.m. 1. Agenda Review. None. 2. Public Comments - coin~~~eizls are li»zited to iter~~s on the Special Meeting Agenda. None. 3. Resolution of the City Council and Redevelopment Agency approving an appropriation by the Redevelopment Agency and authorizing the City Manager to execute legal documents for the termination of the City's obligation related to the California Health Facilities Financing Authority Revenue Bonds of 1986. Motion- Boardmember/Councilwoman Matsumoto/Second-Boardmember/Councilman Garbarino: to approve City Council Resolution No. 47-2010 and Redevelopment Agency Resolution No. 7-2010. Unanimously approved by voice vote. 4. Adjourned. Being no further business, Chairinat~/Mayor Addiego adjourned the meeting at 9:21 p.m. ~,Su- itt by: . .~--.°``~~--- l ~Kri -tinelli-L~-son, Ciry Clerlc of Sot i San Francisco CI~=1~ edevelopment Agency Approved: Mal-k N. Addiego, Mayor City of South San Francisco Chairman, Redevelopment Agency Listing of RDA Payments for Council Review ~zK s~ O ~ ~ ~ V O c~LIFOR~~~ certify that the payments shown on this payment register are accurate and sufficient funds were avaiiablE~ for payment.* DATED C2~~~~ n _ ~. - ~INANCE DIRECTOR *Note: Items below do not include payroll related payments Checks: Date 04/09/10 04/14/10 04/15/10 04/16/10 04/23/10 04/27/10 04/30/10 05/05/10 05/07/10 05/12/10 05!14/10 05/19/10 05/26/10 05/28/10 06/02/10 Electronic Payments: Date 05/19/10 Total Payments $ Amount 12,150.00 19,850.43 4,340.00 3,000.00 6,705.00 37,863.63 46,687.13 41,369.60 77,806.01 12,614.21 27,878.68 14,311.65 13,440.71 10,194.46 1,880.99 Amount To 926.60 Deutsche Bank RDA A GENDA ITEM # 2 Description Magnolia Center Debt Service 331,019.10 :~ ti 0 r a~ c~ 1 V 9 C O a a~ a> .~ ~o ~~ 0 ~ N (~ N O ~ to ~ >-. ~ o ~ ~ ~' a~ o U p) ~ ~Qo ~ .,_, N C ~ ~ ~ C ~ ~t ~ O ~ ~ ~ ~ > .,~ to ~ ~ '*- ~ "~ o~ ~ o ~ ~.- ~ U ~~ ~ ~ ~~ J ~ a..+ i ~ ~ Q) ~ a- a c~ a Y U W 2 U ~# W U O Z z 0 H _a U W W U_ O Z I- Z O Q W U_ O z W Q o Z T ~y N O O Z ~ W o > o_ _~ M c~ ~~ M c''7 T r O rn ~ ~ C7 Z U O_ J O F- 0 ~ ~ W Q ~ ~ ~ ~ ~ ~ W U ~ > J ~ O c~ ~~ Q O Z ~ D d o° °o °o °o ~- o ." ~` ~ ~ N N F !~ F- a w 0 z w a O W w ~ ~ z Z ~ w O w C~ U J Q ~S F= Q U o2S ~ g w Q o Z ~ U Q W ~ Z C uJ U ~ J p, Z (Y] ~ O ~ tia ZW ~ ~ ~ ~ ~W O~ U~ ~a o U~ W Z~ O W i a d 3 N N d cts a 0 0 N 0 a c a~ L M r 0 N a~ s~ co W 0 0 N O O C 0 a~ c .~ ~o 0 ~ N O N m ~ >. ~ c o ~ ~ .U ~ O ~ ~ N C ~ ~ ~ Q C ~ O ~ ~ ~ o~a~ ~ ~~ o~ ~ .~o~ „- cn U ~~ C N ~_ ~ J ~ ~ ~ ~ >, N ~ E ~ c~ a Y U W U W U Z Z O a U W O W U O z t- Z Q W U_ O z W Q o Z r ~y N O Z W o ~ d' d' O M li7 07 ~ ~ '~ '~7' '~ ~ ~ O N d' M M M ~' ~ ~ CD f~ !~ I~ ti ti t` 00 CO M M M M M M M M M M C+7 M M M M M M M M M M M M M M M M M M M M M M r r r r r r r r r 'r r r r r r r ti 00 r M r N 0 `Cr' r- M w 0 Q' ~ ~ ~ O~ Lfl ti U r 0 ~ r 07 M O N M M M N M N O M M CO to ~' t~ d' CO CO CO CD Cfl CO ~ 00 ~_ N N ONO M O~ ~ N N N N N N Z O N W U_ t:~ > W ~ U_ W w wwcnw > U W U_ _U W U ~ W > U > > C7 > U ~ ~ ~ ~ ~ Q ~ ~ w > w cwn w ~ cwn ~ ~ U ~ B U J to W W Q W W Q > ~ ~ w O C~ O C~ ~ cn J Z U W CA J~ U W Z Q CD m Q m~ O ~ U ~ a, W Z Cn W m ~ ~ (~ ~ J (- ~ >.Q n- ~ z Z p~ Q Q~ Q Q Q W~ Z~ O w O W U .J J~ J~~ Z J cn W w Z z v~ c~ g Q~ Q E- ~ C? 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Sta Re cart .f .f '~LrFOR~l~ l'" DATE: June 9, 2010 TO: Redevelopment Agency Board FROM: Marty Van Duyn, Assistant Executive Director SUBJECT: A RESOLUTION AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE A CONTRACT AMENDMENT WITH DYETT & BHATIA URBAN AND REGIONAL PLANNERS TO PREPARE THE DRAFT AND FINAL ENVIRONMENTAL IMPACT REPORT FOR EL CAM1N0 REAL/CHESTNUT AVENUE AREA PLAN IN AN AMOUNT NOT TO EXCEED $137,277. RECOMMENDATION It is recommended that the Redevelopment Agency of South San Francisco approve a resolution authorizing the Executive Director of the Redevelopment Agency to execute a contract amendment with Dyett & Bhatia Urban and Regional Planners for preparation of the Draft and Final Environmental Impact Report for the El Camino ReaUChestnut Avenue Area Plan, in an amount not to exceed $137,277. BACKGROUND/DISCUSSION In January 2010, the Redevelopment Agency Board authorized the Executive Director to execute a contract with Dyett & Bhatia to preparc; the El Camino Real/Chestnut Avenue Area Plan. The consultant team also includes "Field Paoli, Architects and Urban Designers" to help prepare the key design themes in the Plan area. Building on the collaborative process, the consultant team has prepared the Draft Preliminary Concepts and Guiding Principles for the El Camino Real/Chestnut Area Plan. The Draft Plan includes the "Guiding Principles" that would define the type and intensity of development and draft illustrative concepts, showing land use., building heights, street and pedestrian connections, and parking strategies. At the May 20, 2010 Planning Commission Study Session, the consultant team presented the Draft Preliminary Concepts and Guiding Principles for the EI Camino Real/Chestnut Area Plan and received comments from the Planning Commission. The Commission also discussed long-term development opportunities and potential land use options along the EI Camino Real Corridor. The Commission was supportive of the consultants approach. to development uses, open space, streetscapes, densities, and development standards. The Commission instructed the consultant to move forward and prepare the Preferred Plan for public review. As part of the Scope of Work, the consultant team also prepared an Initial Study checklist to determine the proposed project's potential impacts and the level of environmental review for the California Environmental Quality Act's (CEQA) compliance. The consultant found that the proposed project Staff Report Subject: Contract Amendment with D~yett &Bhatia, Urban and Regional Planners for preparation of the Program EIR for the El Camino Real,/Chestnut Avenue Area Plan. Date: June 9, 2010 Page 2 would result in a greater intensity and level of development than was contemplated in any previous environmental document. The older documents, such as the El Camino Real Redevelopment Area Amendment Environmental Impact Report (EIR) in 2000, cannot be safely used to access cumulative impacts. The checklist identified potential significant impacts for Air Quality, Traffic, and Mandatory Findings of Significance. Therefore, tihe consultant is recommending that the City prepare a "Program" level EIR. The consultant believes that: the Program EIR approach will be the safest and least expensive approach to the environmental review. The consultant will be able to incorporate information from multiple sources, chiefly from the South El Camino Real Amendment EIR, where potentially significant impacts are discussed in depth. Likewise; the Program EIR will allow future projects to tier off of it in an easier manner. FUNDING Sufficient Redevelopment Bond funds were budgeted to cover the costs of the EI Camino Real/Chestnut Avenue Area Plan preparation. CONCLUSION Approval of this contract amendment with Dyett &Bhatia will allow the timely completion of this planning project and assure CEQA compliance. By: ~/~----- Approv d: Marty Van Duyn arry M. Nag Assistant Executive Director Executive Directo Attachments: 1. Resolution 2. Contract Amendment with Exhibits MVD:ML RESOLUTION NO. REDEVELOPMENT AGENCY BOARD, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION AUTHORIZING A CONTRACT AMENDMENT WITH DYETT & BHATIA, URBAN AND REGIONAL PLANNERS TO PREPARE THE PROGRAM ENVIRONMENTAL IMPACT REPORT FOR THE EL CAMINO REAL/CHESTNUT AVENUE AREA PLAN. WHEREAS, following preparation of an Initial Study checklist, staff recommends that Dyett &Bhatia, Urban & Regional Planners prepare the Program Environmental Impact Report (EIR) for El Camino Real/Chestnut Avenue Area Plan. NOW, THEREFORE, BE IT RESOLVED by the Redevelopment Agency Board of the City of South San Francisco as follows: 1. The Executive Director is hereby authorized to prepare and execute a contract amendment, in a form substantially similar to that attached to this Resolution, with Dyett & Bhatia, Urban and Regional Planners in an amount not to exceed $137,277.00, for preparation of the Program EIR for the El Camino Real/Chestnut Avenue Area Plan. I hereby certify that the foregc-ing Resolution was regularly introduced and adopted by the City Council of the City of South San Francisco at a public meeting held on the 9'~' day of June; 2010 by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: City Clerk l 459029.1 AUTHIJRIZATION OF PAYMENT IN ADDITION TO CONTRACT AMOUNT FOR DYETT & BHATIA., URBAN AND REGIONAL PLANNERS WHEREAS, the South San Francisco Redevelopment Agency (RDA) and CONSULTANT have entered into an Agreement dated January 17, 2010 whereby CONSULTANT will prepare the EI Camino Real/Chestnut Area Plan project; and, WHEREAS, the South San Francisco Redevelopment Agency is authorized to pay CONSULTANT a total of Two Hundred Ninety-One, Seven Hundred and Forty-One dollars ($291,741.00.) for said services; and, WHEREAS, in order to provide payment for this Amendment, that is not included in the original scope of services and explained in Attachment 1 Program EIR Scope of Work, CONSULTANT requests additional payment in the amount of One Hundred and Thirty-Seven, Two Hundred and Seventy-Seven dollars ($137,277.00); and, WHEREAS, pursuant to the ~-greement and South San Francisco Redevelopment Agency Resolution No. ,the >=;xecutive Director is authorized to provide payment in excess of that stated in the original scope of work and budget for additional services performed. NOW THEREFORE, in accordance with the terms set forth in the Agreement, the Executive Director hereby authorizes an additional payment of One Hundred and Thirty-Seven, Two Hundred and Seventy-Seven dollars ($137,277.00) to be made to CONSULTANT. CONSULTANT agrees this will be the South San Francisco Redevelopment Agency's total contribution for payment of additional costs and/or services under the Amendment unless additional payments are authorized in accordance with the terms of the Agreement and said terms of payment are mutually agreed. to by and between the parties. All other terms, conditions and provisions in the Agreement remain in full force and effect. If there is a conflict between the terms of this Amendment and the Agreement, the terms of the Agreement will control unless specifically modified by this Amendment. Dated: By: CONSULTANT Approved as to Form: By: By: Barry M. Nagel, City Manager Steven T. Mattas; City Attorney ATTACHMENT 1 Draft Program Environmental Impact Report TASK !: DRAFT PRC3GRAM ENYIRUNMENTAL IMPACT REPC3RT Objective: D&B will prepare a programmatic em~ironmental impact assessment of the Area Plan, pursuant to the California Environmental Quality Act (CEQA). A. Conduct a Scoping Meetin€; (D&B). D&B will conduct one scoping meeting and prepare handouts that describe the general environmental process. The focus of the scoping meeting will be to solicit the involvement of responsible agencies, the community at-large, and local business organizations. It is assumed that the scoping meeting will be conducted durling the middle of the review period of the NOP. B. Develop Thresholds/Signifie,ance Criteria (D&B; Team). Development of criteria against which impacts will be evaluated (and ultimately designed) lies at the crux of a Program EIR such as this. Using the thresholds in the 1999 General Plan EIR and those used more recently in the South E) Camino Real General Plan Amendment EIR as a starting point, we will work closely with City staff to update the thresholds for evaluation of environmental impacts. While the overall goal will be to stay with the same thresholds, some changes will be necessary to comply with new legislation and recommendations. The City's involvement in the determination and approval of thresholds is important when considering the level of significance for impacts associated with the proposed Area Plan. The Program EIR will utilize the approved thresholds of significance to identify both the direct and indirect impacts of the proposed E1 Camino Real/ Chestnut Area Plan. It is intended that these thresholds of significance will be used to ensure that all future devellopment projects do not generate adverse environmental impacts as defined by CEQA or the City of South San Francisco. C. Prepare Administrative Draft Program EIR (D&B, with Team input). Based on materials provided by the City and responses to the NOP, D&B will prepare an Administrative Draft Program :EIR. The Administrative Draft Program EIR will include the following sections: • Table of Contents • Introduction • Summary of Impacts and Mitigation Measures • Project Description (project objectives, project location, project characteristics, scope of project, and required approvals) • Environmental Analysis for each identified issue area. - Environmental Setting - Regulatory Framework (applicable federal, State, and local plans, policies, and standards) - Environmental Impacts (short-term, long-term, direct, and indirect impacts, as well as cumulative impacts) - Policies that reduce potential impacts - Mitigation Measures (for potentially significant environmental issues) • Project Alternatives • CEQA Required Conclusions (including growth-inducing, significant unavoidab]e, and significant irreversible environmental impacts) • Organizations and Person;> Consulted/List of EIR Preparers • References • Technical Appendices (including all studies, detailed data, NOP, and NOP comments) The list of environmental issue areas outlined below is based on preliminary information, as well as our intimate knowledge of environmental issues that face South San Francisco. The D&B team intends to rely upon the information provided in all previously-prepared environmental documents to the maximum extent practicable for all environmental issues areas addressed in the Program EIR. Key topics of environmental analysis will include: • Traffic, Circulation, and Parking (KHA). Assess transportation impacts of the E1 Camino Real/ Chestnut .Area. Plan. This analysis will include: a discussion of existing conditions; provide an overview of applicable policies and guidelines regarding traffic and circulation; and analysis of impacts related to incremental growth associated with the EI Camino Real/Chestnut Area Plan for all modes of traffic including automobiles, transit, bicyclists, pedestrians, and parking. The transportation analysis will build upon previous enviromnental documents prepared for the area. It will study up to fifteen (l5) intersections using available traffic counts from previous reports for the AM and PM peak hours (E1 Camino Corridor Redevelopment Plan Amendment and TOD Village EIRs). No new traffic data collection is included in this scope. New traffic counts (AM and PM peak periods) can be conducted as an optional task. Intersection analysis will be conducted using the operations method of the 2000 Highway Capacity Manual and TRAFFIX software. Existing signal timing plans will be requested from the City and Caltrans. The traffic study will include the following: A synopsis of the Existing Condition report prepared in 2008; - An analysis of 2030 with Existing General Plan (the No Project Alternative). This analysis will use plots of forecasted traffic from the San Mateo City/County Association of Governments (C/CAG) travel demand forecasting model to derive growth factors. Growth factors will be applied to existing traffic volumes at the study intersections to reflect 2030 No Project volumes. This scenario will include any planned and programmed transportation improvements. - An analysis of 2030 with E1 Camino Real/ Chestnut Area. Plan (Project Alternative). All areas outside of the plan area will remain consistent with C/CAG land use assumptions. This analysis will forecast changes in existing travel patterns with the extension of Oak Avenue to E) Camino Real. KHA will prepare a trip generation analysis of the land uses allowed under the General Plan and the preferred land use alternative applying appropriate trip reductions from the City's TDM Program and the mixed-use nature of future development under the E1 Camino Real/ Chestnut Area Plan. The incremental difference in traffic between the General Plan land uses and the preferred alternative of the Area Plan will be assiigned to the 2030 No Project scenario traffic volumes to represent Project condiitions. - The traffic analysis wi l produce AM and PM peak hour average stopped delay and level of service for the study intersections. Level of service will be compared to standards of significance to identify potentially significant impacts. Signalization warrants (PM peak hour) will be applied to unsignalized intersections. For significantly impacted intersections, KHA will identify feasible physical mitigation measures and/or further Transportation Demand Management measures to mitigate impacts. - KHA will conduct a qualitative impact assessment of pedestrian, bicycle, and transit modes of transportation emphasizing adequate facilities for new development to access transportation facilities and other services. KNA will also summarize the parking supply and demand analysis and identify potentially significant impacts related to parking for the Project. Aesthetics and Visual Resources (D&B). Assess visual resource and aesthetic impacts of the E1 Camino Real/Chestnut Area Plan. The assessment will include: a discussion of existing visual resources; an overview of applicable policies and guidelines regarding visuial resources; discussion of the methods, terms, and thresholds for significance;, potential aesthetic and visual character changes that may result from implementation of the E1 Camino Real/Chestnut Area Plan, and potential increased light or glare that may result from implementation of the E1 Camino Real/Chestnut Area Plan. Any identified mitigation measures will be integrated into the E1 Camino Real/Chestnut Area Plan as policies, except where infeasible. Land Use and Housing lD&B). Assess land use and housing impacts of the EI Camino Real/Chestnut Area Plan. Land use and housing changes, which impact population and employment growth, are the direct or indirect basis for many of the physical environmental impacts analyzed in an EIR, as well as the basis for some socioeconomic areas of analysis, such as housing demand and jobs/housing balance. This section will establish ~ the scope of geographic impact for both direct and indirect impacts. Baseline housing information may include the number of households in the area and citywide, the average number of persons per household, and key housing characteristics. Analysis will consider potential changes in land uses that could divide established communities, displace existing housing or population therefore requiring the construction of replacement housing elsewhere, or conflict with existing plans. Any identified mitigation measures will be integrated into the El Camino Real/Chestnut Area Plan as policies, except where infeasible. Impacts due to population aind employment growth will be further evaluated in CEQA Required Conclusions: Growth Inducing impacts. • Parks and Recreation (D~~B). Assess potential impacts to parks and recreation as a result of the implementation of the E1 Camino Real/Chestnut Area Plan. Evaluate how the ratio of population to recreation space and facilities may change as a result of the E1 Camino Real/Chestnut Area Plan, using established General Plan standards, and whether those changes could result in environmental impacts. Emphasis on increased trail use for instance, while beneficial to recreation, could have adverse side effects such as erosion and water quality impacts. Any identified mitigation measures will lbe integrated into the E1 Camino Real/Chestnut Area Plan as policies, except where infeasible. • Noise (CS&A). Assess the potential for increased exposure to noise or vibration as a result of the implementation of the E1 Camino Real/Chestnut Area Plan, over the short term and long term. Develop future noise contours based on traffic data prepared by KHA for the EIR. Describe the types of noise sources that would be associated with development under the El Camino Real/Chestnut Area Plan, determine if any noise increases from the existing condition would be noticeable, and qualitatively discuss overall noise impacts. Any identified mitigation measures will be integrated into thc; EI Camino Real/Chestnut Area Plan as policies, except where infeasible. • Biological Resources (D&B). Assess the potential for impacts to special status species and potential confllict with local policies and ordinances, as a result of the E1 Camino Real/Chestnut Area Plan. Provide a description of existing conditions and regulatory framework. Any identified mitigation measures will be integrated into the EI Camino Real/Chestnut Area Plan as policies, except where infeasible. • Hazardous Materials and Tonics (D&B). Assess potential impacts related to hazardous materials and toxics as a result of implementation of the E1 Camino Real/Chestnut Area Plan. The assessment will discuss existing conditions; provide an overview of applicable policies and guidelines; and discuss and evaluate potential impacts of implementation of the E1 Camino Real/Chestnut Area Plan, including: impacts on general public health and safety; the potential for new development or redevelopment to result iri areas where there are public safety issues or hazardous materials; potential safety hazards related to nearby airport or airstrip; and potential conflicts with emergency response plan or emergency evacuation plan. In the event that the Plan or the regulatory requirements might result in a potential adverse environmental risk, identify mitigation measures to reduce potential health and safety impacts to less than significant levels. Any identified mitigation measures will be integrated into the EI C'amino Real/Chestnut Area Plan as policies, except where infeasible. Hydrology and Flooding (D&B). Assess potential impacts related to hydrology and flooding as a result of impplementation of the EI Camino Real/Chestnut Area Plan. Provide a description of e;~isting conditions and regulatory framework, in particular NPDES permitting requirements and Regional Water Quality Control Board requirements. Assess whether E1 Camino Real/Chestnut Area Plan implementation would potentially: violate water quality standards or waste discharge requirements; deplete or interfere substantially with groundwater, alter drainage patterns or cause erosion or siltation effecta; increase polluted runoff or exceed drainage system capacity; or result in flood or tsunami hazard. Any identified mitigation measures will be integrated into the El Camino Real/Chestnut Area Plan as policies, except where infeasible. • Geology, Soils, and Seismicity (D&B). Assess the potential for increased exposure to seismic or geologic hazards as a result of the implementation of the El Camino Real/Chestnut Area Plan. Characterize the general nature of the geological hazards and conditions, relevant regulations, and discuss how these issues may be affected by development at El Camino Real/Chestnut Area Plan buildout. Public Services and Utilities (D&B; KHA). Assess potential impacts to public services and utilities as a result of the implementation of the E1 Camino Real/Chestnut Area. Plan. Existing facilities and levels of service for each of the following systems and services will be inventoried, along with potential changes in demand as a result of the E;1 Camino Real/Chestnut Area Plan: police protection, fire protection, water supply, wastewater, solid waste, electric and gas utilities, and schools. Regulatory issue<.; that are pertinent to these services will be described. ]nformation will be summarized from the City's existing documents and supplemented as necessary through discussions with service providers to describe the existing conditions and levels of service. The information solicited from service providers will include current levels of demand and supply, any standards (including level of service standards) that the provider may use to project future demand, and planned physical improvements to the service systems. Any additional infrastructure needed to accommodate the E1 Camino Real/Chestnut Area Plan will be identified. Any identified mitigation measures will be integrated into the E1 Camino Real/Chestnut Area Plan as policies, except where infeasible. For water supply, because the number of housing units projected exceeds 500 units, a water supply assessment pursuant to State Bill 610 is needed. However, an existing urban water supply manageanent plan can suffice, and D&B will use the 2006 Urban Water Management Plan (t)WMP) developed by California Water Service Company, and ensure that adequate water supply is available to meet supply needs associated with the E1 Camino Real/Chestnut Area Plan. This scope assumes that adequate water supply is currently available through and shown in California Water Service Company's UWMP, and does not include evaluation of current and future sources of water, their anticipated sufficiency, or environmental impacts associated with additional draw from these sources. • Air Quality (D&B). Assess potential impacts to air quality as a result of the implementation of the E1 Camino Real/Chestnut Area Plan. Describe the types of emissions sources that would be associated with development under the E1 Camino Real/Chestnut Area Plan. ,Assess the consistency of the E1 Camino Real/Chestnut Area Plan with the regional Clean Air Plan with reference to population and employment forecasts as well as trends in vehicle miles traveled (VMT). Qualitatively assess the capability of policies in the EI Camino Real/Chestnut Area Plan to limit expose of sensitive receptors to substantial pollutant concentrations and prevent exposure of persons to substantial sources of construction dust, toxic air contaminants or odorous emissions. Thresholds of significance will be discussed and defined, based on BAAQMD standards. Any identified mitigation measures will be integrated into the EI Camino Real/Chestnut Area Plan as policies, except where infeasible. • Energy (D&B). Describe the types of energy that would be consumed by development under the E1 C'amino Real/Chestnut Area Plan. Identify applicable state and local goals, policies and standards related to energy conservation, and assess the consistency of the E1 Cannino Real/Chestnut Area Plan with state and national energy goals and programs. Estimate the per capita energy that would be consumed under E1 Camino Real/Chestnut Area Plan, including increase in consumption of electricity and natural gas based on population growth, and the increase in the projected transportation energy use. Proposed fuel efficiency measures will be considered. Any identified mitigation measures will be integrated into the E1 Camino Real/Chestnut Area Plan as policies, except where infeasible. Climate Change (D&B).. Assess potential impacts to greenhouse gas emissions and climate change as a result of the implementation of the EI Camino Real/Chestnut Area Plan. Taken by themselves, the greenhouse gas (GHG) emissions associated with the El Camino Real/Chestnut Area Plan will not induce climate change. Accordingly, by itself, the E1 Camino Real/Chestnut Area Plan will not have a significant effect on climate. However, the basic character of climate change is as a cumulative impact. Therefore, D&B will analyze impacts associated with GHG emissions from the E1 (:amino Real/Chestnut Area Plan as contributions to the impact associated with cumulative global emissions. We will discuss the current state of GHG emissions, based on available information from the California Energy Commission, Climate Action Team, and other sources. This section will include a description of existing emissions and the relevant regulatory setting. D&B will develop GHG emissions estimates and projections for the existing condition, a No Project condition, a 2030 business-as-usual future condition, and a 2030 with State Mandates future condition. These estimates will be based on a combination of residential, commercial/ industrial, transportation, and waste emissions. D&B will recommend mitigation measures to reduce the contribution to GHG emissions, suitable for incorporation into the E1 Camino Real/Chestnut Area Plan as policies. Alternatives (D&B; Team). Up to three (3) program alternatives, including the No Project Alternative, will be analyzed in the DEIR. These alternatives will be developed and analyzed at a level of detail allowing comparison with the proposed E1 Camino Real/Chestnut Area Plan, but not at an equal level of detail to the proposed project. The EIR will also discuss those alternatives to the project that were considered for analysis, but rejected, and the reasons for rejection. The alten~ative analysis will identify all alternatives considered, including those suggested in public and agency comment during the scoping process. Each alternative will be evaluated in terms of the issue areas described above, with differences in impacts between the alternatives and the proposed E1 Camino Real/Chestnut Area Plan highlighted. The analysis of alternatives includes a quantitative comparison of daily, AM and PM peak hour trip generation and a qualitative assessment of whether the alternatives would result in less than, greater than, or equal impacts of the Project. D. Prepare Public Review Dral't EIR/Notice of Completion (D&B). Following receipt of the City's comments on the administrative draft EIR, D&B will meet with City staff to review all final comments and determine an approach to final changes. Following this meeting, D&B will prepare the draft EIR, incorporating changes in response to the City's comments. D&B will also prepare the Notice of Completion for transmittal to the State Clearinghouse with the Public Review Draft EIR. D&B will prepare and submit one copy of a screencheck draft EIR for fatal flaw review by City staff. Following any final changes, D&B will produce the distribution Draft EIR, and provide the City with one hard copy. D&B will also provide the City with a CD with full electronic files. Additionally, D&B will provide fifteen (15) CDs with PDF files, and the Notice of Completion to the State Clearinghouse. Meeting: Scoping Meeting Product: Draft EIR TASK. 7: PUBLIC REVIEW; FihIAL EtR Objective: Participate in public hearings, and prepare the Final EIR. A. Adoption Hearings (D&B). Planning Commission and City Council must consider adoption of the new Area Plan in public hearings and certify the environmental document following the public; review period. We will closely coordinate with City staff prior to the hearings to ensure that our presentations respond to specific questions and issues likely to be encountered during the hearings. Our budget includes attendance at one Planning Commission and one City Council hearing. B. Prepare Final EIR (Optional; D&B/KHA). A Final EIR will be prepared for the Area Plan. It will contain a list of commentators, comment letters, and responses to comments on the Draft E1R. Any changes to the Draft EIR text will be marked with strikeout/underline formatting to show revisions in response to comments until the Final EIR is adopted with the certified language. Responses that are within 1:his proposal's scope of work and budget consist of explanations, elaborations, or clarifications of the data contained in the Draft EIR. If new analysis, issues, alternatives, or substantial project changes need to be addressed, or if the effort exceeds the budgeted amount because of the number or complexity of responses, a contract amendmf;nt may be required. C. Prepare Mitigation Monitoring and Reporting Program (Optional, and only if needed; D&B). To the extent any mitigations are appropriate, we will attempt to identify additional General Plan policies that will serve as mitigation, to avoid the need for added-on mitigation. Thus, it is highly unlikely that additional mitigation or a Mitigation Monitoring and Reporting Program, as required under Section 2 ] 081.6 of the California Public Resources Code, will be needed. if this is deemed necessary, D&B will provide a scope and budget to the City for this optional task. D. Findings of Fact and Statement of Overriding Considerations (Optional; D&B). We assume that City staff will prepare these. D&B can provide this as an optional task if so desired. Meetings: Planning Commission Hearings (2) City Council Hearing Product: Final EIR (optional) t) l' } `l:' 7- ~; 13 ! 1 /~'l' 1 ~1 Scope o f Work for EI Camino Real/Chestnut Area Plon ._ ,. , _ ,a, _ ! 7 Budget We propose a base budget of $42.9,018. This includes all items in the scope of work and all members of the consultant team, and includes all personnel and direct costs, and an allowance of $5,000 for report printing. One optional task (zoning) is also shown, for a cost of $22,000. The total cost for base and all optional tasks is $451,018. Budget for EI Camino Real/Chestnut Specific Plan base Tasks 7~S{'. < TI)$i~ ! (C!ih 7 ~: T.^.SF" iOS'Y.. C - :.i ' ~ Suh:rr,.,.,. riannc~p Reide~+.:.ad F,c.; r c-~.; Gr,i ~..c FuD!;c -~,d_~reC C%:rr;..~i:ni: ; ."/o~~;« rtre .-:~-c }., Crn•inicsi~.~u ..} r: ,., ._-i 5:(1fC;IF' P! fill') t? ~- ..;%~ t:re%>:!H Retie: t P?c:: .!' u..ci ` :!Y i:! Setts-*~[::! TOTAt. Dyett &Bhatia $ 12,000 $ 75,000 $ 80,320 $ 76.000 $ 15.000 $ S,000 $ 10,000 $ 273,320 $ 7,000 $ 9,000 $ 6,000 $ 22,000 $295,320 Field Paoli - 18,100 17,500 - - - - 35,600 - 1,000 1,000 2,000 37,600 Kimley Horn Associates - - 26,021 33,937 3,840 - 63,798 - - - - 63,798 Keyser Marston Associates - 9.400 9,400 - - - 18,800 - - - - 18,800 Charles Salter Associates - - - 8,500 - - 8,500 - - - 8,500 Re ort Printin - - - - - - - - - - - 5,000 TOTAL 12,D00 102,500 133,241 118;437 18,840 5,000 10,000 400,018 7,000 10,000 7,000 14,000 429,018 Optional Task Ti:si~ 4 Li; ,in Dyetc &Bhatia $ 22,000 Field Paoli Kimley Horn Associates - Keyser Marston Associates - Charles Salter Associates - Re ort Printin TOTAL 22,000 Total Base and Optional Tasl<s T07AL Dyett &Bhatia $317,320 Field Paoli 37,600 Kimley HomAssociates 63,798 Keyser Marston Associates 18,800 Charles Salter Associates 8,500 Re orc Printin 5,000 TOTAL 45 I ,018 RDA A GENDA ITEM # 4 °~x s _ ~ Redevelo meat A enc o~ ~ g y Sta Re o.rt ~~ ~~ 1~ LIFOR~ DATE: June 9, 2010 TO: Redevelopment Age-ncy Board FROM: Marty Van Duyn, Assistant Executive Director SUBJECT: RESOLUTION APPROVING AN OWNER PARTICIPATION AND LOAN AGREEMENT WITH GIFFRA ENTERPRISES, LLC. FOR THE PROVISION OF A :LOAN FOR THE REHABILITATION OF THE PROPERTY LOCATED AT 226-238 GRAND AVENUE, IN AN AMOUNT NOT TO EXCEED $2.5 MILLION, AND AUTHORIZING THE EXECUTION OF ALL DOCUMENTS IN CONNECTION WITH SUCH FINANCING RECOMMENDATION It is recommended that the Redevelopment Agency Board approve the Resolution authorizing an Owner Participation. and Loan Agreement with Giffra Enterprises, LLC., for the provision of a loan for the rehabilitation of the property located at 226-238 Grand Avenue, in an amount not to exceed $2.5 million, and authorizing the execution of all required loan documents. BACKGROUND/DISCUSSION In 2008, the Giffra Family began a feasibility study to determine the viability of converting the currently vacant West and Edwin (single room occupancy) Hotels into market rate apartment units. Toward that end the owner's contracted with Garavaglia Architecture, a firm specializing in historic hotels, to develop preliminary designs. The intent of the proposed renovation is to improve the quality of the structures a:nd its retail tenants. Several attempts to move the project forward were stalled due to the difficulties of renovating the historic structure to meet current codes. When the Redevelopment Agency adopted the Downtown Revitalization Strategy in 2009, the owner's wanted to work with the City to make physical improvements, upgrading their property and retail tenancy, and creating ten, two-bedroom units with modern amenities. The proposed. remodeling plans have keen several revisions with extensive comments from planning, building and fire staff members, resulting in the best possible design for the new apartment units. The project includes t:wo properties, owned by Giffra Enterprises, being converted into ten units (five in each building) with two bedrooms and two full bathrooms, with the larger upstairs units having an additional half bath on the first floor. The kitchens and dining areas are designed to be open spaces built around the existing skylights for ambiance and energy savings. The bathrooms include amenities such as walk in showers and bath tubs, double sinks in master baths, and upscale finishes. The two larger upper floor units include a study and decks facing north. Staff Report Subject: Giffra Remodel of West and Edwin Hotels Page 2 The newly created carports are a slightly more contemporary design that blends with the Historic architectural character of the existing building. A covered space is provided for each unit and a residential lobby is created at the; rear, by the elevators, to provide entry off the Lane and space for bicycles and socializing. The Design Review Board provided numerous helpful comments during several design iterations and the Parking Place Commission granted a parking exception of 13 parking spaces, accommodating one parking space for each of the 10 residential units. The guest parking spaces will be provided through the City's on-and-off-street metered parking spaces. To allow adequate space for one accessible parking space and one loading space, the applicant is proposing lot line adjustments to both properties. The Planning Commission was generally in favor of the project; following is the excerpt from the minutes of the October 15, 2009 Commission meeting in regards to the Giffra renovation project: "The Planning Commission was pleased with the general design of the project, noting its consistency with the City's desire to increase density downtown without losing the character of the community. The Commission was also pleased to see that the project incorporated sustainable design features." FUNDING Construction bids have been secured a.nd the entire project has been value engineered by the general contractor and the chief building official. These construction numbers are based on actual sub-contractor bids secured in February of this year. Total Construction Amount Architectural/Engineering & Structural Total Project Costs Sources of Funds: Redevelopment Agency Loan Giffra Family Trust Funds Total Sources of Funds: Per Unit Cost Total Owner Contribution `,~ 2,537,370 <6 201,800 !~ 2,739,170 ~ 2,500,000 ;~ 250,000 ~ 2,750,000 $ 274,000 ~~ 360,359 (Includes $110,359 expended to date for architectural and engineering services) The proposed terms of the Redevelopment Agency Owner Participation and Loan Agreement attempt to achieve multiple goals. The first goal is to provide the owner with a zero interest, deferred loan for the first two years during the construction and lease up period when they will not generate revenues. The Agency's second goal is make sure the revenue in the early years is sufficient to maintain a positive cash flow for the project that is capable of sustaining the owner's increased operating costs and debt servicing to the Agency. The expected lower rents and revenue in the first ten years means th~~e Agency will have to accept lower loan payments initially. Staff Report Subject: Giffra Remodel of We:>t and Edwin Hotels Page 3 As the project matures, the cash flow will increase. Therefore; the Agency's third goal is to accelerate the repayment of its investnnent. To do so, the Agency will begin raising the interest rate and loan payment amounts. This ~~vill result in a fair market return to the Agency and provide an incentive to the owner to refinance and pay-off the Agency loan. Essentially, the interest rate for the first ten years will be at 3% with increases of 1 % every five years until maturity. The 30 year term of the loan will generate 7% interest for the last five years of the note. This note will be secured by Deed of Trust against the property which is currently valued at $2.8 million, as is, and without any other liens. The full revenues generated by the project will service only the Agency's loan and basic operating expenses. It is anticipated that once renovations are completed the value of the property will far exceed the current appraised valuation. The City Council's Housin;~ Sub-Committee has reviewed design plans and financial proforma for the project and has referred it to the Redevelopment Agency Board for formal approval. CONCLUSION This is a significant loan which has bf;en anticipated for two years and funds have been targeted from the Agency Housing Fund proje~;,ting this level of expenditure. The units will not be low income, but rather moderate income, available to families at 90% to 120 % of median income. Furthermore, the Agency will receive new housing production credit for all ten units because the property has been vacant for over 30 years and will be subject to rent restrictions for 55 years, as required by redevelopment law. It is recommended that the Redevelopment Agency Board approve the Resolution authorizing an Owner Participation and Loan Agreement with Giffra Enterprises, LLC. for the provision of a loan for the rehabilitation of the property located at 226-238 Grand Avenue, in an amount not to exceed $2.5 million, and authorizing the execution all required loan documents. By: Marty Van Duyn Assistant Executive Director Attachment: Resolution Approved: ~` Ba M. Nagel Executive Director Owner Participation and Loan Agreement Documents Facade Concept, Exterior and Interior Design Plans Planning Commission Staff Report, Use Permit and Conditions of Approval RESOLUTION NO REDEVELOPMENT AGENCY, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION APPROVING AN OWNER PARTICIPATION AND LOAN AGREEMENT WITH GI:FFRA ENTERPRISES, LLC, APPROVING THE PROVISION OF A LOAN FOR THE REHABILITATION OF A MODERATE- INCOME RESIDENTIAL/ MIXED-USE PROJECT AT 226-238 GRAND AVENUE AND AUTHORIZING THE EXECUTION OF DOCUMENTS IN CONNECTION WITH SUCH FINANCING WHEREAS, the Redevelopment Agency of the City of South San Francisco ("Agency") is a redevelopment agency existing pursuant to the Community Redevelopment Law, California Health and Safety Code Section 33000, et seq. (the "CRL"), and pursuant to the authority granted thereunder, has the responsibility to carry out the Redevelopment Plan (the "Redevelopment Plan") for the Downtown/Central Redevelopment Project Area (the "Project Area"); WHEREAS, Giffra Enterprises, LLC, a California limited liability company ("Owner") is the owner of two currently vacant single-room occupancy hotels located in the Project Area at 228 and 236 Grand Avenue and known as San Mateo County Assessor's Parcel Nos. 012-315-130 and 012-315-140 (the "Property"); WHEREAS, the Owner proposes to rehabilitate the Property into ten (10) apartment units that will be affordable to moderate- income households (the "Project"); WHEREAS, the Project will be of benefit to the Project Area because it will improve the streetscape appearance of the Property and will increase the supply of housing that is affordable to moderate-income residents of the Project Area and the City; WHEREAS, the terms and conditions for the rehabilitation and the financing of the Project are more particularly described in a proposed Owner Participation and Loan Agreement (the "OPA") between Agency and Owner, copies of which have been provided to the Agency; WHEREAS, the proposed Agency financing for the Project includes a construction/permanent loan in the amount of Two Million Five Hundred Thousand Dollars ($2,500,000) (the "Lo;~n") to be funded from the Agency's Low and Moderate- Income Housing Set-Aside Fund; and WHEREAS, Owner and Agency staff have negotiated the terms and conditions of (i) the OPA; (ii) an Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants ("Regulatory Agreement") that will restrict rents for units in the Project at affordable levels for a period of 55 years; (iii) a Secured Promissory Note (the "Note") that provides for repayment of the Loan with interest; and (iv) a Deed of Trust, 1147959-I Assignment of Rents, Security Agreement and Fixture Filing (the "Deed of Trust") pursuant to which the Agency will be provided a security interest in the Property and the Project to secure repayment of the Loan and compliance with the Regulatory Agreement. NOW, THEREFORE, BE IT RESOLVED by the Redevelopment Agency of the City of South San Francisco that it hereby: 1. Finds that the rehabilitation of the Property in accordance with the OPA and the provision of the Loan for the Project will facilitate the development of housing for moderate-income households, will be of benefit to the Project Area, will further the goals of the Redevelopment Plan, and will be consistent with the implementation plan adopted in connection therewith. 2. Approves the OPA, authorizes the Executive Director or his designee to execute and deliver the OPA substantially in the form on file with the Agency Secretary. 3. Approves the provision of the Loan pursuant to the terms and conditions set forth in the OPA. 4. Approves the Note, the Deed of Trust and the Regulatory Agreement, and authorizes the Executive Director or his designee to execute and deliver each such document to which the Agency is a party substantially in the form on file with the Agency Secretary. 5. Appropriates from the Agency's Low and Moderate-Income Housing Fund the funds necessary to fund the :Loan. 6. Authorizes the Executive Director or his designee to execute and deliver such other instruments and to take such other actions as necessary to carry out the intent of this Resolution. * * ~ I hereby certify that the foregoing Resolution was regularly introduced and adopted by the Redevelopment Agency of the City of South San Francisco at a meeting held on the day of , 2010 by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: Agency Secretary 1147959-1 2 OWNER PARTICIPATION AND LOAN AGREEMENT by and between THE REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO and GIFFRA ENTERPRISES, LLC (Renovation of West and Edwin Hotels) 2010 1422342.2 Exhibits A Legal Description of Properlty B Financing Plan C Form of Memorandum of Owner Participation Agreement D Form of Certificate of Completion E Form of Promissory Note F Form of Deed of Trust G Form of Regulatory Agreement with Notice of Affordability Restrictions 1422342.2 THIS OWNER PARTICIPATION AND LOAN AGREEMENT (this "Agreement") is entered into effective as of , 2010 ("Effective Date") by and between the Redevelopment Agency of the City of South San Francisco, a public body, corporate, and politic ("Agency") and Giffra Enterprises, LLC, a California limited liability company ("Owner"). Agency and Owner are hereinafter collectively referred to as the "Parties." RECITALS A. Pursuant to authority granted under Community Redevelopment Law (California Health and Safety Code Section 33000 et seq.) ("CRL"), the Agency has responsibility to implement the redevelopment plan adopted in 1989 by the City Council of the City of San Francisco by Ordinance No. 1056-89 (as subsequently amended, the "Redevelopment Plan") for the Downtown Redevelopment Project (the "Project Area"). B. Owner is the owner of fee title to the real property located in the Project Area at 228 and 236 Grand Avenue in the City of South San Francisco ("City"), and known as San Mateo County Assessor's Parcel Nos. 012-315-130 and 012-315-140 as more particularly described in Exhibit A attached hereto (the "Property"). C. Owner has proposed to rehabilitate the improvements located on the Property (the "Improvements") in order to, among other improvements, convert the existing hotel units into apartment units that will be affordable to moderate-income households, and renovate the common areas (all of the foregoing, collectively, the "Project"). D. Owner has requested, and-Agency has agreed to provide, a loan (the "Loan") pursuant to the terms and conditions set forth herein for the purpose of providing partial financing for the Project. E. The purpose of this Agreement is to effectuate the Redevelopment Plan by providing for the rehabilitation of the Property as more particularly set forth herein. The Agency has determined that (i) rehabilitation of the Property pursuant to this Agreement is consistent with the Redevelopment Plan and the Implementation Plan for the Project Area, will be of benefit to the Project Area, and will further the goals of the Redevelopment Plan by improving the streetscape appearance of the Improvements, and by providing affordable housing, and (ii) the Loan is necessary to make the Project economically feasible and affordable to moderate- income households. F. A material inducement to the Agency to enter into this Agreement is the agreement by Owner to rehabilitate the Property within the time periods specified herein and in accordance with the provisions hereof, and the Agency would be unwilling to enter into this Agreement in the absence of an enforceable commitment by Owner to complete the Project in accordance with such provisions and within such time periods. G. In connection with this Agreement Owner shall execute: (i) a secured promissory note (the "Note") in the amount of the Loan, (ii) a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing ("Deed of Trust") which shall provide Agency with a security interest in the Prope~~ty, (iii) an Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants ("Regulatory Agreement") which shall require Project 422342.2 3 rents to be affordable to moderate-income households for a term of not less than fifty-five (55) years, and (iv) a Notice of Affordabiility Restrictions on Transfer of Property ("Notice"). This Agreement, the Note, the Deed of Trust, the Notice, and the Regulatory Agreement are collectively hereinafter referred to as the "Agency Documents." NOW, THEREFORE, in consideration of the mutual covenants contained herein and good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows. ARTICLE I DEFINITIONS 1. Definitions. The following terms shall have the meanings set forth in the Sections referenced below whenever used in this Agreement and the Exhibits attached hereto. Additional terms are defined in the Recitals and text of this Agreement. 1.1 "Agency Documents" is defined in Recital G. 1.2 "Certificate of Completion" is defined in Section 3.15. 1.3 "City' means the City of South San Francisco, a municipal corporation. 1.4 "City Council" means the City Council of the City of South San Francisco. 1.5 "Claims" is defined in Section 3.17. 1.6 "Closing Date" is defined in Section 4.1. 1.7 "Conditions of Approval" is defined in Section 3.2. 1.8 "Construction Plans" is defined in Section 3.11. 1.9 "Deed of Trust" is defined in Recital G. 1.10 "Environme:ntal Laws" is defined in Section 8.4. 1.11 "Financing flan" is defined in Section 3.7. 1.12 "Hazardous Materials" is defined in Section 8.3. 1.13 "Improvements" is defined in Recital C. 1.14 "Indemnitees" is defined in Section 3.17. 1.15 "Loan" is defined in Section 4.1. 1.16 ``Note" is defined in Section 4.1. 1422342.2 4 1.17 "Notice" is defined in Recital G. l .l 8 "Official Records" means the Official Records of San Mateo County. 1.19 "Permitted E;zceptions" is defined in Section 4.5. 1.20 "Project" is defined in Recital C and further described in Section 3.2. 1.21 "Regulatory Agreement" is defined in Recital G. 1.22 "Title Policy'' is defined in Section 4.5. 1.23 "Transfer" is defined in Section 6.2. ARTICLE II REPRESENTATIONS; EFFECTIVE DATE AND TERM 2.1 Owner's Representations. Owner represents and warrants to Agency as follows, and Owner covenants that until the expiration or earlier termination of this Agreement, upon learning of any fact or condition which would cause any of the warranties and representations in this Section 2.1 not to be true, Ownf;r shall immediately give written notice of such fact or condition to Agency. Owner acknowledges that Agency shall rely upon Owner's representations made herein notwithstanding any investigation made by or on behalf of Agency. (i) Authority. Owner is a limited liability company, duly organized and in good standing under the laws of the State of California. Owner has the full right, power and authority to undertake all obligations of Owner as provided herein, and the execution, performance and delivery of this Agreement by Owner has been duly authorized by all requisite actions. The persons executing this Agreement on behalf of Owner have been duly authorized to do so. This Agreement and the other Agency Documents constitute valid and binding obligations of Owner, enforceable in accordance with their respective terms. (ii) Ownership. Owner is the owner in fee of the Property and the Improvements, subject only to liens, encumbrances, easements, restrictions, conditions, and other matters of record or disclosed in writing to Agency. (iii) No Conflict. Owner's execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which Owner is a party or by which it is bound. (iv) No Liti a~~ or Other Proceeding. No litigation or other proceeding (whether administrative or otherwise) is outstanding or has been threatened which would prevent, hinder or delay the ability of Owner to perform its obligations under this Agreement. 14223422 (v) No Owner Bankruptcy. Owner is not the subject of a bankruptcy or insolvency proceeding. 2.2 Effective Date; Memorandum. The obligations of Owner and Agency hereunder shall be effective as of the Effective Date. Concurrently with the execution of this Agreement, the Parties shall execute a Memorandum of this Agreement substantially in the form attached hereto as Exhibit C which shall be recorded in the Official Records. ARTICLE III DEVELOPMENT OF THE PROJECT 3.1 The Property Owner represents and warrants that as of the Effective Date: (i) Owner possesses fee simple title to t:he Property, and (ii) the Property is subject to no covenant, condition, restriction or agreement thhat would prevent the development of the Project in accordance with this Agreement. If at any time the foregoing statements become untrue, the Agency shall have the right to terminate this Agreement upon written notice to Owner. 3.2 Scope of Development. Owner shall rehabilitate the Property in accordance with the terms and conditions of this Agreement and in compliance with the terms and conditions of all approvals, entitlements and permits that the City or any other governmental body or agency with jurisdiction over the Project or the Property has granted or issued as of the date hereof or may hereafter grant or issue in connection with the Project, including without limitation, all mitigation measures imposed in connection with environmental review of the Project (if any), all requirements related to preservation of historic resources (if applicable), and all conditions of approval imposed in connection with any entitlements, approvals or permits (all of the foregoing approvals, entitlements, permits, mitigation measures and conditions of approval are hereafter collectively referred to as the "Conditions of Approval"). The Project will consist of tree rehabilitation of the Property, including without limitation, the conversion of existing hotel rooms into ten (10) two-bedroom apartments, improvement of the common areas of the structure, and the installation of covered carports. 3.2.1 Affordable Housin .Owner covenants and agrees for itself, its successors and assigns that the Property will be subject to recorded covenants that will provide that for a term of not less than fifty-five (55) years commencing upon the issuance of a final certificate of occupancy for the Project, the residf;ntial units in the Project shall be rented at an affordable cost to households whose income is less than or equal to one hundred twenty percent (120%) of Area Median Income (as defined in the Regulatory Agreement) in accordance with the terms hereof and the Regulatory Agreement which the Parties shall execute substantially in the form attached hereto as Exhibit G concurrently with the execution of this Agreement, and which shall be recorded in the Official Records. 3.2.2 Preference for Dis~lacees, South San Francisco Residents and Employees. Consistent with the requirements of California Health and Safety Code Section 33411.3, Owner shall provide persons and households of low- or moderate-income who are displaced by the 1422342.2 6 Project a priority in renting or purchasing units in Project. In addition, in order to ensure that there is an adequate supply of affordable housing within the City of South San Francisco for residents and employees of business~,es within the City, to the extent permitted by law and consistent with the program regulations for funding sources used for development of the Project, at initial lease up, Owner shall give a preference in the rental of the residential units in the Project to eligible households that include at least one member who lives or works in the City of South San Francisco. In the event there are fewer eligible persons available than there are units, units shall be made available to members of the general public. 3.3 Relocation. Persons residing on the Property shall not be displaced before suitable replacement housing is available in comparable replacement housing. Owner shall ensure that all residential and commercial tenants of the Property receive all notices, benefits and assistance to which they are entitled in accordance with California Relocation Assistance Law (Government Code Section 7260 et seq.), all state and local regulations implementing such law, and all other applicable local, state and federal laws and regulations (collectively "Relocation Laws") relating to the displacement and relocation of eligible persons as defined in such Relocation Laws. Any and all costs incurred in connection with the temporary and/or permanent displacement and/or relocation of occupants of the Property, including without limitation payments to a relocation consultant., moving expenses, and payments for temporary and permanent relocation benefits pursuant to Relocation Laws shall be paid by Owner. Owner shall indemnify, defend (with counsel approved by Agency) and hold harmless the Indemnitees from and against any and all Claims arising in connection with the breach of Owner's obligations set forth in this Section whether or not ,any insurance policies shall have been determined to be applicable to any such Claims. It is further agreed that Agency and City do not and shall not waive any rights against Owner which they may have by reason of this indemnity and hold harmless agreement because of the acceptance by Agency, or Owner's deposit with Agency of any of the insurance policies described in this Agreement. Owner's indemnification obligations set forth in this Section shall not apply to Claims arising from the gross negligence or willful misconduct of the Indemnitees. Owner's obligations set forth in this Section 3.3 shall survive the expiration or earlier termination of this Agreement and the issuance of a Certificate of Completion for the Project. 3.4 Project Approvals. Owner acknowledges and agrees that execution of this Agreement by Agency does not constitute approval for the purpose of the issuance of building permits for the Project, does not limit in any manner the discretion of City in such approval process, and does not relieve Owner from the obligation to apply for and obtain all necessary entitlements, approvals, and permits for the Project, including without limitation, the approval of architectural plans, the issuance of any certificates regarding historic resources required in connection with the Project (if any), and the completion of any required environmental review. Owner covenants that it shawl: (i) obtain all necessary permits and approvals which may be required by Agency, City, or any other governmental agency having jurisdiction over the Project or the Property, (ii) comply with all Conditions of Approval, (iii) comply with all mitigation measures imposed in connection with any environmental review of the Project, and (iv) not commence construction work on the Project prior to issuance of building permits required for such work. 1422342.2 ~ Agency staff shall work cooperatively with Owner to assist in coordinating the expeditious processing and consideration of all permits, entitlements and approvals necessary for development of the Project. 3.5 Fees. Owner shall be solely responsible for, and shall promptly pay when due, all customary and usual fees and chargE;s of City in connection with obtaining building permits and other approvals for the Project, including without limitation, those related to the processing and consideration of amendments, if any, to the current entitlements, any related approvals and permits, environmental review, design review, architectural review, historic review, and any subsequent approvals for the Project or the development of the Property. 3.6 Cost of Construction,. Except as expressly set forth herein, Owner shall be solely responsible for all direct and indirect costs and expenses incurred in connection with the design, development and construction of the Project and compliance with the Conditions of Approval, including without limitation the installation and construction of all off-site or on-site improvements required by City in connection therewith, and none of such costs and expenses shall be the obligation of the Agency or the City. 3.7 Financing Plan. Owner has submitted to Agency, and Agency hereby approves a plan for financing the Project (hereinafter, "Financing Plan"), indicating all sources of funds necessary to pay, when due, the estimated costs of construction, including hard and soft construction costs. Owner represents and warrants that all such funds have been firmly committed by Owner, equity investors or lending institutions, subject only to commercially reasonable conditions. The Financing Plan is attached hereto as Exhibit B. 3.8 Development Schedule. Owner shall commence and complete construction of the Project and shall satisfy all other obligations of Owner under this Agreement within the time periods set forth herein, as such time periods may be extended upon the mutual written consent of the Parties. Subject to force majeure, Owner shall commence construction of the Project not later than three (3) months following the Effective Date, and Owner shall diligently prosecute to completion the Project in order to allow City to issue a final certificate of occupancy within twenty-four (24) months following commencement of construction work. Subject to force majeure, Owner's failure to commence or complete construction of the Project in accordance with the time periods specified in this Section 3.8 foregoing shall be an Event of Default hereunder. 3.9 Rights of Access. For the purpose of ensuring that the Project is developed in compliance with this Agreement, Owner shall permit representatives of the Agency and the City to enter upon the Property to inspect the Project following 24 hours written notice (except in the case of emergency in which case such notice as may be practical under the circumstances shall be provided). 3.10 Agency Disclaimer. Owner acknowledges that the Agency and City are under no obligation, and neither Agency nor City undertakes or assumes any responsibility or duty to Owner or to any third party, to in arty manner review, supervise, or inspect the progress of construction or the operation of the Project. Owner and all third parties shall rely entirely upon its or their own supervision and inspection in determining the quality and suitability of the 1422342.2 $ materials and work, the performance of architects, subcontractors, and material suppliers, and all other matters relating to the construction and operation of the Project. Any review or inspection undertaken by the Agency or the City is solely for the purpose of determining whether Owner is properly discharging its obligations under this Agreement, and shall not be relied upon by Owner or any third party as a warranty or representation by the Agency or the City as to the quality of the design or construction of the Improvements or otherwise. 3.11 Construction Plans. Owner shall submit to City's Building Department detailed construction plans for the Project (thee "Construction Plans"). As used herein "Construction Plans" means all construction documents upon which Owner and Owner's contractors shall rely in constructing the Project (includin;g, as applicable, landscaping, parking, pedestrian access and common areas) and shall include, without limitation the following as applicable to the Project: the site development plan, final architectural drawings, landscaping, exterior lighting and signage plans and specifications, materials specifications, final elevations, and building plans and specifications. The Construction Pl<~ns shall be based upon the scope of development set forth herein and upon the approvals issued by the Agency and the City for the Project, and shall not materially deviate therefrom without the express written consent of Agency and City. Provided that the Construction Plans are consistent with the requirements of this Agreement, approval of the Construction Plans by City shall be deemed approval thereof by Agency. 3.12 Construction Pursuant to Plans. Owner shall complete the Project in accordance with the approved Construction Plans, the Conditions of Approval, and all other permits and approvals granted by the City and/oar the Agency pertaining to the Project. Owner shall comply with all directions, rules and regulations of any fire marshal, health officer, building inspector or other officer of every governmental agency having jurisdiction over the Property or the Project. Each element of the work shall proceed only after procurement of each permit, license or other authorization that may be required for such element by any governmental agency having jurisdiction. All design and construction work on the Project shall be performed by licensed contractors, engineers or architects, as applicable. 3.13 Change in Construction Plans. If Owner desires to make any material change in the approved. Construction Plans, Owner shall submit the proposed change in writing to the Agency and City for their written approval, which approval shall not be unreasonably withheld or delayed if the Construction Plans, as modified by any proposed change, conform to the requirements of this Agreement and any approvals issued. by Agency or City after the Effective Date. Unless a proposed change is approved by Agency within thirty (30) days, it shall be deemed rejected. If rejected, the previously approved Construction Plans shall continue to remain in full force and effect. Any change in the Construction Plans required in order to comply with applicable codes shall be deemed approved, so long as such change does not substantially nor materially change the architecture, design, function, use, or amenities of the Project as shown. on the latest approved Construction Plans. Approval of changes to the Construction Plans by City shall be deemed approval thereof by Agency. Nothing in this Section is intended to or shall be deemed to modify the City's standard plan review procedures. 3.14 Defects in Plans. Neither Agency nor City shall be responsible to Owner or to any third party for any defect in the Construction Plans or for any structural or other defect in any work done pursuant to the Con:>truction Plans. Owner shall indemnify, defend (with counsel 1422342.2 9 approved by Agency) and hold harmless the Indemnitees from and against all Claims arising out of, or relating to, or alleged to arise from or relate to defects in the Construction Plans or defects in any work done pursuant to the Construction Plans whether or not any insurance policies shall have been determined to be applicable to any such Claims. Owner's indemnification obligations set forth in this Section shall survive the expiration or earlier termination of this Agreement and the recordation of a Certificate of Completion. It is further agreed that Agency and City do not, and shall not, waive any rights against Owner which they may have by reason of this indemnity and hold harmless agreement because of the acceptance by Agency, or Owner's deposit with Agency of any of the insurance policies described in this Agreement. Owner's indemnification obligations pursuant to this Section shall not extend to Claims arising due to the gross negligence or willful misconduct of the Indemnitees. 3.15 Certificate of Completion for Project. Promptly after completion of the Project, issuance of a final Certificate of Occupancy by the City and the written request of Owner, the Agency will provide an instrument ("Certificate of Completion") so certifying, provided that at the time such certificate is requested all applicable components of the Project have been completed. The Certificate of Completion shall be conclusive evidence that Owner has satisfied its obligations regarding the Project. The Certificate of Completion shall be issued substantially in the form attached hereto as Exhibit D, and at Owner's option, shall be recorded in the Official Records. The Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of Owner to any holder of a deed of trust or mortgage securing money loaned to finance the Project or any part thereof and shall not be deemed a notice of completion under the California Civil Code, nor shall such Certificate provide evidence that Owner has satisfied any obligation that survives the expiration of this Agreement, including, without limitation, Owner's obligations pursuant to the Regulatory Agreement. 3.16 Equal Opportunity. .During the construction of the Project, there shall be no discrimination on the basis of race, color, religion, creed, sex, sexual orientation, marital status, ancestry or national origin in the hiring, firing, promoting or demoting of any person engaged in construction of the Project, and Owner shall direct its contractors and subcontractors to refrain from discrimination on such basis. 3.17 Prevailing Wage Re~Iuirements. To the full extent required by all applicable state and federal laws, rules and regulations, if any, Owner and its contractors and agents shall comply with California Labor Code Section 1720 et seq. and the regulations adopted pursuant thereto ("Prevailing Wage Laws"), and shall be responsible for carrying out the requirements of such provisions. If applicable, Owner shall submit to Agency a plan for monitoring payment of prevailing wages and shall implement such plan at Owner's expense. Owner shall indemnify, deff;nd (with counsel approved by Agency) and hold the Agency, the City, and their respective elected and appointed officers, officials, employees, agents, consultants, and contractors (collectively, the "Indemnitees") harmless from and against all liability, loss, cost, expense (including without limitation attorneys' fees and costs of litigation), claim, demand, action, suit, judicial or administrative proceeding, penalty, deficiency, fine, order, and damage (all of the foregoing collectively "Claims") which directly or indirectly, in 1422342.2 10 whole or in part, are caused by, arise in connection with, result from, relate to, or are alleged to be caused by, arise in connection with, or relate to, the payment or requirement of payment of prevailing wages (including without: limitation, all claims that may be made by contractors, subcontractors or other third party claimants pursuant to Labor Code Sections 1726 and 1781) or the requirement of competitive bidding in the construction of the Project, the failure to comply with any state or federal labor laws, regulations or standards in connection with this Agreement, including but not limited to the Prevailing Wage Laws, or any act or omission of Owner related to this Agreement with respect to the payment or requirement of payment of prevailing wages or the requirement of competitive bidding, whether or not any insurance policies shall have been determined to be applicable to any such Claims. It is further agreed that Agency and City do not and shall not waive any rights against Owner which they may have by reason of this indemnity and hold harmless agreement because of the acceptance by Agency, or Owner's deposit with Agency of any of the insurance policies described in this Agreement. The provisions of this Section 3.17 shall survive the expiration or earlier termination of this Agreement and the issuance of a Certificate of Complettion for the Project. Owner's indemnification obligations set forth in this Section shall not apply to Claims arising from the gross negligence or willful misconduct of the Indemnitees. 3.18 Compliance with Laws. Owner shall carry out and shall cause its contractors to carry out the construction of the Project in conformity with all applicable federal, state and local laws, rules, ordinances and regulations, including without limitation, all applicable federal and state labor laws and standards, the City zoning and development standards, building, plumbing, mechanical and electrical codes, all other provisions of the City's Municipal Code, and all applicable disabled and handicapped access requirements, including without limitation, the Americans with Disabilities Act, 42: U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, et seq., and the Unruh Civil Rights Act, Civil Code Section 51, et seq.. Owner shall indemnify, defend (with counsel approved by Agency) and hold harmless the Indemnitees frorri and against any and all Claims arising in connection with the breach of Owner's obligations s,et forth in this Section whether or not any insurance policies shall have been determined to be applicable to any such Claims. It is further agreed that Agency and City do not and shall not waive any rights against Owner which they may have by reason of this indemnity and hold harmless agreement because of the acceptance by Agency, or Owner's deposit with Agency of any of the insurance policies described in this Agreement. Owner's indemnification obligations set forth in this Section shall not apply to Claims arising from the gross negligence or willful misconduct of the Indemnitees. Owner's defense and indemnification obligations set forth in this Section 3.18 shall survive the expiration or earlier termination of this Agreement and 'the issuance of a Certificate of Completion for the Project. 3.19 Liens and Stop Notices. Until the expiration of the term of the Regulatory Agreement, Owner shall not allow to be placed on the Property or any part thereof any lien or stop notice on account of materials supplied. to or labor performed on behalf of Owner. If a claim of a lien or stop notice is given or recorded affecting the Project, Owner shall within twenty (20) days of such recording or service: ~(a) pay and discharge (or cause to be paid and discharged) the same; or (b) effect the release thereof by recording and delivering (or causing to be recorded and delivered) to the party entitled thereto a surety bond in sufficient form and amount; or (c) provide other assurance satisfactory to Agency that the claim of lien or stop notice will be paid or discharged. 1422342.2 1 1 3.20 Ri hg_t o_f Agenc~to Satisfy Liens on the Property If Owner fails to satisfy or discharge any lien or stop notice on the Property pursuant to and within the time period set forth in Section 3.19 above, the Agency shall have the right, but not the obligation, to satisfy any such liens or stop notices at Owner's expense and without further notice to Owner and all sums advanced by Agency for such purpose shall be part of the indebtedness secured by the Deed of Trust. In such event Owner shall be liable for and shall immediately reimburse Agency for such paid lien or stop notice. Alternatively, the Agency may require Owner to immediately deposit with Agency the amount necessary t:o satisfy such lien or claim pending resolution thereof. The Agency may use such deposit to satiisfy any claim or lien that is adversely determined against Owner. Owner shall file a valid notice of cessation or notice of completion upon cessation of construction of the Improvements for a continuous period of thirty (30) days or more, and shall take all other reasonable steps to forestall the assertion of claims or liens against the Property or the Improvements. The Agency may (but has no obligation to) record any notices of completion or cessation of labor, or any other notice that the Agency deems necessary or desirable to protect its interest in the Property and the Improvements. 3.21 Performance and Payment Bonds. Prior to commencement of construction work on the Project, Owner shall cause its general contractor to deliver to the Agency copies of payment bond(s) and performance l;-ond(s) issued by a reputable insurance company licensed to do business in California, each in a~penal sum of not less than one hundred percent (100%) of the scheduled cost of construction of the Project. The bonds shall name the Agency and the City as co-obligees. In lieu of such performance and payment bonds, subject to Agency's approval of the form and substance thereof, Owner may submit evidence satisfactory to the Agency of the contractor's ability to commence and complete construction of the Project in the form of an irrevocable letter of credit, pledge of cash deposit, certificate of deposit, or other marketable securities held by a broker or other financial institution, with signature authority of the Agency required for any withdrawal, or a completion guaranty in a form and from a guarantor acceptable to Agency. Such evidence must be submitted to Agency in approvable form in sufficient time to allow for Agency's review and approval prior to the scheduled construction start date. 3.22 Insurance Requirements. Owner shall maintain and shall cause its contractors to maintain all applicable insurance coverage specified in Article X. ARTICLE IV AGENCY FINANCIAL ASSISTANCE 4.1 Loan and Note. Agency agrees to provide a loan to Owner in the principal amount of Two Million Five Hundred Thousand Dollars ($2,500,000) (the "Loan") upon the terms and conditions and for the purposes set forth in this Agreement. The Loan shall be evidenced by a Secured Promissory Note in the amount of the Loan (the "Note") dated as of the date of closing (the "Closing Date") and executed by Owner substantially in the form attached hereto as Exhibit E. The Note shall. be secured by a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (the "Deed of Trust") executed by Owner as Trustor for the benefit of Agency substantially in the form attached hereto as Exhibit F. 1422342.2 12 4.2 Interest Rate; Payment Dates; Maturity Date. Interest shall accrue on the Loan as follows: (i) the outstanding principal balance of the Note will not bear interest during the first two (2) years of the term of the Loan; (ii) commencing upon the second (2nd) anniversary of the Closing Date (the "Interest Commencement Date"), the outstanding principal balance of the Note will bear interest at three percent (3%) simple annual interest; (iii) on the eighth (grn) anniversary of the Interest Commencement Date (the "First Interest Increase Date"), the annual rate of interest shall increase by one percent (1 %), and (iv) on each fifth (5'") anniversary of the First Interest Increase Date, the annual rate of interest shall increase by one percent (1 %); such that the following interest rates shall apply: Years 1-2 (July 1, 2010 --June 30, 2012): No interest Years 3-10 (July 1, 2012 -- June 30, 2020): 3% interest Years 11-15 (July 1, 2020 -- June 30, 2025): 4% interest Years 16-20 (July 1, 2025 -- June 30, 2030): 5% interest Years 21-25 (July 1, 2030 -- June 30, 2035): 6% interest Years 26-30 (July 1, 2035 -- June 30, 2040): 7% interest No payments will be due during the first two (2) years of the term of the Loan. Commencing upon the Interest Commencement Date, monthly payments will be due and payable in accordance with the terms of the Note. The entire outstanding principal balance of the Loan together with accrued interest and aal other sums due under the Agency Documents shall be payable in full on the thirtieth (30r") anniversary of the Closing Date (the "Maturity Date"). (Provided that all payments have been timely made, the parties estimate that the outstanding principal balance on the Maturity Date will be One Million, Four Hundred Eighty-Five Thousand, Six Hundred Forty-Seven Dollars ($1,485,647).) Notwithstanding the foregoing, the Agency shall have the right to accelerate the maturity date and declare all sums payable under the Note immediately due and payalble upon the occurrence of an Event of Default, including without limitation, Owner's failure ~to commence or complete construction of the Project within the times periods specified in Section 3.8. 4.3 Security. As security for repayment of the Note, Owner shall execute the Deed of Trust in favor of Agency as beneficiary pursuant to which Agency shall be provided a lien against Owner's interest in the Property and the Improvements. The Deed of Trust shall be dated as of the Closing Date, shall be substantially in the form attached hereto as Exhibit F, and shall be recorded in the Official Records on the Closing Date. The Deed of Trust may be subordinated only to the Permitted Exceptions and such liens and encumbrances as Agency shall approve in writing. Owner acknowledges that the Deed of Trust secures Owner's performance of Owner's obligations pursuant to this Agreement and the Regulatory Agreement which may survive repayment of the Note, and that the Deed of Trust shall not be reconveyed prior to Owner's satisfaction of such obligations. l 422342.2 13 4.4 Use and Disbursement of Proceeds. Owner shall use the proceeds of the Loan (the "Loan Proceeds") solely and exclusively to pay for costs billed to Owner by third parties in connection with the design and construction of the Project and such other costs related to the Project as Agency may approve in writing. Provided that Owner has complied with all conditions precedent to disbursement of the Loan set forth in Section 4.5 and has provided Agency with a written requisition specifying the amount and use of the requested Loan Proceeds, accompanied by copies of evidence of payment of bills and invoices from third parties and such other documentation as Agency may reasonably require, the initial disbursement of Loan Proceeds shall be disbursed to Owner. Subsequent disbursements shall be made no more than once per calendar month, upon Agency's receipt of written requisitions and supporting documentation. 4.5 Conditions to Disbursement of Loan Proceeds. Agency's obligation to fund the Loan and disburse the Loan Proceeds is conditioned upon the satisfaction (or Agency's waiver) of all of the following conditions: (i) Owner's execution and delivery to Agency of this Agreement, the Note, the Deed of Trust, the Regulatory Agreement, the Notice, and the Memorandum. (ii) Recordation of the Memorandum, the Regulatory Agreement, the Notice, and the Deed of Trust in the Official Records. (iii) The issuance by an insurer satisfactory to Agency of an A.L.T.A. lender's policy of title insurance ("Title Policy") for the benefit of Agency in the amount of the Loan, insuring that the lien of the Deed of~Trust is subject only to exceptions number through identified in that certain Preliminary Report (Order No. )issued by Title Company and dated , 20_ (provided that taxes and assessments are paid current as of the closing date), and such other defects, liens, conditions, encumbrances, restrictions, easements and exceptions as Agency may approve in writing (collectively, the "Permitted Exceptions") and containing such endorsements as Agency may reasonably require, with the cost of such Title Policy to be paid by Owner. The cost of the Title Policy shall be paid by Owner . (iv) Owner's delivery to Agency of each of the following: (i) certified copies of Owner's Certificate of Formation and Operating Agreement, (ii) certificate of good standing, certified by the Secretary of State indicating that Owner is properly organized and authorized to do business in the State of California, and (iii) a certified resolution indicating that the persons executing the Agency Documents o~n behalf of Owner have been duly authorized to do so. (v) Owner's delivery to the Agency of evidence of property and liability insurance coverage in accordance with the requirements set forth in Article X. (vi) Owner's delivery to Agency of evidence reasonable satisfactory to Agency that there are no mechanics' liens or stop notices related to the Property or the Project, and Owner's provision to Agency c-f full waivers or releases of lien clams if required by Agency. 1422342.2 14 (vii) No material adverse change as determined by Agency in its reasonable judgment shall have occurred in the condition of the Property or in the financial or other condition of Owner since the date of this Agreement. (viii) Owner's delivery to Agency of evidence satisfactory to Agency that Owner has obtained all necessary entitlements, permits (including without limitation building permits), licenses, and approvals required to develop the Project, or that the receipt of such permits is subject only to such conditions as Agency shall reasonably approve. (ix) Owner's delivery to Agency and Agency approval of: (i) performance bonds or other assurance of completion reasonably acceptable to Agency pursuant to the requirements set forth in Section 3.2;1; and (ii) construction schedule for the Project. (xj Agency approval of the Project budget and Financing Plan. (xi) All other sources of financing for the Project shall have closed or shall close concurrently with Agency's initial disbursement of Loan Proceeds, and Owner shall have delivered to Agency evidence reasonably satisfactory to Agency that Owner has secured binding financing commitments for all Project costs. (xii) Agency's receipt of a written requisition from Owner specifying the amount and use of the requested funds, accompanied by copies of third-party invoices, evidence of Owner's payment for services rendered in connection with the Project, and such other documentation as Agency shall reasonably require. 4.6 No Obligation to Disburse Proceeds Upon Default. Notwithstanding any other provision of this Agreement, the Agency shall have no obligation to disburse or authorize the disbursement of any portion of the Loan Proceeds following: (i) the failure of any of Owner's representations and warranties made in this Agreement or in connection with the Loan to be true and correct in all material respects; (ii) the termination of this Agreement by mutual agreement of the Parties; (iii) Transfer of the Property or Improvements without Agency consent pursuant to Section 4.7; (iv) the occurrence of an Event of Default under any Agency Document which remains uncured beyond any applicable cure period, or the existence of any condition, event or act which upon the giving of notice or the passage of time or both would constitute an Event of Default under any Agency Document. 4.7 Prepayment; Acceleration; Limitations on Assi n~nt. (a) Pre~pa.~ Owner shall have the right to prepay the Loan at any time and from time to time, without penalty or premium, provided that any prepayment of principal must be accompanied by interest accrued but unpaid to the date of prepayment. Prepayments shall be applied first to accrued but unpaid interest and then to principal. Any such prepayment l 422342.2 15 shall have no effect upon Owner's obligations under the Regulatory Agreement which shall survive for the full term of the Regulatory Agreement. In no event shall any amount due under the Note become subject to any rights of offset, deduction or counterclaim on the part of Owner. (b) Due On Sale nor Encumbrance. Unless Agency agrees otherwise in writing, the entire unpaid principal balance and all interest and other sums accrued under the Note shall be due and payable upon the Transfer absent the prior written consent of Agency of all or any part of or interest in the Property or Improvements except as otherwise permitted pursuant to this Agreement. (c) Limitations on Assi ng ment. Owner and its principals have represented that they possess the necessary expertise, skill and ability to carry out the Project pursuant to this Agreement. The qualifications, experience, financial capacity and expertise of Owner and its principals are of particular concern to Agency. It is because of these qualifications, experience, financial capacity and expertise that the Agency has entered into this Agreement with Owner. No voluntary or involuntary successor, assignee or transferee of Owner shall acquire any rights under this Agreement absent the advance written consent of Agency, and Agency shall have no obligation to make disbursements o:f Loan Proceeds in the event of a Transfer absent such written consent. ARTICLE V USE OF THE PROPERTY 5.1 Use; Affordable HoL~sin .Owner covenants and agrees for itself and its successors and assigns that the Property shall be used for a mixed use retail and multi-family residential development in compliance with this Agreement, the Regulatory Agreement, and all applicable City zoning and use restrictions. Owner agrees that throughout the term of the Regulatory Agreement not less than ten (10) residential units in the Project shall be rented at affordable rents to households of nc-t more than 120% of Area Median Income, in accordance with the Regulatory Agreement. 5.2 Maintenance. Owner shall at its own expense, maintain the Property, the Improvements and related landscaping and common areas in good physical condition, in good repair, and in decent, safe, sanitary, habitable and tenantable living conditions in conformity with all applicable state, federal, and Local laws, ordinances, codes, and regulations. Without limiting the foregoing, Owner agrees to maintain the Project and the Property (including without limitation, the residential units, common areas, landscaping, driveways, parking areas, and walkways) in a condition free of all waste, nuisance, debris, unmaintained landscaping, graffiti, disrepair, abandoned vehicles/appliances, and illegal activity, and shall take all reasonable steps to prevent the same from occurring on the Property or at the Project. Owner shall prevent and/or rectify any physical deteric-ration of the Property and the Project and shall make all repairs, renewals and replacements necessary to keep the Property and the improvements located thereon in good condition and repair. Owner shall provide adequate security services for occupants of the Project. 1422342.2 16 5.3 Taxes and Assessments. Owner shall pay all real and personal property taxes, assessments and charges and all franchise, income, payroll, withholding, sales, and other taxes assessed against the Property and payable by Owner, at such times and in such manner as to prevent any penalty from accruing, or any lien or charge from attaching to the Property; provided, however, that Owner shall have the right to contest in good faith, any such taxes, assessments, or charges. In the event the Owner exercises its right to contest any tax, assessment, or charge, the Owner, on final determination of the proceeding or contest, shall immediately pay or discharge any decision or judgment rendered against it, together with all costs, charges and interest. 5.4 Obligation to Refrain from Discrimination. Owner shall not restrict the rental, sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, or any portion thereof, on the basis of race., color, religion, creed, sex, sexual orientation, disability, marital status, ancestry, or national origin of any person. Owner covenants for itself and all persons claiming under or through it, and this Agreement is made and accepted upon and subject to the condition that there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases acre defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property or part thereof, nor shall Owner or any person claiming under or through Owner establish or permit any such practice or practices of discriiYiination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in, of, or for the Property or part thereof. Owner shall include such provision in all deeds, leases, contracts and other instruments executed by Owner, and shall enforce the same diligently and in good faith. All deeds, leases or contracts made or entered into by Owner, its successors or assigns, as to any portion of the Property or the Improvements shall contain the following language: (a) In Deeds, the following language shall appear: "(1) Grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through it, that there shall be no discrimination against or segregation of a person or of a 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 Secticns 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the property herein conveyed nor shall the grantee or any person claiming under or through the grantee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the property herein conveyed. The foregoing covenant shall run with the land. "(2) Notwithstanding paragraph (1), with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in 1422342.2 17 Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (1)." (b) In Leases, the following language shall appear: "(1) The lessee herein covenants by and for the lessee and lessee's heirs, personal representatives and assigns, and all persons claiming under the lessee or through the lessee, that this lease is made subject to the condition that there shall be no discrimination against or segregation of any person or of a group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin, ancestry or disability in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the property herein leased nor shall the lessee or any person claiming under or through the lessee establish or permit any such practice or practices of discrimination of segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the property herein leased. "(2) Notwithstanding; paragraph (1), with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (1)." (c) In Contracts, the following language shall appear: "There shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the property nor shall the transferee or any person claiming under or through the transferee establish or permit any such practice or practices of discrimination or segregation with reference to selection, location, number, use or occupancy of tenants, lessee, subtenants, sublessees or vendees of the land." 14223422 18 ARTICLE VI LIMITATIONS ON CHANGE IN OWNERSHIP, MANAGEMENT AND CONTROL OF DEVELOPER 6.1 Change Pursuant to this Agreement. Owner and its principals have represented that they possess the necessary expertise, skill and ability to carry out the rehabilitation of the Improvements pursuant to this Agreement. The qualifications, experience, financial capacity and expertise of Owner and its principals are of particular concern to the Agency. It is because of these qualifications, experience, financial capacity and expertise that the Agency has entered into this Agreement with Owner. No voluntary or involuntary successor, assignee or transferee of Owner shall acquire any rights or powers under this Agreement, except as expressly provided herein. 6.2 Prohibition on Transfer. Prior to the expiration of the term of the Regulatory Agreement, Owner shall not, except: as expressly permitted by this Agreement, directly or indirectly, voluntarily, involuntarily or by operation of law make or attempt any total or partial sale, transfer, conveyance, assignmennt hypothecation, mortgage, pledge, encumbrance or lease (collectively, "Transfer") of the whole or any part of the Property, the Project, the Improvements, or this Agreement, without the prior written approval of Agency, which approval shall not be unreasonably withheld. Any such attempt to assign this Agreement without the Agency's consent shall be null and void and shall confer no rights or privileges upon the purported assignee. In addition to the foregoing, prior to the expiration of the term of the Regulatory Agreement, except as expressly permitted by this Agreement, Owner shall not undergo any significant change of ownership without the prior written approval of Agency. For purposes of this Agreement, a "significant change of ownership" shall mean a transfer of the beneficial interest of more than twenty-five percent (25%) in aggregate of the present ownership and /or control of Owner, taking all transfers into account on a cumulative basis. 6.3 Permitted Transfers. Notwithstanding any contrary provision hereof, the prohibitions set forth in this Article shall not be deemed to prevent: (i) the granting of temporary easements or permits to facilitate df;velopment of the Property; (ii) the dedication of any property required pursuant to this Agreement; (iii) the lease of individual residences to tenants for occupancy as their principal residence in accordance with the Regulatory Agreement or the lease of commercial/retail space within the Project; or (iv) assignments creating security interests for the purpose of financing the acquisiition, construction or permanent financing of the Project or the Property in accordance with the approved Financing Plan, or Transfers directly resulting from the foreclosure of, or granting of a deed in lieu of foreclosure of, such a security interest. 6.4 Requirements for Pr~osed Transfers. The Agency may, in the exercise of its sole discretion, consent to a proposed Transfer of this Agreement, the Property or portion thereof if all of the following requirements are met (provided however, the requirements of this Section 6.4 shall not apply to Transfers described in clauses (i) through (iv) of Section 6.3): (i) The proposed transferee demonstrates to the Agency's satisfaction that it has the qualifications, experience and financial resources necessary and adequate as may be 1422342.2 19 reasonably determined by the Agency to competently complete rehabilitation of the Improvements and to otherwise fulfill the obligations undertaken by the Owner under this Agreement. (ii) The Owner acid the proposed transferee shall submit for Agency review and approval all instruments and other legal documents proposed to effect any Transfer of this Agreement, the Property or interest therein together with such documentation of the proposed transferee's qualifications and development capacity as the Agency may reasonably request. (iii) The proposed transferee shall expressly assume all of the rights and obligations of the Owner under this Agreement and the Agency Documents arising after the effective date of the Transfer and all. obligations of Owner arising prior to the effective date of the Transfer (unless Owner expressly remains responsible for such obligations) and shall agree to be subject to and assume all of Owner's obligations pursuant to the Conditions of Approval and all other conditions, and restrictions set forth in this Agreement and the Regulatory Agreement. (iv) The Transfer shall be effectuated pursuant to a written instrument satisfactory to the Agency in form recordable in the Official Records. Consent to any proposed Transfer may be given by the Agency's Executive Director unless the Executive Director, in his or her discretion, refers the matter of approval to the Agency's governing board. If a proposed Transfer has not been approved by Agency in writing within thirty (30) days following Agency's receipt of written request by Owner, it shall be deemed rejected. 6.5 Effect of Transfer without Agency Consent. 6.5.1 In the absence of specific written agreement by the Agency, no Transfer by Owner shall be deemed to relieve the Owner or any other party from. any obligation under this Agreement. 6.5.2 Without limil:ing any other remedy Agency may have under this Agreement, or under law or equity, it shall be an Event of Default hereunder entitling Agency to terminate this Agreement and/or exercise other remedies available pursuant to the Agency Documents if without the prior written approval of the Agency, Owner assigns or Transfers this Agreement or the Property in violation of this Agreement. This Section 6.5.2 shall not apply to Transfers described in clauses (i) through (iv) of Section 6.3. 6.6 Recovery of Agency Costs. Owner shall reimburse Agency for all Agency costs, including but not limited to reasonable attorneys' fees, incurred in reviewing instruments and other legal documents proposed to affect a Transfer under this Agreement and in reviewing the qualifications and financial resources of a proposed successor, assignee, or transferee within ten (10) days following Agency's delivery to Owner of an invoice detailing such costs. ARTICLE VII Reserved. 1422342.2 20 ARTICLE VIII ENV[RONMENTAL MATTERS 8.1 No Agency Liability; Owner's Covenants. Neither Agency nor City shall be responsible for the cost of any soil, groundwater or other environmental remediation or other response activities for any Hazardous Materials existing or occurring on the Property or any portion thereof, and Owner shall be solely responsible for all actions and costs associated with any such activities required for the development of the Project, the Property, or any portion thereof. Upon receipt of any notice regarding the presence, release or discharge of Hazardous Materials in, on or under the Property, or any portion thereof, Owner (as long as Owner owns the property which is the subject of such notice) agrees to timely initiate and diligently pursue and complete all appropriate response, remediation and removal actions for the presence, release or discharge of such Hazardous Materials within such deadlines as specified by applicable Environmental Laws. Owner hereby covenants and agrees that: (i) Owner shall not knowingly permit the Project or the Property or any portion of either to be a site for the use, generation, treatment, manufacture, storage, disposal or transportation of Hazardous Materials or otherwise knowingly permit the presence or release of Hazardous Materials in, on, under, about or from the Project or the Property with the exception of cleaning supplies and other materials customarily used in construction, operation or maintenance of residential property and any commercial uses developed as part of the Project, and used, stored and disposed of in compliance with Hazardous Materials Laws, and (ii) Owner shall keep and maintain the Project and the Property and each portion thereof in compliance with, and shall not cause or permit the Project or the Property or any portion of either to be in violation of, any Hazardous Materials Laws. 8.2 Environmental Indemnification. Owner shall indemnify, defend (with counsel approved by Agency) and hold the ][ndemnitees harmless from and against any and all Claims including without limitation any expenses associated with the investigation, assessment, monitoring, response, removal, treatment, abatement or remediation of Hazardous Materials and administrative, enforcement or judicial proceedings resulting, arising, or based directly or indirectly in whole or in part, upon (i) the presence, release, use, generation, discharge, storage or disposal or the alleged presence, release, discharge, storage or disposal of any Hazardous Materials on, under, in or about, or the transportation of any such Hazardous Materials to or from, the Property, or (ii) the failure of Owner, Owner's employees, agents, contractors, subcontractors, or any person actin; on behalf of any of the foregoing to comply with Hazardous Materials Laws or the covenants sect forth in Section 8.1. The foregoing indemnity shall further apply to any residual contaminatior.~ in, on, under or about the Property or affecting any natural resources, and to any contamination of any property or natural resources arising in connection with the generation, use, handling, itreatment, storage, transport or disposal of any such Hazardous Materials, and irrespective of whether any of such activities were or will be undertaken in accordance with Hazardous Materials Laws. The provisions of this Section 8.2 shall survive the issuance of a Certificate of Completion for the Project and the expiration or earlier termination of this Agreement. 1422342.2 21 8.2.1 No Limitation- Owner hereby acknowledges and agrees that Owner's duties, obligations and liabilities under this Agreement, including, without limitation, under Section 8.2 above, are in no way limited or otherwise affected by any information the Agency or the City may have concerning the Property and/or the presence in, on, under or about the Property of any Hazardous Material:>, whether the Agency or the City obtained such information from the Owner or from its own investigations. It is further agreed that Agency and City do not and shall not waive any rights against Owner that they may have by reason of this indemnity and hold harmless agreement because of'the acceptance by Agency, or the deposit with Agency by Owner, of any of the insurance policies described in this Agreement. 8.3 Hazardous Materials. As used herein, the term "Hazardous Materials" means any substance, material or waste which is or becomes regulated by any federal, state or local governmental authority, and includes without limitation (i) petroleum or oil or gas or any direct or indirect product or by-product thE;reof; (ii) asbestos and any material containing asbestos; (iii) any substance, material or waste regulated by or listed (directly or by reference) as a "hazardous substance", "hazardous material", "hazardous waste", "toxic waste", "toxic pollutant", "toxic substance", "solid waste" or "pollutant or contaminant" in or pursuant to, or similarly identified as hazardous to human health or the environment in or pursuant to, the Toxic Substances Control Act [15 U.S.C. Section 2601, et seq..]; the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, et seq.], the Hazardous Materials Transportation Authorization Act [4~9 U.S.C. Section 5101, et seq.], the Resource Conservation and Recovery Act [42 U.S.C. Section 6901, et seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251], the Clean Air Act [42 U.S.C. Section 7401, et seq.], the California Underground Storage of Hazardous Substances Act [California Health and Safety Code Section 25280, et seg.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300, et seg.], the California Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enforcement Act [California Health and Safety Code Section 25249.5, et seq.], and the Porter-Cologne Water Quality Control Act [California Water Code Section 13000, et seq.], as they now exist or are hereafter amended, together with anry regulations promulgated thereunder; (iv) any substance, material or waste which is defined as such or regulated by any "Superfund" or "Superlien" law, or any Environmental Law; or (v) any other substance, material, chemical, waste or pollutant identified as hazardous or toxic and regulated under any other federal, state or local environmental law, including without limitation, asbestos, polychlorinated biphenyls, petroleum, natural gas and synthetic fuel products and by-products. 8.4 Environmental Lawsc. As used herein, the term "Environmental Laws" means all federal, state or local statutes, ordinances, rules, regulations, orders, decrees, judgments or common law doctrines, and provisions and conditions of permits, licenses and other operating authorizations regulating, or relating to, or imposing liability or standards of conduct concerning (i) pollution or protection of the environment, including natural resources; (ii) exposure of persons, including employees and agents, to Hazardous Materials (as defined above) or other products, raw materials, chemicals or other substances; (iii) protection of the public health or welfare from the effects of by-products, wastes, emissions, discharges or releases of chemical substances from industrial or commercial activities; (iv) the manufacture, use or introduction into commerce of chemical substances, including without limitation, their manufacture, formulation, labeling, distribution, transportation, handling, storage and disposal; or (iv) the use, release or 1422342.2 22 disposal of toxic or hazardous substances or Hazardous Materials or the remediation of air, surface waters, groundwaters or soil, as now or may at any later time be in effect, including but not limited to the Toxic Substances Control Act [15 U.S.C. Section 2601, et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, et seq.], the Hazardous Materials Transportation Authorization Act [49 U.S.C. Section 5101, et seq.], the Resource Conservation and Recovery Act [42 U.S.C. Section 6901, et seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251], the Clean Air Act [42 U.S.C. Section 7401, et seq.], the California Underground Storage of Hazardous Substances Act [California Health and Safety Code Section 25280, et seq.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300, et seq.], the California Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enforcement Act [California Health and Safety Code Section 25249.5, et seq.], and the Porter-Coaogne Water Quality Control Act [California Water Code Section 13000, et seq.], as each of the foregoing now exist or are hereafter amended, together with any regulations promulgated tr~ereunder. ARTICLE IX DEFAULTS„ REMEDIES AND TERMINATION 9.1 Event of Default. The following events shall constitute an event of default on the part of Owner ("Event of Default"): (a) Owner fails to commence or complete construction of the Project within the times set forth in Section 3.8, or subject to force majeure, abandons or suspends construction of the Project prior to completion for a period of sixty (60) days or more; (b) Owner fails to pay when due the principal and interest (if any) payable under the Note and such failure continues for ten (10) days after Agency notifies Owner thereof in writing; (c) A Transfer occurs, either voluntarily or involuntarily, in violation of Article VI. (d) Owner fails to maintain insurance on the Property and the Project as required pursuant to this Agreement, and Owner fails to cure such default within ten (10) days; (e) Subject to Owner's right to contest the following charges pursuant to Section 5.3, if Owner fails to pay prior to delinquency taxes or assessments due on the Property or the Project or fails to pay when Blue any other charge that may result in a lien on the Property or the Project, and Owner fails to cure such default within thirty (30) days of date of delinquency, but in all events upon the imposition of any such tax or other lien; (f) A default arises under any loan secured by a mortgage, deed of trust or other security instrument recorded against the Property and remains uncured beyond any applicable cure period such that the holder of such security instrument has the right to accelerate repayment of such loan; 1422342.2 23 (g) Any representation or warranty contained in this Agreement or in any application, financial statement, certificate or report submitted to the Agency or the City in connection with this Agreement or Owner's request for the Loan proves to have been incorrect in any material and adverse respect when made and continues to be materially adverse to the Agency or the City; (h) If, pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (`Bankruptcy Law"), Owner (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Owner in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Owner, (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due; (i) A court of competent jurisdiction shall have made or entered any decree or order (1) adjudging the Owner to be bankrupt or insolvent, (2) approving as properly filed a petition seeking reorganization of the Owner or seeking any arrangement for Owner under bankruptcy law or any other applicable debtor's relief law or statute of the United States or any state or other jurisdiction, (3) appointing a receiver, trustee, liquidator, or assignee of the Owner in bankruptcy or insolvency or for any of its properties, or (4) directing the winding up or liquidation of the Owner; (j) Owner shall ]have assigned its assets for the benefit of its creditors (other than pursuant to a mortgage loan) or suffered a sequestration or attachment of or execution on any substantial part of its property, unless the property so assigned, sequestered, attached or executed upon shall have been returned or released within sixty (60) days after such event (unless a lesser time period is permitted for cure under any other mortgage on the Property, in which event such lesser time period. shall apply under this subsection as well) or prior to any sooner sale pursuant to such sequestration, attachment, or execution; (k) The Owner shall have voluntarily suspended its business or Owner shall have been dissolved or terminated; (l) An event of default arises under any Agency Document and remains uncured beyond any applicable curt; period; or (m) Owner defaults in the performance of any term, provision, covenant or agreement contained in this Agreement other than an obligation enumerated in this Section 9.1 and unless a shorter cure period is specified for such default, the default continues for ten (10) days in the event of a monetary default or thirty (30) days in the event of a nonmonetary default after the date upon which Agency shall have given written notice of the default to Owner; provided however, if the default is of a nature that it cannot be cured within thirty (30) days, a Owner Event of Default shall not arise hereunder if Owner commences to cure the default within thirty (30) days and thereafter prosecutes the curing of such default with due diligence and in good faith to completion and in no event later than ninety (90) days after receipt of notice of the default. 1422342.2 24 9.2 Agency Default. An event of default on the part of Agency ("Event of Agency Default") shall arise hereunder if Agency fails to keep, observe, or perform any of its covenants, duties, or obligations under this Agreement, and the default continues for a period of thirty (30) days after written notice thereof from Owner to Agency, or in the case of a default which cannot with due diligence be cured within thirty (30) days, Agency fails to commence to cure the default within thirty (30) days of such notice and thereafter fails to prosecute the curing of such default with due diligence and in good faith to completion. 9.3 Agency's Remedies and Ri h~Upon an Event of Owner Default. Upon the occurrence of an Event of Default and the expiration of any applicable cure period, Agency shall have all remedies available to it undler this Agreement or under law or equity, including, but not limited to the following, and Agency may, at its election, without notice to or demand upon Owner, except for notices or demands required by law or expressly required pursuant to the Agency Documents, exercise one or more of the following remedies: (a) Accelerate ar~d declare the balance of the Note and interest accrued thereon immediately due and payable; (b) Seek specific performance to enforce the terms of the Agency Documents; (c) Foreclose on the Property pursuant to the Deed of Trust; (d) Pursue any and all other remedies available under this Agreement or under law or equity to enforce the terms of the Agency Documents and Agency's rights thereunder. 9.4 Owner's Remedies Upon an Event of Agency Default. Upon the occurrence of an Agency Event of Default, in addition to pursuing any other remedy allowed at law or in equity or otherwise provided in this Agreement, Owner may bring an action for equitable relief seeking the specific performance of the terms and conditions of this Agreement, and/or enjoining, abating, or preventing any violation of such terms and conditions, and/or seeking to obtain any other remedy consistent with the purpose of this Agreement, and may pursue any and all other remedies available under this Agreement or under law or equity to enforce the terms of the Agency Documents and Owner's rights thereunder. 9.5 Remedies Cumulative; No Consequential Damages. Except as otherwise expressly stated in this Agreement, the rights and remedies of the Parties are cumulative, and the exercise by either Party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different time, Hof any other rights or remedies for the same or any other default by the other Party. Notwithstanding anything to the contrary set forth herein, a Party's right to recover damages in the event of a default shall be limited to actual damages and shall exclude consequential damages. 9.6 Inaction Not a Waiver of Default. No failure or delay by either Party in asserting any of its rights and remedies as to any default shall operate as a waiver of such default or of any such rights or remedies, nor deprive either Party of its rights to institute and maintain any action or proceeding which it may deem necessary to protect, assert or enforce any such rights or remedies in the same or any subsequent default. 1422342.2 25 ARTICLE X INDE;NINITY AND INSURANCE. 10.1 Indemnity. Owner shall indemnify, defend (with counsel approved by Agency) and hold Indemnitees harmless from and against any and all Claims, including without limitation, Claims arising directly or indirectly, in whole or in part, as a result of or in connection with Owner's or Owner's contractors, subcontractors, agents or employees development, construction, improvement, operation, ownership or maintenance of the Project or the Property, or any part thereof or otherwise arising out of or in connection with Owner's performance under this Agreement. Owner's indemnification obligations under this Section 10.1 shall not extend to Claims resulting solely from the gross negligence or willful misconduct of Indemnitees. The provisions of this Section 10.1 shall survive the issuance of a Certificate of Completion for the Project and the expiration or earlier termination of this Agreement. It is further agreed that Agency and City do not and shall not waive any rights against Owner that they may have by reason of this indemnity and hold harmless agreement because of the acceptance by Agency, or the deposit with Agency by Owner, of any of the insurance policies described in this Agreement. 10.2 Liabilityand Workers Compensation Insurance. (a) Owner and all contractors working on behalf of Owner on the Project shall maintain a commercial general liability policy in the amount of One Million Dollars ($1,000,000) each occurrence, Two Million Dollars ($2,000,000) annual aggregate, together with Three Million Dollars ($3,000,000) excess liability coverage, or such other policy limits as Agency may require in its reasonablle discretion, including coverage for bodily injury, property damage, products, completed operations and contractual liability coverage. Such policy or policies shall be written on an occurrence basis and shall name the Indemnitees as additional insureds. (b) Owner and all contractors working on behalf of Owner shall maintain a comprehensive automobile liability coverage in the amount of One Million Dollars ($1,000,000), combined single limit including coverage for owned and non-owned vehicles and shall furnish or cause to be furnished to Agency evidence satisfactory to Agency that Owner and any contractor with whom Owner has contracted for the performance of work on the Property or otherwise pursuant to this Agreement carries workers' compensation insurance as required by law. Automobile liability policies shall name the Indemnitees as additional insureds. (c) Upon commencement of construction work and continuing until issuance of a Certificate of Completion, Owner and all contractors working on behalf of Owner shall maintain a policy of builder's all-risk insurance in an amount not less than the full insurable cost of the Project on a replacement cost: basis naming Agency as loss payee. (d) Owner shall maintain property insurance covering all risks of loss (other than earthquake), including flood (if required) for 100% of the replacement value of the Project with deductible, if any, in an amount acceptable to Agency, naming Agency as loss payee. (e) Companies v~riting the insurance required hereunder shall be licensed to do business in the State of California. Insurance shall be placed with insurers with a current 1422342.2 26 A.M. Best's rating of no less than A: VII. The Commercial General Liability and comprehensive automobile policies required hereunder shall name the Indemnitees as additional insureds. Builder's Risk and property insurance shall name Agency and City as loss payees as their interests may appear. (f) Prior to commencement of construction work, Owner shall furnish Agency with certificates of insurance in form acceptable to Agency evidencing the required insurance coverage and duly executed endorsements evidencing such additional insured status. The certificates shall contain a statement of obligation on the part of the carrier to notify City and Agency of any material adverse change, cancellation, termination or non-renewal of the coverage at least thirty (30) days in advance of the effective date of any such material adverse change, cancellation, termination or non-renewal. (g) If any insurance policy or coverage required hereunder is canceled or reduced, Owner shall, within fifteen (15) days after receipt of notice of such cancellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with Agency and City a certificate showing that the required insurance has been reinstated or provided through another insurance company or companies. Upon failure to so file such certificate, Agency or City may, without further notice and at its option, procure such insurance coverage at Owner's expense, and Gwner shall promptly reimburse Agency or City for such expense upon receipt of billing from. Agency or City. (h) Coverage provided by Owner shall be primary insurance and shall not be contributing with any insurance, or >elf-insurance maintained by Agency or City, and the policies shall so provide. The insurance policies shall contain a waiver of subrogation for the benefit of the City and Agency. Owner shall furnish the required certificates and endorsements to Agency prior to the commencement of construction of the Project, and shall provide Agency with certified copies of the required insurance policies upon request of Agency. ARTICLE XI MISCELLANEOUS PROVISIONS 11.1 No Brokers. Each Party warrants and represents to the other that no person or entity can properly claim a right to a real estate commission, brokerage fee, finder's fee, or other compensation with respect to the transactions contemplated by this Agreement. Each Party agrees to defend, indemnify and hold harmless the other Party from any claims, expenses, costs or liabilities arising in connection with a breach of this warranty and representation. The terms of this Section shall survive the expiiration or earlier termination of this Agreement. 11.2 Enforced Dela.~tf.nsion of Times of Performance. Subject to the limitations set forth below, performance by either Party shall not be deemed to be in default, and all performance and other dates specified in this Agreement shall be extended where delays are due to: war, insurrection, strikes, lockouts, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics, quarantine restrictions, freight embargoes, governmental restrictions or priority, litigation, including court delays, unusually severe weather, acts or omissions of the other Party, acts or failures to act of the City or any other public or 1422342.2 27 governmental agency or entity (other than the acts or failures to act of Agency which shall not excuse performance by Agency), or~ any other cause beyond the affected Party's reasonable control. An extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from thf; time of the commencement of the cause, if notice by the Party claiming such extension is sent to the other Party within thirty (30) days of the commencement of the cause and such extension is not rejected in writing by the other Party within ten (10) days of receipt of the notice. Neither Party shall unreasonably withhold consent to an extension of time pursuant to this Section. Times of performance under this Agreement may also be extended in writing by the mutual agreement of Owner and A€;ency (acting in the discretion of its Executive Director unless he or she determines in his or her diiscretion to refer such matter to the governing board of the Agency). Agency and Owner acknowledge that adverse changes in economic conditions, either of the affected Party specifically or the economy generally, changes in market conditions or demand, and/or inability to obtain financing to complete the work of Improvements shall not constitute grounds of enforced delay pursuant to this Section. Each Party expressly assumes the risk of such adverse economic or market changes and/or financial inability, whether or not foreseeable as of the Effective Date. 11.3 Notices. Except as otherwise specified in this Agreement, all notices to be sent pursuant to this Agreement shall be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other Parties in accordance with this Section. All such notices shall be sent by: (i) personal delivery, in which case notice is effective upon delivery; (ii) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered on receipt if delivery is confirmed by a return receipt; (iii) nationally recognized overnight courier, with charges prepaid or charged to the sender's account, in which case notice is effective on delivery if delivery is confirmed by the delivery service; (iv) facsimile transmission, in which case notice shall be deemed delivered upon transmittal, provided that (a) a duplicate copy of the notice is promptly delivered by first- class or certified mail or by overni€;ht delivery, or (b) a transmission report is generated reflecting the accurate transmission thereof. Any notice given by facsimile shall be considered to have been received on the next business day if it is received after 5:00 p.m. recipient's time or on a nonbusiness day. Agency: Redevelopment Agency of the City of South San Francisco 400 Grand Avenue South San F~°ancisco, CA 94080 Attention: Executive Director Facsimile: 6:50-829-6623 1422342.2 28 Owner: Giffra Enterprises, LLC 240 Grand Avenue South San Francisco, CA 94080 Attention: Greg Giffra Facsimile: 650-239-3604 With copy to: Ronald P. Albert Attorney At L,aw 66 George Lane, Suite 101 Sausalito, CA 94965 Facsimile: 415-332-9216 11.4 Attorneys' Fees. If either Party fails to perform any of its obligations under this Agreement, or if any dispute arises between the Parties concerning the meaning or interpretation of any provision hereof, then the prevailing Party in any proceeding in connection with such dispute shall be entitled to the costs and expenses it incurs on account thereof and in enforcing or establishing its rights hereunder, including, without limitation, court costs and reasonable attorneys' fees and disbursements. 11.5 Waivers; Modification. No waiver of any breach of any covenant or provision of this Agreement shall be deemed a waiver of any other covenant or provision hereof, and no waiver shall be valid unless in writing and executed by the waiving Party. An extension of time for performance of any obligation oar act shall not be deemed an extension of the time for performance of any other obligation or act, and no extension shall be valid unless in writing and executed by the Party granting the extension. This Agreement may be amended or modified only by a written instrument executed by the Parties. 11.6 Binding on Successors. Subject to the limitations set forth in Article 6, this Agreement shall bind and inure to the benefit of the Parties and their respective permitted successors and assigns. Any reference in this Agreement to a specifically named Party shall be deemed to apply to any permitted successor and assign of such Party who has acquired an interest in compliance with this Agreement or under law. 11.7 Survival. All representations made by Owner hereunder and Owner's obligations pursuant to Sections 3.3, 3.14, 3.17, 3.18, 8.2, 10.1, 11.1, and 11.18 shall survive the expiration or termination of this Agreement and the issuance and recordation of a Certificate of Completion. 11.8 Construction. The section headings and captions used herein are solely for convenience and shall not be used to interpret this Agreement. The Parties acknowledge that this Agreement is the product of negotiation and compromise on the part of both Parties, and the Parties agree, that since both Parties have participated in the negotiation and drafting of this 1422342.2 29 Agreement, this Agreement shall not be construed as if prepared by one of the Parties, but rather according to its fair meaning as a whole, as if both Parties had prepared it. 11.9 Action or Approval. Whenever action and/or approval by Agency is required under this Agreement, Agency's Executive Director or his or her designee may act on and/or approve such matter unless specifically provided otherwise, or unless the Executive Director determines in his or her discretion that such action or approval requires referral to Agency's Board for consideration. 11.10 Entire Agreement. This Agreement, including Exhibits A through H attached hereto and incorporated herein by this reference, together with the other Agency Documents contains the entire agreement between the Parties with respect to the subject matter hereof, and supersedes all prior written or oral agreements, understandings, representations or statements between the Parties with respect to the subject matter hereof. 11.11 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be an original and all of which taken together shall constitute one instrument. The signature page of any counterpart may be detached therefrom without impairing the legal effect of the signature(s) thereon provided such signature page is attached to any other counterpart identical thereto having additional signature pages executed by the other Party. Any executed counterpart of this Agreement may be delivered to the other Party by facsimile and shall be deemed as binding as if an originally signed counterpart was delivered. 11.12 Severability. If any term, provision, or condition of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall continue in full force and effect unless an essential purpose of this Agreement is defeated by such invalidity or unenforceability. 11.13 No Third Party Beneficiaries. Nothing contained in this Agreement is intended to or shall be deemed to confer upon a:ny person, other than the Parties and their respective successors and assigns, any rights oar remedies hereunder. l 1.14 Parties Not Co-Venturers. Nothing in this Agreement is intended to or shall establish the Parties as partners, co=venturers, or principal and agent with one another. 11.15 Non-Liability of Officials, Employees and A eg nts. No officer, official, employee or agent of Agency or City shall be personally liable to Owner or its successors in interest in the event of any default or breach by Agency or for any amount which may become due to Owner or its successors in interest pursuant to this Agreement. 11.16 Time of the Essence: Calculation of Time Periods. Time is of the essence for each condition, term, obligation anal provision of this Agreement. Unless otherwise specified, in computing any period of time described in this Agreement, the day of the act or event after which the designated period of time begins to run is not to be included and the last day of the period so computed is to be included, unless such last day is not a business day, in which event the period shall run until the next business day. The final day of any such period shall be deemed to end at 5:00 p.m., local time at the Property. For purposes of this Agreement, a 1422342.2 30 "business day" means a day that is not a Saturday, Sunday, a federal holiday or a state holiday under the laws of California. 11.17 Governing Law; Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to principles of conflicts of laws. Any action to enforce or interpret this Agreement shall be filed in the Superior Court of San Mateo County, California or in the Federal District Court for the Northern District of California. 11.18 General Indemnifical:ion. Owner shall indemnify, defend (with counsel approved by Agency) and hold harmless Inde~nnitees from all Claims (including without limitation, reasonable attorneys' fees) arising in connection with any claim, action or proceeding to attack, set aside, void, or annul any approval by the City or the Agency or any of its agencies, departments, commissions, agents, officers, employees or legislative body concerning the Project or this Agreement. The Agency will promptly notify Owner of any such claim, action or proceeding, and will cooperate fully in the defense. The Agency and City may, within the unlimited discretion of each, participate in the defense of any such claim, action or proceeding, and if the Agency or City chooses to do so, Owner shall reimburse Agency and City for reasonable attorneys' fees and expenses incurred. SIGNA~~URES ON FOLLOWING PAGE. 1422342.2 31 IN WITNESS WHEREOF, the Parties have entered into this Agreement effective as of the date first written above. AGENCY REDEVELOPMENT AGENCY OF' THE CITY OF SOUTH SAN FRANCISCO, a public body corporate and politic By: Name: Title: ATTEST: By: Agency Secretary APPROVED AS TO FORM: By: Agency Counsel OWNER GIFFRA ENTERPRISES, LLC, a California limited liability company By: Name: Title: 1422342.2 32 Exhibit A LEGAL DESCRIPTION OF PROPERTY (Attach legal description.) Exhibit B FINANCING PLAN (Attach Project Financing Plan.) Exhibit C FORM OF MEMORANDUM OF OWNER PARTICIPATION AGREEMENT (Attach form of Memorandum.) Exhibit D FORM OF CERTIFICATE OF COMPLETION (Attach form of Certificate.) Exhibit E FORM OF PROMISSORY NOTE (Att<~ch form of Promissory Note.) Exhibit F FORM OF DEED OF TRUST (Attach form of Deed of Trust.) Exhibit G FORM OF REGiJLATORY AGREEMENT AND NOTICE (Attach form of Regulatory Agreement and Notice.) 1422342.2 33 Recording Requested by and when Recorded, return to: Redevelopment Agency of the City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: Executive Director EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE §§6103, 27383 (SPACE ABOVE THIS LINE RESERVED FOR RECORDER'S USE) MEMORANDUM OF OWNER PARTICIPATION AND LOAN AGREEMENT This Memorandum of Owner Participation and Loan Agreement (this "Memorandum") dated as of , 2010, is entered into by and between the Redevelopment Agency of the City of South San Francisco, a public body, corporate, and politic ("Agency") and Giffra Enterprises, LLC, a California limited liability company ("Owner"). Agency and Owner are hereinafter collectively referred to as the "Parties." 1. Consistent with California Community Redevelopment Law (Health & Safety Code Section 33000 et seq.) and the Redevelopment Plan for the Downtown Redevelopment Project Area ("Project Area"), thE~ Parties have entered into that certain Owner Participation and Loan Agreement dated as of the date hereof (the "OPA"), pursuant to which Owner has agreed to rehabilitate certain real property (the "Property") located within the Project Area and more particularly described in Exhibit A attached hereto and incorporated herein by this reference. 2. Among other conditions, the OPA provides that by not later than twenty-four (24) months following the Effective Date of the OPA, Owner shall have completed rehabilitation of the Improvements located on the Property as a mixed-used project including ten (10) residential units that will be rented to eligible households whose incomes are less than or equal to one hundred twenty percent (120%) of Area Median Income pursuant to the terms of the OPA and a Regulatory Agreement and Declaration of Restrictive Covenants executed by the Parties ("Regulatory Agreement") which shall be recorded in Official Records of San Mateo County substantially concurrently herewith. 3. The OPA further provides that (i) except as permitted by the OPA, Owner shall not voluntarily or involuntarily make or attempt any total or partial sale, transfer, conveyance, assignment or lease of the wholes or any part of the Property or the improvements located thereon without the prior written <~pproval of the Agency; and (ii) any transferee of all or part of the Property shall be subject to and shall expressly assume all of the covenants, obligations and restrictions of the' OPA which pertain to the portion of the Property transferred, including without limlitation, the provisions of the Regulatory Agreement. 4. The Parties have executed and recorded this instrument to give notice of the OPA and the Regulatory Agreement, and the respective rights of the Parties thereunder. Copies of the unrecorded OPA are available at the offices of the Agency, 400 Grand Avenue, South San Francisco, California, and such document is incorporated by reference in its 1422348-2 entirety in this Memorandum. This Memorandum is solely for recording purposes and shall not be construed to alter, modify, amend or supplement the OPA. In the event of any inconsistency between this Memorandum and the OPA, the OPA shall control. 5. This Memorandum shall be interpreted and enforced in accordance with California law without regard to principles of conflict of laws. This Memorandum may be executed in counterparts. 6. The OPA shall bind and inure to the benefit of the Parties and their respective successors and assigns. SIGNA,TURFS ON FOLLOWING PAGE 1422348-2 IN WITNESS WHEREOF,. the parties hereto have executed this Memorandum as of the date first set forth above. AGENCY REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO, A PUBLIC BODY CORPORATE AND POLITIC By: Name: Title: ATTEST: By: Agency Secretary APPROVED AS TO FORM: By: OWNER Agency Counsel GIFFRA ENTERPRISES, LLC, a California limited liability company By: Name: Title: SIGNATURES MUST BE NOTARIZED. 1422348-2 Exhibit A PROPERTY (~~ttach legal description.) 1422348-2 STATE OF CALIFORNIA ) COUNTY OF SAN MATED) On , 20 ,before me, , (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 (Seal) STATE OF CALIFORNIA ) COUNTY OF SAN MATED) On , 20 ,before me, , (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/thE~ir authorized capacity(ies), and that by his/her/their signature(s) on the instrument tree 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) 1422348-2 5 SECURED PROMISSORY NOTE $2,500,000 South San Francisco, California 2010 FOR VALUE RECEIVED, the undersigned, Giffra Enterprises, LLC, a California limited liability company ("Borrovi-er") promises to pay to the Redevelopment Agency of the City of South San Francisco, a public body, corporate and politic ("Agency"), in lawful money of the United States of America, the principal sum of Two Million Five Hundred Thousand Dollars ($2,500,000), or so much thereof as may be advanced by Agency pursuant to the Owner Participation and Loan Agreement referred to below, together with interest on the outstanding principal balance in accordance with the terms and conditions described herein. This Secured Promissory Note (this "Note") has been executed and delivered pursuant to an Owner Participation and Loan Agreement dated as of the date hereof by and between Borrower and Agency (the "Loan Agreement"), and is subject to the terms and conditions of the Loan Agreement, which are by this reference incorporated herein and made a part hereof. Capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Loan Agreement. This Note is secured by a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing ("Deed of Trust") dated as of the date hereof, executed by Borrower for the benefit of Agency and encumbering the property described therein. Agency shall be entitled to the bE~nefits of the security provided by the Deed of Trust and shall have the right to enforce the covenants and agreements contained herein, in the Deed of Trust, and the Loan Agreement. 1. INTEREST RATE; REPA`~(MENT. Interest shall accrue on the outstanding principal balance of this Note as described in this Section. Interest shall be calculated on the basis of a year of 365 days, and charged for the actual number of days elapsed. No interest shall accrue during the first two (2) years of the term of this Note, commencing upon the origination date. Commencing upon the second (2nd) anniversary of the origination datte (i.e., June , 2012 -- the "Interest Commencement Date"), the outstanding principal balance of this Note will bear interest at three percent (3%) sinnple annual interest. On the eighth (8t") anniversary of the Interest Commencement Dai:e (the "First Interest Increase Date"), the annual rate of interest shall increase by one percent (1 %). On each fifth (5t") anniversary of the First Interest Increase Date, the annual rate of interest shall increase by one percent (1 %). In summary, the following interest rates shall apply: Years 1-2 (July 1, 2010 -June 30, 2012): No interest 1422346-2 Years 3-10 (July 1, 2012 -June 30, 2020): 3% interest Years 11-15 (July 1, 2020 -June 30, 2025): 4% interest Years 16-20 (July 1, 202:5 -June 30, 2030): 5% interest Years 21-25 (July 1, 2030 -June 30, 2035): 6% interest Years 26-30 (July 1, 2035 -June 30, 2040): 7% interest 2. PAYMENT DATES; MATURITY DATE. No payments will be due during the first two (2) years of the term of this Note. Commencing upon the first day of the first month following the Interest Commencement Date (defined in Section 1 above), monthly payments will be due and payablle in accordance with this Section 2. The entire outstanding principal balance of this Note, together with accrued interest and all other sums accrued hereunder shall be payable in full on the thirtieth (30th) anniversary of the date of this Note (the "Maturity Date"). Payments shall be credited first to any unpaid late charges and other costs andl fees then due, then to accrued interest, and then to principal. In no event shall any amount due under this Note become subject to any rights, offset, deduction or counterclaim on the part of Borrower. 3. DUE ON SALE OR DEFAULT. The entire unpaid principal balance and all sums accrued hereunder shall be immediately due and payable upon the Transfer (as defined in Section 6.2 of the Loan Agreement) absent Agency consent, of all or any part of the Property or the Improvements, or any interest therein, or upon the occurrence of an Event of Default under the Agency Documents, subject to the expiration of any applicable cure period. Without limiting the generality of the foregoing, this Note shall not be assumable without Agenc:y's prior written consent, which consent may be granted or denied in Agency's sole discretion. 4. PREPAYMENT. BorrowE~r may, without premium or penalty, at any time and from time to time, prepay all or any portion of the outstanding principal balance due under this Note. Prepayments shall be applied first to any unpaid late charges and other costs and fees then due, then to accrued but unpaid interest, and then to principal. 5. MANNER OF PAYMENT.. All payments on this Note shall be made to Agency at 400 Grand Avenue, South San F=rancisco, CA 94080 or such other place as Agency shall designate to Borrower in writing, or by wire transfer of immediately available funds to an account designated by Agency in writing. 6. EVENTS OF DEFAULT. The occurrence of any one or more of the following events shall constitute an event of default hereunder ("Event of Default"): 1422346-2 2 (a) Borrower fails to pay when due the principal and interest payable hereunder and such failure continues for ten (10) days after Agency notifies Borrower thereof in writing. (b) Borrower fails to rr~aintain insurance on the Property and the Project as required pursuant to the Agency Documents and Borrower fails to cure such default within 10 days. (c) Pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors ("Bankruptcy Law"), Borrower: (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Borrower in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Borrower; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due. (d) A court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against Borrower in an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for Borrower or substantially all of Borrower's assets, (iii) orders the liquidation of Borrower, or (iv) issues or levies a judgment, writ, warrant of attachment or similar process against the Property or the Project, and in each case the order or decree is not released, vacated, dismissed or fully bonded within 60 days afterr its issuance. (e) Borrower shall have assigned its assets for the benefit of its creditors (other than pursuant to a mortgage loan) or suffered a sequestration or attachment of or execution on any substantial part of its property, unless the property so assigned, sequestered, attached or executed upon shall have been returned or released within sixty (60) days after such event (unless a lesser time period is permitted for cure under any other mortgage on the Property, in which event such lesser time period shall apply under this subsection as well) oir prior to any sooner sale pursuant to such sequestration, attachment, or execution; (f) Borrower shall have voluntarily suspended its business or Borrower shall have been dissolved or terminai:ed; (g) A default arises under any debt instrument secured by a mortgage or deed of trust on the Property and remains uncured beyond any applicable cure period such that the holder of such instrument has the right to accelerate payment thereunder. (h) Subject to Borrower's right to contest the following charges pursuant to the Agency Documents, if Borrower fails to pay prior to delinquency taxes or assessments due on the Property or the ProjE~ct or fails to pay when due any other charge that may result in a lien on the Property o~r the Project, and Borrower fails to cure such default within thirty (30) days of date of delinquency, but in all events upon the imposition of any such tax or other lien. 1422346-2 3 (i) Any representation or warranty contained in this Agreement or any application, financial statement, certificate or report furnished in connection with the Loan or in connection with any rE~quest for disbursement of Loan Proceeds proves to have been false or misleading in any material adverse respect when made. (j) Borrower defaults iin the performance of any term, provision, covenant or agreement (other than an obligation enumerated in this Section 6 contained in this Note or in any other Loan Document, and unless such document specifies a different cure period for such default, the default continues for ten (10) days in the event of a monetary default or thirty (30) days in the event of a nonmonetary default after the date upon which Agency shall have given written notice of the default to Borrower (or such longer time as Agency may agree upon in writing), provided that in each case Borrower commences to cure the default within thirty (30) days and thereafter prosecutes the curing of such default with due diligence and in good faith. 7. REMEDIES. Upon the occurrence of an Event of Default hereunder, Agency may, at its option (i) by written notice to Borrower, declare the entire unpaid principal balance of this Note, together wiirh all accrued interest thereon and all sums due hereunder, immediately due and payable regardless of any prior forbearance, (ii) exercise any and all rights and rE~medies available to it under applicable law, and (iii) exercise any and all rights and rE~medies available to Agency under this Note and the other Agency Documents, including without limitation the right to pursue foreclosure under the Deed of Trust. Borrov~rer shall pay all reasonable costs and expenses incurred by or on behalf of Agen~:,y including, without limitation, reasonable attorneys' fees, incurred in connection with Agency's enforcement of this Note and the exercise of any or all of its rights and remedies hereunder and all such sums shall be a part of the indebtedness secured by the Deed of Trust. 8. DEFAULT RATE. Upon the occurrence of an Event of Default, interest shall automatically be increased without notice to the rate of ten percent (10%) per annum (the "Default Rate"); provided however, if any payment due hereunder is not paid when due, the Default Rate shall apply commencing upon the due date for such payment. When Borrower is no longer in default, the Default Rate shall no longer apply, and the interest rate shall once again be the rate specified in the first paragraph of this Note. Notwithstanding the foregoing provisions, if the interest rate charged exceeds the maximum legal rate of interest, tlhe rate shall be the maximum rate permitted by law. The imposition or acceptance of the Default Rate shall in no event constitute a waiver of a default under this Note or prevent Agency from exercising any of its other rights or remedies. 9. MISCELLANEOUS 9.1 WAIVER. The rights and remedies of Agency under this Note shall be cumulative and not alternative. IVo waiver by Agency of any right or remedy under this Note shall be effective unless in a writing signed by Agency. Neither the failure nor any delay in exercising any right, power or privilege under this Note will operate as a waiver 1422346-2 4 of such right, power or privilege, and no single or partial exercise of any such right, power or privilege by Agency will) preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege. To the maximum extent permitted by a~-plicable law (a) no claim or right of Agency arising out of this Note can be discharged by Agency, in whole or in part, by a waiver or renunciation of the claim or right unless in a writing, signed by Agency; (b) no waiver that may be given by Agency will be applicable except in the specific instance for which it is given; and (c) no notice to or' demand on Borrower will be deemed to be a waiver of any obligation of Borrower or of irhe right of Agency to take further action without notice or demand as provided in this Note. Borrower hereby waives presentment, demand, protest, notices of dishonor and of protest and all defenses and pleas on the grounds of any extension or extensions of the time of payment or of any due date under this Note, in whole or in part, whether before or after maturity and with or without notice. 9.2 NOTICES. Any notice required or permitted to be given hereunder shall be given in accordance with Section 11.3 of the Loan Agreement. 9.3 SEVERABILITY. I~f any provision in this Note is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Note will remain in full force and effect. Any provision of this Note held invalid or unenforceable only in part or decaree will remain in full force and effect to the extent not held invalid or unenforceable. 9.4 GOVERNING LAV~J; VENUE. This Note shall be governed by the laws of the State of California without regard to principles of conflicts of laws. All persons and entities in any manner obligated under this Note consent to the jurisdiction of any federal or state court having in the jurisdiction in San Mateo County, California. 9.5 PARTIES IN INTEIREST. This Note shall bind Borrower and its successors and assigns and shall accrue to the benefit of Agency and its successors and assigns. 9.6 SECTION HEADINGS, CONSTRUCTION. The headings of Sections in this Note are provided for convenience only and will not affect its construction or interpretation. 9.7 RELATIONSHIP C)F THE PARTIES. The relationship of Borrower and Agency under this Note is solely that of borrower and lender, and the loan evidenced by this Note and secured by the Deed of Trust will in no manner make Agency the partner or joint venturer of Borrower. 9.8 TIME IS OF THE E=SSENCE. Time is of the essence with respect to every provision of this Note. 9.9 JOINT AND SEVERAL OBLIGATION. If Borrower consists of two or more individuals, the obligations of such individuals hereunder shall be joint and several. 1422346-2 5 IN WITNESS WHEREOF, Borrower has executed and delivered this Note as of the date first written above. BORROWER GIFFRA ENTERPRISES, LLC, a California limited liability company By: Name: Title: 1422346-2 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Redevelopment Agency of the City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: Executive Director EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE §§6103, 27383 Space above this line for Recorder's use. DEED OF 'T'RUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING ("Deed of Trust") is made as of , 2010, by Giffra Enterprises, LLC, a California limited liability company ("Trustor") to Title Company as trustee ("Trustee"), for the benefit of the Redevelopment Agency of the City of South San Francisco, a public body., corporate, and politic ("Beneficiary"). RECITALS A. Trustor owns fee simple title to the land described in Exhibit A attached hereto and incorporated herein by this reference (the "Land"). The Land is located within the Downtown Redevelopment Project Area ("Project Area"). Trustor intends to rehabilitate, own and operate amixed-use commercial/retail and affordable multifamily residential development (the "Project") on the Land. B. Beneficiary and Trustor have entered into an Owner Participation and Loan Agreement dated as of the date hereof (the "OPA") pursuant to which Beneficiary will provide a loan to Trustor in the amount of Tvvo Million Five Hundred Thousand Dollars ($2,500,000) (the "Loan") for the purpose of partially financing the Project. Trustor has issued to Beneficiary a secured promissory note dated as of the date hereof (the "Note") to evidence Trustor's obligation to repay the Loan. A Memorandurr~ of the OPA will be recorded in the Official Records of San Mateo County concurrently herewith. C. As a condition precedent to the making of the Loan, Beneficiary has required that Trustor enter into this Deed of Trust and grant to Trustee for the benefit of Beneficiary, a lien and security interest in the Property (defined below) to secure repayment of the Note and performance of Trustor's obligations under the OPA and under the Loan Documents (defined below). NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed as follows. Grant in Trust. In consideraltion of the foregoing and for the purpose of securing payment 1422350-2 and performance of the Secured Obligations defined and described in Section 2, Trustor hereby irrevocably and unconditionally grants, conveys, transfers and assigns to Trustee, in trust for the benefit of Beneficiary, with power of sale and right of entry and possession, all estate, right, title and interest which Trustor now has or may later acquire in and to the Land, and all of the following, whether presently owned or hereafter acquired: a. All buildings, structures, and improvements, now or hereafter located or constructed on the Land ("Improvements"); b. All appurtenances, easements, rights of way, pipes, transmission lines or wires and other rights used in connection with the Land or the Improvements or as a means of access thereto, whether now or hereafter owned or constructed or placed upon or in the Land or Improvements and all existing and future privileges, rights, franchises and tenements of the Land, including all minerals, oils, gas and other commercially valuable substances which may be in, under or produced from any part of the Land, and all water rights, rights of way, gores or strips of land, and any land lying in the streets, ways, and alleys, open or proposed, in front of or adjoining the Land and Improvements (collectively, "Appurtenances"); c. All machinery, equi~-ment, fixtures, goods and other personal property of the Trustor, whether moveable or not, now owned or hereafter acquired by the Trustor and now or hereafter located at or used in connection with the Land, the Improvements or Appurtenances, and all improvements, restorations, replacements, repairs, additions or substitutions thereto (collectively, "Equipment"); d. All existing and future leases, subleases, licenses, and other agreements relating to the use or occupancy of all or any portion of the Land or Improvements (collectively, "Leases"), all amendments, extensions, renewals or modifications thereof, and all rent, royalties, or other payments which may now or hereafter accrue or otherwise become payable thereunder to or for the benefit of Trustor, including but: not limited to security deposits (collectively, "Rents"); e. All insurance proceeds and any other proceeds from the Land, Improvements, Appurtenances, Equipment, Leases., and Rents, including without limitation, all deposits made with or other security deposits given to utility companies, all claims or demands relating to insurance awards which the Trustor now has or may hereafter acquire, including all advance payments of insurance premiums made by Trustor, and all condemnation awards or payments now or later made in connection with any condemnation or eminent domain proceeding ("Proceeds"); f. All revenues, income, rents, royalties, payments and profits produced by the Land, Improvements, AppurtenancEs and Equipment, whether now owned or hereafter acquired by Trustor ("Gross Revenues"); g. All architectural, structural and mechanical plans, specifications, design documents and studies produced in connection with development of the Land and construction of the Improvements (collectively, "Pllans"); and 1422350-2 2 h. All interests and rights in any private or governmental grants, subsidies, loans or other financing provided in connection with development of the Land and construction of the Improvements (collectively, "Financing"). All of the above-referenced interests of Trustor in the Land, Improvements, Appurtenances, Equipment, Leases, Rents, Proceed;;, Gross Revenues, Plans and Financing as hereby conveyed to Trustee or made subject to the security interest herein described are collectively referred to herein as the "Property." 2. Obligations Secured. This Deed of Trust is given for the purpose of securing payment and performance of the following (c;ollectively, the "Secured Obligations"): (i) all present and future indebtedness evidenced by the Note and any amendment thereof, including principal, interest and all other amounts payalr-le under the terms of the Note; (ii) all present and future obligations of Trustor to Beneficiary under the Loan Documents (defined below); (iii) all additional present and future obligations of Trustor to Beneficiary under any other agreement or instrument acknowledged by Trustor (whether existing now or in the future) which states that it is or such obligations are, secured by this Deed of Trust; (iv) all obligations of Trustor to Beneficiary under all modifications., supplements, amendments, renewals, or extensions of any of the foregoing, whether evidenced b.y new or additional documents; and (v) reimbursement of all amounts advanced by or on behalf of Beneficiary to protect Beneficiary's interests under this Deed of Trust or any other Loan Document as such may be modified, supplemented, amended, renewed or extended. The Note, thc; OPA, this Deed of Trust, and the Affordable Housing Regulatory Agreement and. Declaration of Restrictive Covenants ("Regulatory Agreement") dated as of the date hereof, executed by and between Trustor and Beneficiary and recorded substantially concurrently herewith are hereafter collectively referred to as the "Loan Documents." 3. Assignment of Rents, Issues,, and Profits. Trustor hereby irrevocably, absolutely, presently and unconditionally assigns to Beneficiary the Rents, royalties, issues, profits, revenue, income and proceeds of the Property. This is an absolute assignment and not an assignment for security only. Beneficiary hereby confers upon Trustor a license to collect and retain such Rents, royalties, issues, profits, revenue, income and proceeds as they become due and payable prior to any Event of Default hereunder. Ulaon the occurrence of any such Event of Default, Beneficiary may terminate such license without notice to or demand upon Trustor and without regard to the adequacy of any security for the indebtedness hereby secured, and may either in person, by agent, or by a receiver to be appointed by a court, enter upon and take possession of the Property or any part thereof, and sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorneys' fees, to any indebtedness secured hereby, and in such order as Beneficiary may determine. Beneficiary's right to the rents, royalties, issues, profits, revenue, income and proceeds of the Property does not depend upon whether or not Beneficiary takes possession of the Property. The entering upon and taking possession of the Property, the collection of such rents, issues, and profits, and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. If an Event of Default occurs while Beneficiary is in possession of all or part of the Property and/or is collecting and applying Rents as permitted under this Deed of Trust, Beneficiary, Trustee and any receiver shall nevertheless be entitled to exercise and invoke every 1422350-2 3 right and remedy afforded any of them under this Deed of Trust and at law or in equity, including the right to exercise the power of sale granted hereunder. Regardless of whether or not Beneficiary, in person or by agent, takes actual possession of the Land or the Improvements, Beneficiary shall not be deemed to be a "mortgagee in possession," shall not be responsible for performing any obligation of Trustor under any Lease, shall not be liable in any manner for the Property, or the use, occupancy, enjoyment or operation of any part of it, and shall not be responsible for any waste committed by Trustor, lessees or any third parties, or for dangerous or defective condition of the Property or any negligence in the management, repair or control of the Property. Absent Beneficiary's written consent, Trustor shall not accept prepayment of Rents for any rental period exceeding one month. 4. Securit~Agreement. The parties intend for this Deed of Trust to create a lien on the Property, and an absolute assignment of the Rents and Leases, all in favor of Beneficiary. The parties acknowledge that some of the Property may be determined under applicable law to be personal property or fixtures. To the extent that any Property may be or be determined to be personal property, Trustor as debtor hereby grants to Beneficiary as secured party a security interest in all such Property to secure payment and performance of the Secured Obligations. This Deed of Trust constitutes a security agreement under the California Uniform Commercial Code, as amended or recodified from time to time (the "UCC"), covering all such Property. To the extent such Property is not real property encumbered by the lien granted above, and is not absolutely assigned by the assignment set forth above, it is the intention of the parties that such Property shall constitute "proceeds, products, offspring, rents, or profits" (as defined in and for the purposes of Section 552(b) of the United States Bankruptcy Code, as such section may be modified or supplemented) of the Land and Improvements. 5. Financing Statements. Pursuant to the UCC, Trustor, as debtor, hereby authorizes Beneficiary, as secured party, to filc; such financing statements and amendments thereof and such continuation statements with respect thereto as Beneficiary may deem appropriate to perfect and preserve Beneficiary's security interest in the Property and Rents, without requiring any signature or further authorization by Trustor. If requested by Beneficiary, Trustor shall pay all fees and costs that Beneficiary may incur in filing such documents in public offices and in obtaining such record searches as Beneficiary may reasonably require. If any financing statement or other document is filed in the records normally pertaining to personal property, that filing shall not be construed as in any way derogating from or impairing this Deed of Trust or the rights or obligations of the parties under it. Everything used in connection with the Property and/or adapted for use therein and/or which is described or reflected in this Deed of Trust is, and at all times and for all purposes and in all proceedings both legal or equitable shall be regarded as part of the estate encumbered by this Deed of Trust irrespective of whether (i) any such item is physically attached to the Improvements, (ii) serial numbers are used for the better identification of certain equipment items capable of being thus identified in a recital contained herein or in any list filed with Beneficiary, or (iii) any such item is referred to or reflected in any such financing statement so filed at any time. Similarly, the mention in any such financing statement of (1) rights in or to the proceeds of any fire and/or hazard insurance policy, or (2) any award in eminent domain proceedings for a taking or for lessf;ning of value, or (3) Trustor's interest as lessor in any present or future lease or rights to income growing out of the use and/or occupancy of the property i422g5o-2 4 conveyed hereby, whether pursuant to lease or otherwise, shall not be construed as in any way altering any of the rights of Beneficiiary as determined by this instrument or impugning the priority of Beneficiary's lien granted hereby or by any other recorded document. Such mention in any financing statement is declarc;d to be solely for the protection of Beneficiary in the event any court or judge shall at any time hold, with respect to the matters set forth in the foregoing clauses (1), (2), and (3), that notice of Beneficiary's priority of interest is required in order to be effective against a particular class of persons, including but not limited to the federal government and any subdivisions or entity of the federal government. 6. Fixture Filing. This Deed of Trust is intended to be and constitutes a fixture filing pursuant to the provisions of the UC'C with respect to all of the Property constituting fixtures, is being recorded as a fixture financing statement and filing under the UCC, and covers property, goods and equipment which are or are to become fixtures related to the Land and the Improvements. Trustor covenants and agrees that this Deed of Trust is to be filed in the real estate records of San Mateo County and shall also operate from the date of such filing as a fixture filing in accordance with Section 9502 and other applicable provisions of the UCC. This Deed of Trust shall also be effective as a financing statement covering minerals or the like (including oil and gas) and account> subject to the UCC, as amended. Trustor shall be deemed to be the "debtor" and Beneficiary shall be deemed to be the "secured party" for all purposes under the UCC. 7. Trustor's Representations, Warranties and Covenants; Rights and Duties of the Parties. 7.1 Representations and Warranties. Trustor represents and warrants that: (i) Trustor lawfully possesses and holds a fee simple interest in the Land and the Improvements, (ii) Trustor has good and marketable title to all of the Property; (iii) other than as limited by the Loan Documents, Trustor has the full andl unlimited power, right and authority to encumber the Property and assign the Rents; (iv) subject only to encumbrances of record and senior liens. permitted pursuant to the Loan Documents or otherwise approved in writing by Beneficiary ("Permitted Encumbrances"), this; Deed of Trust creates a valid lien on Trustor's entire interest in the Property; (v) except with respect to Permitted Encumbrances, Trustor owns the Property free and clear of all deeds of trust, mortgages, security agreements, reservations of title or conditional sales contracts, (vi) there is no financing statement affecting the Property on file in any public office other than as disclosed in writing to Beneficiary; and (vii) the correct address. of Trustor's chief executive office is specified in Section 10.2. 7.2 Condition of Property_ Trustor represents and warrants that except as disclosed to Beneficiary in writing, as of the date hereof: (i) Trustor has not received any notice from any governmental authority of any threatened or pending zoning, building, fire, or health code violation or violation of other gove~:~nmental regulations concerning the Property that has not previously been corrected, and no condition on the Land violates any health, safety, fire, environmental, sewage, building, oar other federal, state or local law, ordinance or regulation; (ii) no contracts, licenses, leases or commitments regarding the maintenance or use of the Property or allowing any third party rights to use the Property are in force; (iii) there are no threatened or pending actions, suits, or administrative proceedings against or affecting the Property or any portion thereof or the interest of Trustor in the Property; (iv) there are no threatened or pending condemnation, eminent domain, or similar proceedings affecting the Property or any portion 1422350-2 Jr thereof; (v) Trustor has not received any notice from any insurer of defects of the Property which have not been corrected; (vi) there are no natural or artificial conditions upon the Land or any part thereof that could result in a material and adverse change in the condition of the Land; (vii) all information that Trustor has delivered to Beneficiary, either directly or through Trustor's agents, is accurate and complete; and (viii) Trustor or Trustor's agents have disclosed to Beneficiary all material facts concerning the Property. 7.3 Authority. Trustor represents and warrants that this Deed of Trust and all other documents delivered or to be delivered by Trustor in connection herewith: (a) have been duly authorized, executed, and delivered by Trustor; (b) are binding obligations of Trustor; and (c) do not violate the provisions of any agreement to which Trustor is a party or which affects the Property. Trustor further represents and warrants that there are no pending, or to Trustor's knowledge, threatened actions or proceedings before any court or administrative agency which may adversely affect Trustor's ownership of the Property. 7.4 Payment and Perfornnance of Secured Obli atg ions. Trustor shall promptly pay when due the principal and any interest due on the indebtedness evidenced by the Note, and shall promptly pay and perform all other obligations of Trustor arising in connection with the Secured Obligations or the Loan Documents in accordance with the respective terms thereof. 7.5 Use of Loan Proceedls; Preservation and Maintenance of Propert~ompliance with Laws. Trustor covenants that pit shall use the Loan Proceeds solely for purposes authorized by the Loan Documents. Trustor covenants that it shall keep the Land and Improvements in good repair and condition, and from time to time shall make necessary repairs, renewals and replacements thereto so that the Property shall be preserved and maintained. Trustor covenants to comply with all federal, state andl local laws, regulations, ordinances and rules applicable to the Property and the Project, including without limitation all applicable requirements of state and local building codes and regulations, and all applicable statutes and regulations relating to accessibility for the disabled. Trustor shall not remove, demolish or materially alter any Improvement without Beneficiary' ~, consent, shall complete or restore promptly and in good and workmanlike manner any building, fixture or other improvement which may be constructed, damaged, or destroyed thereon, and. shall pay when due all claims for labor performed and materials furnished therefor. Trustor shall use the Land and the Improvements solely for purposes authorized by the Loan Documents, shall not commit or allow waste of the Property, and shall not commit or allow any act upon or use of the Property which would violate any applicable law or order of any governmental authority, nor shall Trustor bring on or keep any article on the Property or cause or allow any condition to exist thereon which could invalidate or which would be prohibited by any insurance coverage required to be maintained on the Property pursuant to the Loan Documents. 7.6 Restrictions on Conveyance and Encumbrance; Acceleration. It shall be an Event of Default hereunder if the Property, any part thereof, or interest therein is sold, assigned, conveyed, transferred, hypothecated, leased, licensed, or encumbered in violation of the Loan Documents or if any other Transfer (as defined in the OPA) occurs in violation of the Loan Documents. If any such Transfer shall occur in violation of such requirements, without limiting the provisions of Section 8 hereof, all obligations secured by this Deed of Trust, irrespective of 1422350-2 6 the maturity dates of such obligations, shall at the option of Beneficiary, and without demand, immediately become due and payable, subject to any applicable cure period. 7.7 Inspections; Books and Records. Beneficiary and its agents and representatives shall have the right at any reasonable time upon reasonable notice to enter upon the Land and inspect the Property to ensure compliance with the Loan Documents. Trustor shall maintain complete and accurate books of account and other records (including copies of supporting bills and invoices) adequate to document the use of the Loan Proceeds and the operation of the Property, together with copies of all written contracts, Leases and other instruments which affect the Property. The books, records, contracts, Leases and other instruments shall be subject to examination and inspection by Beneficiary at any reasonable time following two business days prior notice. 7.8 Charges, Liens, Taxers and Assessments. Trustor shall pay before delinquency all taxes, levies, assessments and other charges affecting the Property that are (or if not paid may become) a lien on all or part of the Property. Trustor may, at Trustor's expense, contest the validity or application of any tax, levy, assessment or charge affecting the Property by appropriate legal proceedings promptly initiated and conducted in good faith and with due diligence, provided that (i) Beneficiary is reasonably satisfied that neither the Property nor any part thereof or interest therein will 1=>e in danger of being sold, forfeited, or lost as a result of such contest, and (ii) Trustor shall have posted a bond or furnished other security as may reasonably be required from time to time by Beneficiary; and provided further that Trustor shall timely make any payment necessary to prevent a lien foreclosure, sale, forfeiture or loss of the Property. Trustor shall immediately discharge or cause to be discharged any lien on the Property (other than encumbrances approved by Beneficiary as of the date hereof in writing). Trustor shall pay when due each obligation secured by or reducible to a lien, charge or encumbrance which now does or later may encurriber or appear to encumber all or part of the Property or any interest in it, whether or not such lien, charge or encumbrance is or would be senior or subordinate to this Deed of Trust. 7Crustor shall not be required to pay any tax, levy, charge or assessment so long as its validity is being actively contested in good faith and by appropriate actions and/or proceedings. 7.9 Subro ag tion. Beneficiary shall be subrogated to the liens of all encumbrances, whether released of record or not, which are discharged in whole or in part by Beneficiary in accordance with this Deed of Trust. 7.10 Hazard, Liability and Workers' Compensation Insurance. At all times during the term hereof, at Trustor's expense, Trustor shall keep the Improvements and personal property now existing or hereafter located on the Property insured against loss by fire, vandalism and malicious mischief by a policy of standard fire and extended all-risk insurance. The policy shall be written on a full replacement value basis and shall name Beneficiary as loss payee as its interest may appear. The full replacement value of the improvements to be insured shall be determined by the company issuing the policy at the time the policy is initially obtained. Not more frequently than once every two (2) years, either the Trustor or the Beneficiary shall have the right to notify the other party that it elects to have the replacement value redetermined by the insurance company. Subject to the rights of any senior lienholder, the proceeds collected under 1422350-2 ~ any insurance policy may be applied by Beneficiary to any indebtedness secured hereby and in such order as Beneficiary may determine, or at the option of Beneficiary, the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice oaf default hereunder or invalidate any act done pursuant to such notice. Notwithstanding anythiing to the contrary set forth herein, provided that Trustor is not in default under any Loan Document, Trustor shall be permitted to use the proceeds of insurance to rebuild the Improvements. 7.10.1 Trustor shall at all times during the term hereof, maintain a comprehensive general liability insurance policy in an amount not less than One Million Dollars ($1,000,000) each occurrence, Two Million Dollars ($2,000,000) annual aggregate, together with Three Million Dollars ($3,000,000) excess liability coverage or such other policy limits as Agency may require in its reasonable discretion, including coverage for bodily injury, property damage, products, completed operations and contractual liability coverage. Such policy or policies shall be written on an occurrence basis anal shall name the Beneficiary as an additional insured. Trustor shall maintain workers' compensation insurance as required by law. 7.10.2 Trustor shall idle with Beneficiary prior to the commencement of the term hereof, certificates (or such other proof as Beneficiary may require, including without limitation, copies of the required insurance poliicies) evidencing each of the insurance policies and endorsements thereto as required by this Section, and such certificates (or policies) shall provide that at least thirty (30) days' prior written notice shall be provided to Beneficiary prior to the expiration, cancellation. or change iri coverage under each such policy. 7.10.3 If any insurar,~ce policy required hereunder is canceled or the coverage provided thereunder is reduced, Trustor shall, within fifteen (15) days after receipt of written notice of such cancellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with Beneficiary a certificate showing that the required insurance has been reinstated or provided through another insurance company or companies. Upon failure to so file such certificate, Beneficiary may, without further notice and at its option, procure such insurance coverage at: Trustor's expense, and Trustor shall promptly reimburse Beneficiary for such expense upon receipt of billing from Beneficiary. 7.10.4 The insurance policies required hereunder shall be issued by insurance companies authorized to do business in the State of California with a financial rating of at least A VII status as rated in the most recent edition of Best's Key Rating Guide. Each policy of insurance shall contain an endorsement requiring the insurer to provide at least 30 days written notice to Beneficiary prior to change in coverage, cancellation or expiration thereof. If any insurance policy required pursuant t:o the Loan Documents is canceled or the coverage provided thereunder is reduced, Trustor shall, within ten (10) days after receipt of written notice of such cancellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with Beneficiary a. certificate showing that the required insurance has been reinstated or provided through another insurance company or companies. Upon failure to so file such certificate, Beneficiary may, without further notice and at its option, procure such insurance coverage at Trustor's expense, and 'Trustor shall promptly reimburse Beneficiary for such expense upon receipt of billing from Beneficiary. 1422350-2 $ 7.11 Hazardous Materials,. Trustor represents and warrants that except as disclosed to Beneficiary in writing, as of the datf; hereof to the best knowledge of Trustor: (i) the Land is free and has always been free of Hazardous Materials (as defined below) and is not and has never been in violation of any Environmental Law (as defined below); (ii) there are no buried or partially buried storage tanks located on the Land; (iii) Trustor has received no notice, warning, notice of violation, administrative complaint, judicial complaint, or other formal or informal notice alleging that conditions on the Land are or have ever been in violation of any Environmental Law or informing TI•ustor that the Land is subject to investigation or inquiry regarding Hazardous Materials on the Land or the potential violation of any Environmental Law; (iv) there is no monitoring program required by the Environmental Protection Agency or any other governmental agency concerning the Land; (v) no toxic or hazardous chemicals, waste, or substances of any kind have ever been spilled, disposed of, or stored on, under or at the Land, whether by accident, burying, drainage, or storage in containers, tanks, holding areas, or any other means; (vi) the Land has never been used as a dump or landfill; and (vii) Trustor has disclosed to Beneficiary all information, records, and studies in Trustor's possession or reasonably available to Trustor relating to the Land concerning Hazardous Materials. Trustor shall not cause or permit any Hazardous Material (as defined below) to be brought upon, kept, stored or used in, on, under, or about the Land by Trustor, its agents, employees, contractors or invitees except for incidental supplies ordinarily used in connection with the construction, rehabilitation, repair, and operation of retail/commercial and residential developments and in compliance with all applicable laws, and shall not cause any release of Hazardous Materials into, onto, undler or through the Land. If any Hazardous Material is discharged, released, dumped, or spilled in, on, under, or about the Land and results in any contamination of the Land or adjacent property, or otherwise results in the release or discharge of Hazardous Materials in, on, under oar from the Land, Trustor shall promptly take all actions at its sole expense as are necessary to comply with all Environmental Laws (as defined below). Trustor shall indemnify, defend (with counsel reasonably acceptable to Beneficiary), and hold Beneficiary and its elected andl appointed officials, officers, agents and employees (collectively, "Indemnitees") harmless from and against any and all loss, claim, liability, damage, demand, judgment, order, penalty, line, injunctive or other relief, cost, expense (including reasonable fees and expenses of attorneys, expert witnesses, and other professionals advising or assisting Beneficiary), action, or cause of action (all of the foregoing, hereafter individually "Claim" and collectively "Claims") arising in connection with the breach of Trustor's covenants and obligations set forth in this Section 7.11 or otherwise arising in connection with the presence or release of Hazardous Materials in, on, under, or from the Property. The foregoing indemnity includes, without limitation, all costs of investigation, assessment, containment, removal, remediation of any kind, and dispo:>al of Hazardous Materials, all costs of determining whether the Land is in compliance with Environmental Laws, all costs associated with bringing the Land into compliance with all applicable Environmental Laws, and all costs associated with claims for damages or injury to persons, property, or natural resources. Without limiting the generality of the foregoing, Trustor shall, at Trustor's own cost and expense, do all of the following: a. pay or satisfy any judgment or decree that may be entered against any Indemnitee 1422350-2 9 or Indemnitees in any legal or administrative proceeding incident to any matters against which Indemnitees are entitled to be indemnified under this Deed of Trust; b. reimburse Indemnitees for any expenses paid or incurred in connection with any matters against which Indemnitees a.re entitled to be indemnified under this Deed of Trust; and c. reimburse Indemnitees for any and all expenses, including without limitation out- of-pocket expenses and fees of attorneys and expert witnesses, paid or incurred in connection with the enforcement by Indemnitees of their rights under this Deed of Trust, or in monitoring and participating in any legal or administrative proceeding. Trustor's obligation to indemnify the Indemnitees shall not be limited or impaired by any of the following, or by any failure aF Trustor to receive notice of or consideration for any of the following: (i) any amendment or modification of any Loan Document; (ii) any extensions of time for performance required by any Loan Document; (iii) any provision in any of the Loan Documents limiting Beneficiary's recourse to property securing the Secured Obligations, or limiting the personal liability of Trustor, or any other party for payment of all or any part of the Secured Obligations; (iv) the accuracy or inaccuracy of any representation and warranty made by Trustor under this Deed of Trust or by Trustor or any other party under any Loan Document, (v) the release of Trustor or any other person, by Beneficiary or by operation of law, from performance of any obligation under any Loan Document; (vi) the release or substitution in whole or in part of any security for the Secured Obligations; and (vii) Beneficiary's failure to properly perfect any lien or security interest given as security for the Secured Obligations. The provisions of this Sectic-n 7.11 shall be in addition to any and all other obligations and liabilities that Trustor may have under applicable law, and each Indemnitee shall be entitled to indemnification under this Section without regard to whether Beneficiary or that Indemnitee has exercised any rights against the Property or any other security, pursued any rights against any guarantor or other party, or pursued any other rights available under the Loan Documents or applicable law. The obligations of "Trustor to indemnify the Indemnitees under this Section shall survive any repayment or discharge of the Secured Obligations, any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, and any release of record of the lien of this Deed of Trust. Without limiting any of the remedies provided in this Deed of Trust, Trustor acknowledges and agrees that each of the provisions in this Section 7.11 is an environmental provision (as defined in Section 73fi(f)(2) of the California Code of Civil Procedure) made by Trustor relating to real property security (the "Environmental Provisions"), and that Trustor's failure to comply with any of the Environmental Provisions will be a breach of contract that will entitle Beneficiary to pursue the remedies provided by Section 736 of the California Code of Civil Procedure ("Section 736") four the recovery of damages and for the enforcement of the Environmental Provisions. Pursuarrt to Section 736, Beneficiary's action for recovery of damages or enforcement of the Environmental Provisions shall not constitute an action within the meaning of Section 726(a) of the California Code of Civil Procedure or constitute a money judgment for a deficiency or a deficiency judgment within the meaning of Sections 580a, 580b, 580d, or 726(b) of the California Code of Civil Procedure. 1.422350-2 10 "Hazardous Materials" me-ans any substance, material or waste which is or becomes regulated by any federal, state or local governmental authority, and includes without limitation (i) petroleum or oil or gas or any direct or indirect product or by-product thereof; (ii) asbestos and any material containing asbestos; (iii) any substance, material or waste regulated by or listed (directly or by reference) as a "hazardous substance", "hazardous material", "hazardous waste", "toxic waste", "toxic pollutant", "toxic substance", "solid waste" or "pollutant or contaminant" in or pursuant to, or similarly identified as hazardous to human health or the environment in or pursuant to, the Toxic Substances Control Act [15 U.S.C. Section 2601, et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, et seq.], the Hazardous Materials Transportation Authorization Act [49 U.S.C. Section 5101, et seq.], the Resource Conservation and Recovery Act [42 U.S.C. Section 6901, et seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251], the Clean Air Act [42 U.S.C. Section 7401, et seq.], the California Underground Storage of Hazardous Substances Act [California Health and Safety Code Section 25280, et seq.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300, et seq.], the California Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enfi~rcement Act [California Health and Safety Code Section 25249.5, et seq.], and the Porter-Cologne Water Quality Control Act [California Water Code Section 13000, et seq.], as they now exist or are hereafter amended, together with any regulations promulgated thereunder; (iv) any substance, material or waste which is defined as such or regulated by any "Superfund" or "Superlien" law, or any Environmental Law; or (v) any other substance, material, chemical, waste or pollutant identified as hazardous or toxic and regulated under any other federal, state or local environmental law, including without limitation, asbestos, polychlorinated biphenyls, petroleum, natural gas and synthetic fuel products and by-products. "Environmental Law" means all federal, state or local statutes, ordinances, rules, regulations, orders, decrees, judgments or common law doctrines, and provisions and conditions of permits, licenses and other operalting authorizations regulating, or relating to, or imposing liability or standards of conduct concerning (i) pollution or protection of the environment, including natural resources; (ii) exposure of persons, including employees and agents, to any Hazardous Material (as defined above) or other products, raw materials, chemicals or other substances; (iii) protection of the public health or welfare from the effects of by-products, wastes, emissions, discharges or releases of chemical substances from industrial or commercial activities; (iv) the manufacture, use or introduction into commerce of chemical substances, including without limitation, their manufacture, formulation, labeling, distribution, transportation, handling, storage and disposal; or (iv) the use, release or disposal of toxic or hazardous substances or Hazardous Materials or the remediation of air, surface waters, groundwaters or soil, as now or may at any later time be in effect, including but not limited to the Toxic Substances Control Act [15 tJ.S.C. 2601, et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, et seq.], the Hazardous Materials Transportation Authorization Act [49 U.S.C. Section 5101, et seq.], the Resource Conservation and Recovery Act [42 U.S.C. 6901, et seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251], the Clean Air Act [42 U.S.C. Section 7401, et seq.], the California Underground Storage of Hazardous Substances Act [California Health and Safety Code Section 25280, et seq.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300, et seq.], the California Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enforcement Act 1422350-2 11 [California Health and Safety Code Section 25249.5, et seq.], and the Porter-Cologne Water Quality Control Act [California Water Code Section 13000, et seq.], as they now exist or are hereafter amended, together with any regulations promulgated thereunder. 7.12 Notice of Claims; Defense of Security; Reimbursement of Costs. a. Notice of Claims. Trustor shall provide written notice to Beneficiary of any uninsured or partially uninsured loss affecting the Property through fire, theft, liability, or property damage in excess of an aggregate of Fifty Thousand Dollars ($50,000) within three business days of the occurrence of such loss. Trustor shall ensure that Beneficiary shall receive timely notice of, and shall have a right to cure, any default under any other financing document or other lien affecting the Property and shall use best efforts to ensure that provisions mandating such notice and allowing such right to cure shall be included in all such documents. Within three business days of Trustor's receipt thereof, Trustor shall provide Beneficiary with a copy of any notice of default Trustor receives in connection with any financing document secured by the Property or any part thereof. b. Defense of Security. At Trustor's sole expense, Trustor shall protect, preserve and defend the Property and title to and right of possession of the Property, the security of this Deed of Trust and the rights and powers of Beneficiary and Trustee created under it, against all adverse claims. c. Compensation; Reimbursement of Costs. Trustor agrees to pay all reasonable fees, costs and expenses charged by Beneficiary or Trustee for any service that Beneficiary or Trustee may render in connection with this Deed of Trust, including without limitation, fees and expenses related to provision of a statement of obligations or related to a reconveyance. Trustor further agrees to pay or reimburse Beneficiary for all costs, expenses and other advances which may be incurred or made by Beneficiary or Trustee in any efforts to enforce any terms of this Deed of Trust, including without limitation any rights or remedies afforded to Beneficiary or Trustee or both of them under Sections 7.18 and 8.2, whether or not any lawsuit is filed, or in defending any action or proceeding arising under or relating to this Deed of Trust, including reasonable attorneys' fees and other legal costs, costs of any disposition of the Property under the power of sale granted hereunder or any judicial foreclosure, and any cost of evidence of title. d. Notice of Changes. 'Trustor shall give Beneficiary prior written notice of any change in the address of Trustor anci the location of any Property, including books and records pertaining to the Property. 7.13 Indemnification. Trustor shall indemnify, defend (with counsel reasonably acceptable to Beneficiary), and holdl harmless the Trustee and the Indemnitees (as defined in Section 7.11) from and against all Claims arising directly or indirectly in any manner in connection with or as a result of (a) any breach of Trustor's covenants under any Loan Document, (b) any representation b:y Trustor in any Loan Document which proves to be false or misleading in any material respect when made, (c) injury or death to persons or damage to property or other loss occurring on 1:he Land or in any improvement located thereon, whether caused by the negligence or any other act or omission of Trustor or any other person or by negligent, faulty, inadequate or defective design, building, construction or maintenance or any 1422350-2 12 other condition or otherwise, (d) any claim, demand or cause of action, or any action or other proceeding, whether meritorious or not, brought or asserted against any Indemnitee which relates to or arises out of the Property, or any Loan Document or any transaction contemplated thereby, or any failure of Trustor to comply with all applicable state, federal and local laws and regulations applicable to the Property, provided that no Indemnitee shall be entitled to indemnification under this Section for matters caused by such Indemnitee's gross negligence or willful misconduct. The obligations of Trustor under this Section shall survive the repayment of the Loan and shall be secured by this Deed of Trust. Notwithstanding any contrary provision contained herein, the obligations of Trustor under this Section shall survive any foreclosure proceeding, any foreclosure sale, any delivery of a deed in lieu of foreclosure, and any release or reconveyance of this Deed of Trust. 7.14. Limitation of Liability. Beneficiary shall not be directly or indirectly liable to Trustor or any other person as a consequence of any of the following: (i) Beneficiary's exercise of or failure to exercise any rights, remedies or powers granted to Beneficiary in this Deed of Trust; (ii) Beneficiary's failure or rf;fusal to perform or discharge any obligation or liability of Trustor under any agreement related to the Property or under this Deed of Trust; (iii) any waste committed by Trustor, the lessees of the Property or any third parties, or any dangerous or defective condition of the Property; or (iv) any loss sustained by Trustor or any third party resulting from any act or omission c-f Beneficiary in managing the Property after an Event of Default, unless the loss is caused by the willful misconduct, gross negligence, or bad faith of Beneficiary. Trustor hereby expressly waives and releases all liability of the types described. in this Section 7.14 and agrees that Trustor shall assert no claim related to any of the foregoing against Beneficiary. 7.15 Insurance and Condemnation Proceeds. Subject to the rights of any senior lienholders, any award of damages i.n connection with any condemnation for public use of, or injury to the Property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply such moneys to any indebtedness secured hereby in such order as Beneficiary may determine, or at the option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Notwithstanding the foregoing, so long as the value of Beneficiary's lien is not impaired, insurance and/or condemnation proceeds may be used to repair and/or restore the Project. 7.16 Release, Extension, ]Modification. At any time and from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and the Note for endorsement, Trustee may release or reconvey all or any part of the Property, consent to the making of any map or plat of the Land or part thereof, join in granting any easement or creating any restriction affecting the Property, or join in any extension agreement or other agreement affecting the lien or charge hereof. At any time and from time to time, without liability therefor and without notice, Beneficiary may (i) release any person liable for payment of any Secured Obligation, (ii) extend the time for payment or otherwise alter the terms of payment of any Secured Obligation; (iii) accept additional real or personal property of any kind as security for any Secured Obligation, or (iv) substitute or release any property securing the Secured Obligations. 1422350-2 13 7.17 Reconveyance. Upori written request of Beneficiary stating that all of the Secured Obligations have been paid in full, and upon surrender of this Deed of Trust, and the Note, Trustee shall reconvey, without wan-anty, the Property or so much of it as is then held under this Deed of Trust. The recitals in any rf;conveyance executed under this Deed of Trust of any matters or facts shall be conclusive proof of the truthfulness thereof. Trustor shall pay all fees of Trustee and all recordation fees related to such reconveyance. 7.18 Cure; Protection of Security. Either Beneficiary or Trustee may cure any breach or default of Trustor, and if it chooses to do so in connection with any such cure, Beneficiary or Trustee may also enter the Property and/or do any and all other things which it may in its sole discretion consider necessary and appropriate to protect the security of this Deed of Trust. Such other things may include: appearing in and/or defending any action or proceeding which purports to affect the security of, or the right s or powers of Beneficiary or Trustee under, this Deed of Trust; paying, purchasing, contesting or compromising any encumbrance, charge, lien or claim of lien which in Beneficiary's or Trustee's sole judgment is or may be senior in priority to this Deed of Trust, such judgment of Beneficiary or Trustee to be conclusive as among Beneficiary, Trustee and Trustor; obtaining insurance and/or paying any premiums or charges for insurance required to be carried hereunder; otherwise caring for and protecting any and all of the Property; and/or employing counsel, accountants, contractors and other appropriate persons to assist Beneficiary or Trustee. Beneficiary and Trustee may take any of the actions permitted under this Section 7.18 either with or without giving notice, except for notices required under applicable law. Any amounts disbursed by Beneficiary pursuant to this paragraph shall become additional indebtedness secured by this Deed c-f Trust. 7.19 Reserved. 8. Default and Remedies. 8.1 Events of Default. Trustor acknowledges and agrees that an Event of Default shall occur under this Deed of Trust: upon the occurrence of any one or more of the following events: a. Beneficiary's declaration of an Event of Default under any Loan Document, subject to the expiration of any applicable cure period set forth in such document; b. Trustor fails ito perform any monetary obligation which arises under this Deed of Trust, and does not cure that failure within ten (10) days following written notice from Beneficiary or Trustee; c. If Trustor's interest in the Property or any part thereof is voluntarily or involuntarily sold, transferred, leased, encumbered, or otherwise conveyed in violation of Section 7.6 hereof or if any other Transfer occurs in violation of the OPA and Trustor fails to rescind such conveyance or otherwise cure such breach within the time period specified in paragraph j below; d. Trustor fails to maintain the insurance coverage required hereunder or otherwise fails to comply with the requirements of Section 7.10 hereof and Trustor fails to cure such default within the time specified in Section 7.10; 1422350-2 14 e. Subject to Trustor's right to contest such charges as provided herein, Trustor fails to pay taxes or assessments due on the Land or the Improvements or fails to pay any other charge that may result in a lien on the Land or the Improvements, and Trustor fails to cure such default within 10 days. f. Any representation or warranty of Trustor contained in or made in connection with the execution and delivery of this Deed of Trust or in any certificate or statement furnished pursuant hereto or in any other Loan Document proves to have been false or misleading in any material adverse respect when made; g. If, pursuant tc, or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (`Bankruptcy Law"), Trustor: (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Trustor in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Trustor; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due. h. If a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against Trustor in an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or simiilar official for Trustor or substantially all of Trustor's assets, (iii) orders the liquidation. of Trustor, or (iv) issues or levies a judgment, writ, warrant of attachment or similar process against the Property or the Project, and in each case the order or decree is not released, vacated, dismissed or fully bonded within 60 days after its issuance. i. The holder of~ any other debt instrument secured by a mortgage or deed of trust on the Property or part thereof declares an event of default thereunder and exercises a right to declare all amounts due under that debt instrument immediately due and payable, subject to the expiration of any applicable cure period set forth in such holder's documents; or j. Trustor fails to perform any obligation arising under this Deed of Trust other than one enumerated in this Section 8.1, and does not cure that failure either within ten (10) days after written notice from Benej~ciary or Trustee in the event of a monetary default, or within thirty (30) days after such written notice in the event of a nonmonetary default, provided that in the case of a nonmonetary default that in Beneficiary's reasonable judgment cannot reasonably be cured within thirty (30) days, an Event of Default shall not arise hereunder if Trustor commences to cure such default within thirty (30) days and thereafter prosecutes such cure to completion with due diligence and in good faith and in no event later than sixty (60) days following receipt of notice of defaullt. 8.2 Remedies. Subject to the applicable notice and cure provisions set forth herein, at any time after an Event of Default, 'Beneficiary and Trustee shall be entitled to invoke any and all of the rights and remedies described below, and may exercise any one or more or all, of the remedies set forth in any Loan Document, and any other remedy existing at law or in equity or by statute. All of Beneficiary's rigl^its and remedies shall be cumulative, and the exercise of any one or more of them shall not constitute an election of remedies. Beneficiary shall be entitled to collect all expenses incurred in pursuing the remedies provided hereunder, including without 1422350-2 15 limitation reasonable attorneys' fees and costs. a. Acceleration. Beneficiary may declare any or all of the Secured Obligations, including without limitation all sums payable under the Note and this Deed of Trust, to be due and payable immediately. b. Receiver. Beneficiary may apply to any court of competent jurisdiction for, and obtain appointment of, a receiver for the Property. c. Entry. Beneficiary, in person, by agent or by court-appointed receiver, may enter, take possession of, manage and operate all or any part of the Property, and may also do any and all other things in connection with those actions that Beneficiary may in its sole discretion consider necessary and appropriate to protect the security of this Deed of Trust. Such other things may include: taking and possessing copies of all of Trustor's or the then owner's books and records concerning the Property; entering into, enforcing, modifying, or canceling Leases on such terms and conditions as Beneficiary may consider proper; obtaining and evicting tenants; fixing or modifying Rents; collecting and receiving any payment of money owing to Trustor; completing any unfinished construction; and/or contracting for and making repairs and alterations. If Beneficiary so requests, Trustor shall assemble all of the Property that has been removed from the Land and make all of it available to Beneficiary at the site of the Land. Trustor hereby irrevocably constitutes and appoints Beneficiary as Trustor's attorney-in-fact to perform such acts and execute such documents as Beneficiary in its sole discretion may consider to be appropriate in connection with taking these measures, including endorsement of Trustor's name on any instruments. d. UCC Remediies. Beneficiary may exercise any or all of the remedies granted to a secured party under the UCC. e. Judicial Action. Beneficiary may bring an action in any court of competent jurisdiction to foreclose ithis Deed of Trust in the manner provided by law for foreclosure of mortgages on real property and/or to obtain specific enforcement of any of the covenants or agreements of this Deed of Trust. f. Power of Sale. Under the power of sale hereby granted, Beneficiary shall have the discretionary right to causc; some or all of the Property, including any Property which constitutes personal property, to be sold or otherwise disposed of in any combination and in any manner permitted by applicable law. 8.3 Power of Sale. If Beneficiary elects to invoke the power of sale hereby granted, Beneficiary shall execute or cause the Trustee to execute a written notice of such default and of its election to cause the Property to be sold to satisfy the obligations hereof, and shall cause such notice to be recorded in the office o~f the Recorder of each County wherein the Property or some part thereof is situated as required >•-y law and this Deed of Trust. Prior to publication of the notice of sale, Beneficiary shall deliver to Trustee this Deed of Trust and the Note or other evidence of indebtedness which is secured hereby, together with a written request for the Trustee to proceed with a sale of the Property, pursuant to the provisions of law and this Deed of Trust. 1422350-2 16 Notice of sale having been given as then required by law, and not less than the time then required by law having elapsed after recordation of such notice of default, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in the notice of sale, either as a whole or in separate parcels and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may, and at Beneficiary's request shall, postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time and place fixed by the preceding postponement. Trustee shall deliver to the purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person., including Trustor, Trustee, or Beneficiary, may purchase at such sale. After deducting all costs, fees, and expenses of Trustee and of the trust hereby created, including reasonable attorneys' fees in connection with sale, Trustee shall apply the proceeds of sale to payment of all sums advanced or expended by Beneficiary or Trustee under the terms hereof and all outstanding sums there secured hereby, and the remainder, if any, to the person or persons legally entitled thereto. Without limiting the generaliity of the foregoing, Trustor acknowledges and agrees that regardless of whether or not a defaullt has occurred hereunder, if an Event of Default has occurred under the Loan Documents, and if in connection with such Event of Default Beneficiary exercises its right to foreclose on the Property, then: (i) Beneficiary shall be entitled to declare all amounts due under the Note immediately due and payable, and (ii) the proceeds of any sale of the Property in connection with such foreclosure shall be used to pay all Secured Obligations, including without limitation, the outstanding principal balance and all other amounts due under the Note. At any foreclosure sale, any person, including Trustor, Trustee or Beneficiary, may bid for and acquire the Property or any part of it to the extent permitted by then applicable law. Instead of paying cash for such property, Beneficiary may settle for the purchase price by crediting the sales price of the property against the following obligations: a. First, the portion of the Secured Obligations attributable to the expenses of sale, costs of any action and any other sums for which Trustor is obligated to pay or reimburse Beneficiary or Trustee under Section 7.12 c ;and b. Second, the remaining balance of all other Secured Obligations in any order and proportions as Beneficiary in its sole discretion may choose. 8.4 Trustor's Right to RE;instate. Notwithstanding Beneficiary's acceleration of the sums secured by this Deed of Trust, Trustor shall have the right to have any proceedings begun by Beneficiary to enforce this Deed of Trust discontinued at any time prior to five days before sale of the Property pursuant to the power of sale contained in this Deed of Trust or at any time prior to entry of a judgment enforcing this Deed of Trust if: (a) Trustor pays Beneficiary all sums which would be then due under the Loan Documents if the Secured Obligations had no acceleration provision; (b) Trustor cures all breaches of any other covenants or agreements of 1422350-2 17 Trustor contained in this Deed of Trust; (c) Trustor pays all reasonable expenses incurred by Beneficiary and Trustee in enforcing; the covenants and agreements of Trustor contained in this Deed of Trust, and in enforcing Beneficiary's and Trustee's remedies as provided herein, including, but not limited to, reasonable attorney's fees; and (d) Trustor takes such action as Beneficiary may reasonably require to assure that the lien of this Deed of Trust, Beneficiary's interest in the Property and Trustor'~s obligation to pay the sums secured by this Deed of Trust shall continue unimpaired. Upon such payment and cure by Trustor, this Deed of Trust and the obligations secured hereby shall remain in full force and effect as if no acceleration had occurred. 9. Trustor's Waivers. To the fullest extent permitted by law, Trustor waives: (a) all statutes of limitations as a defense to any action or proceeding brought against Trustor by Beneficiary; (b) the benefit of all laws now existing or which may hereafter be enacted providing for any appraisement, valuation, stay, extension, redemption or moratorium; (c) all rights of marshalling in the event of foreclosure; and (d) all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, notices of acceptance of this Deed of Trust and of the existence, creation, or incurring of new or additional indebtedness, and demands and notices of every kind. 10. Miscellaneous Provisions. 10.1 Additional Provisions. The Loan Documents grant further rights to Beneficiary and contain further agreements and affirmative and negative covenants by Trustor which apply to this Deed of Trust and the Property. 10.2 Notices. Trustor requests that a copy of notice of default and notice of sale be mailed to Trustor at the address set forth below. That address is also the mailing address of Trustor as debtor under the UCC. Beneficiary's address set forth below is the address for Beneficiary as secured party under 1:he UCC. Except for any notice required under applicable law to be given in another manner, all notices to be sent pursuant to this Deed of Trust shall be made in writing, and sent to the panties at their respective addresses specified below or to such other address as a party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by: a. personal delivery, in which case notice shall be deemed delivered upon receipt; b. certified or rf;gistered mail, return receipt requested, in which case notice shall be deemed delivered two (2) business days after deposit, postage prepaid in the United States mail; c. nationally recognized overnight courier, in which case notice shall be deemed delivered one (1) day after deposit with such courier; or d. facsimile transmission, in which case notice shall be deemed delivered on transmittal, provided that a transmission report is generated reflecting the accurate transmission thereof. 1422350-2 18 Beneficiary: Redevelopment Agency of the City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attention: Executive Director Trustor: Giffra Enterprises, LLC 24o Grand Avenue South San Francisco, CA 94080 Attention: Greg Giffra Facsimile: t~5o-239-3604 With copy to: Ronald P. Albert Attorney At Law 66 George Lane, Suite ioi Sausalito, C.A 94965 Facsimile: q.15-332-9216 Trustee: 10.3 Binding on Successors. The terms, covenants and conditions of this Deed of Trust shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest, transferees, and assigns of the Trustor, Beneficiary and Trustee; provided however this Section 10.3 does not waive the provisions of Section 7.6. 10.4 Substitution of Trustee. Beneficiary may from time to time or at any time substitute a trustee or trustees to execute the trust hereby created, and when any such substitution has been filed for record in the office of the Recorder of San Mateo County, it shall be conclusive evidence of the appointnnent of such trustee or trustees, and such new trustee or trustees shall succeed to all of the powers and duties of the Trustee named herein. 10.5 Attorneys' Fees and Costs. In any action or proceeding to foreclose this Deed of Trust or to enforce any right of Beneficiary or of Trustee, Trustor shall pay to Beneficiary and Trustee all costs of such action or proceeding, including reasonable attorneys' fees. 10.6 Governing Law; Severability; Interpretation. This Deed of Trust shall be governed by the laws of the State of California without regard to principles of conflicts of laws. Trustor agrees that any controversy arising under or in relation to this Deed of Trust shall be litigated exclusively in the jurisdiction where the Land is located (the "Property Jurisdiction"). The state and federal courts and authorities with jurisdiction in the Property Jurisdiction shall 1422350-2 19 have exclusive jurisdiction over all controversies which shall arise under or in relation to the Loan Documents. Trustor irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation, and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. If any provision of this Deed of Trust is held unenforceable or void, that provision shall be deemed severable from the remaining provisions, and shall in no way affect the validity of this Deed of Trust. The captions used in this Deed of Trust are for convenience only and are not intended to affect the interpretation or construction of the provisions herein contained. In 1:his Deed of Trust, whenever the context so requires, the singular number includes the plural. 10.7 Waiver, Modification and Amendment. Any waiver by Beneficiary of any obligation of Trustor hereunder must be in writing, and no waiver shall be construed as a continuing waiver. No waiver shall be implied from any delay or failure by Beneficiary or Trustee to take action on account of any default of Trustor. Consent by Beneficiary or Trustee to any act or omission by Trustor shall not be construed as a consent to any other or subsequent act or omission or to waive the requirement for Beneficiary's or Trustee's consent to be obtained in any future or other instance. No amendment to or modification of this Deed of Trust shall be effective unless and until such amendment or modification is in writing, executed by Trustor and Beneficiary. Without limiting the generality of the foregoing, Beneficiary's acceptance of payment of any sum secured hereby after its due date shall not constitute a waiver by Beneficiary of its right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. 10.8 Action by Beneficiar~X. Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, or consent by the Beneficiary is required or permitted under this Agreement, such action shall be in writing, and such action may be given, made or taken by Beneficiary's Executive Director or by any person who shall have been designated by Beneficiary's Executive Director, without further approval by the governing board of Beneficiary. Beneficiary shall use reasonable best efforts to respond to requests for any such approval, notice, direction, or consent in a timely manner. In any approval, consent, or other determination by Beneficiary required hereunder, Beneficiary shall act reasonably and in good faith. 10.9 Joint and Several Liability. If Trustor consists of more than one person or entity, each shall be jointly and severally liable for the faithful performance of all of Trustor's obligations under this Deed of Trust. 10.10 Time is of the Essence. Time is of the essence for each provision of this Deed of Trust. SIGNATUR~;S ON FOLLOWING PAGE. 1422350-2 20 IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the date first written above. TRUSTOR: GIFFRA ENTERPRISES, LLC, a California limited liability company By:_ Name: Title: SIGNATURES MUST BE NOTARIZED. 1422350-2 21 STATE OF CALIFORNIA COUNTY OF SAN MATEO On , 20 ,before me, , (here insert name and title of the officer), personally appeared ,who proved tome 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) STATE OF CALIFORNIA COUNTY OF SAN MATEO On , 20 ,before me, , (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) w'.hose 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) 1422350-2 22 Exhibit A LAND ~~Attach legal description.) 1422350-2 2 3 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Redevelopment Agency of the City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: Executive Director EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE §§6103, 27383 Space above this line for Recorder's use. AFFORDABLE HOUSING REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS by and between THE REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO and GIFFRA ENTERPRISES, LLC 1422347.2 1 This Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants (this "Agreement") is entered into effective as of , 2010 ("Effective Date") by and between the Redevelopment Agency of the City of South San Francisco, a public body, corporate, and politic ("Agency") and Giffra Enterprises, LLC, a California limited liability company ("Owner"). Agency and Owner are hereinafter collectively referred to as the "Parties." RECITALS A. Owner is the owner of certain real property located in the City of South San Francisco ("City") at 228 ar~d 236 Grand Avenue, and known as San Mateo County Assessor's Parcel Nos. 012-315-130 and 012-315-140 as more particularly described in Exhibit A attached hereto (the "Property"). B. Owner intends to rehabilitate the existing improvements on the Property and to own and operate a mixed)-use retail and multi-family residential project (the "Project") on the Property in accordance with that certain Owner Participation and Loan Agreement (the "OPA") dated as of , 2010 and executed by and between Owner and Agency, a memorandum of which shall be recorded substantially concurrently herewith in the Official Records of San Mateo County ("Official Records"). C. The OPA provides that for a period of not less than fifty-five (55) years not less than ten (10) of the residential units in the Project shall be rented at an affordable cost to households whose income is less than or equal to one hundred twenty percent (120%) of Area Median Income. D. Subject to the conditions set forth in the OPA, Agency has agreed to provide to Owner a loan in the amount of Two Million Five Hundred Thousand Dollars ($2,500,000) (the "Loan") in order to provide financing for the rehabilitation of the Project. The Loan is evidenced by a Secured Promissory Note (the "Note") executed by Owner and dated as of the date hereof, and is secured by a Deed of Trust, Assignment of Rents, Security A-greement and Fixture Filing ("Deed of Trust") dated as of the date hereof and executed by Owner for the benefit of Agency. The Deed of Trust will be recorded in the Official Records substantially concurrently herewith. E. As a condition to its agreement to provide the Loan to Owner, Agency requires the Property to be subject to the terms, conditions and restrictions set forth herein. Community Redevelopment Law (California Health and Safety Code Section 33000, et seq. (the "CRL")), requires the Agency to require residential rental units assisted with funds from the AgE~ncy's low- and moderate-income housing fund to remain affordable for the longest feasible time. In addition, to the extent permitted by the CRL, this Agreement is intended to enable the Agency to count the residential units in the Project toward satisfaction of irhe Agency's housing production obligation under CRL Section 33413(b)(2). 1422347.2 2 F. The Parties have agreed to enter into and record this Agreement in order to satisfy the conditions described in the foregoing Recitals. The purpose of this Agreement is to regulate and restrict the occupancy and rents of the Project's Restricted Units for the benefit of the Project occupants. The Parties intend the covenants set forth in this Agreement to run with the land and to be binding upon Owner and Owner's successors and assigns for the full term of this Agreement. NOW THEREFORE, in consideration of the foregoing, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows. 1. Definitions. The following terms have the meanings set forth in this Section wherever used in this Agreement or the attached exhibits. "Actual Household Size" means the actual number of persons in the applicable household. "Adjusted for Family Size Appropriate for the Unit" shall be determined consistent with Section 50052.5(h) of the California Health and Safety Code and applicable federal rules (if any). "Affordable Rent" means the following amounts, less a utility allowance and such other adjustments as required pursuant to the CRL: for units that are restricted for rental to households with incomes of not more than Moderate Income, a monthly rent that does not exceed one-twelfth of thirty percent (30%) of one hundred and ten percent (110%) of Area Median Income, Adjusted for Family Size Appropriate for the Unit; provided however, for households whose Gross Household Income exceeds 110% of AMI, Affordable Rent may be established as thirty percent (30%) of the Gross Household Income for such household. "Area Median Income" or "AMI" means the median income for San Mateo County, California, adjusted for Actual Household Size, as determined by the U.S. Department of Housing and Urban Development ("HUD") pursuant to Section 8 of the United States Housing Act of 1937 and as published from time to time by the State of California Department of Housirng and Community Development ("HCD") in Section 6932 of Title 25 of the California Code of Regulations or successor provision published pursuant to Californi<~ Health and Safety Code Section 50093(c). "Claims" is defined in SE~ction 10. "Eligible Household" mE~ans a household for which Gross Household Income upon initial occupancy does not exceed the maximum income level for a Restricted Unit as specified in Section 2.1. "Gross Household Incorne" means the gross annual income of all adult 1422347.2 3 persons occupying a residential unit "Moderate Income" means an annual Gross Household Income that is less than or equal to 120% of AMI, adjusted for actual household size as determined periodically by HCD on the basis of gross annual household income and published in the Regulations for San Mateo County. "Regulations" means Tii:le 25 of the California Code of Regulations "Restricted Unit" means a dwelling unit which is reserved for occupancy at an Affordable Rent by a household of not more than a specified household income in accordance with and as set forth in Section 2.1 and 2.2. 2. Use and Affordabiliity Restrictions. Owner hereby covenants and agrees, for itself and its successors and ;assigns, that the Property shall be used solely for the operation of a mixed-use, multifamily rental housing development in compliance with the OPA and the requirements set forth herein. Owner represents and warrants that it has not entered into any agreement that would restrict or compromise its ability to comply with the occupancy and affordability restrictions set forth in this Agreement, and Owner covenants that it shall not enter into any agreement that is inconsistent with such restrictions without the express written consent of Agency. 2.1 Affordability Requirements. For a term of fifty-five (55) years commencing upon the date of issuance of a final certificate of occupancy for each phase of the Project not less than ten (10) of 'the residential units in such phase shall be shall be both Rent Restricted (as defined below) and occupied (or if vacant, available for occupancy) by Eligible Households whose Gross Household Income is less than or equal to Moderate Income. In the event that recertification of tenant incomes indicates that the number of Restricted Units actually occupiE~d by Eligible Households falls below the number reserved for each income group as specified in this Section, Owner shall rectify the condition by renting the next available dwelling unit(s) in the Project to Eligible Household(s) until the required income mix is achieved. A dwelling unit shall qualify as "Rent Restricted" if the gross runt charged for such unit does not exceed the Affordable Rent for the applicablle household income category. Notwithstanding anything to the contrary contained in this Agreement, if the terms of financing for the Project restrict a greater number of units than restricted by this Agreement or require stricter affordability requirements than those imposed hereby, the requirements of such other financing shall prevail for the term thereof. 2.2 Rents for Restricted Units. Rents for Restricted Units shall be limited to Affordable Rents for households of the applicable income limit in accordance with Section 2.1. Notwithstanding the foregoing, no tenant qualifying for a Restricted Unit shall be denied continued occupancy of a unit in the Project because, after admission, 1422347.2 4 such tenant's adjusted income increases to exceed the qualifying limit for such Restricted Unit. A household which at initial occupancy qualifies in a particular income category shall be treated as continuing to be of such income category so long as the household's Gross Household Income does not exceed 140% of the applicable income limit. In the event the Gross Household Income of a household that qualified at the applicable income limit at initial occupancy exceeds the applicable income limit for a unit, that unit will continue to be considered as satisfying the applicable income limit if the unit remains Rent-Restrictedl. 2.2.2 If upon recertification of tenant incomes, Owner determines that a tenant has a Gross Household Income exceeding the maximum qualifying income for such tenant's unit, the tenant shall be permitted to continue to occupy the unit, and upon expiration of the tenant's IE~ase and upon sixty (60) days' written notice, Owner may increase the rent for such unit to the lesser of one-twelfth of thirty percent (30%) of the tenant's actual Gross Household Income or the fair market rent, and Owner shall rent the next available unit to a tenant whose household income does not exceed 120% of AMI in order to meet the requirements of this Agreement. Notwithstanding the above, the Borrower may choose not to renew a tenant's lease if the tenant's household income exceeds 120% of AMI. 2.2.3 In the event of inconsistency between the provisions of Section 2.2.1 or Section 2.2.2 and the rules applicable to the Project in connection with tax- exempt bond financing, low-income housing tax credits or financing provided by HUD or HCD (if any), the rules applicable pursuant to such financing source shall prevail. 2.2.4 Notice of Affordability Restrictions on Transfer of Property. Pursuant to the requirements of California Community Redevelopment Law, Owner and Agency shall execute a Notice of Affordability Restrictions on Transfer of Property substantially in the form attached hereto as Exhibit C, and shall cause such notice to be recorded substantially concurrently with the recordation of this Agreement. 2.3 Unit Sizes, Design and Location. The Restricted Units shall be of comparable design quality as unrestricted units in the Project, but may have reduced interior amenities. Tenants of F;estricted Units shall have access to all common facilities of the Project equal to that of tenants of Project Units that are not Restricted Units. 2.4 Intentionally omitted. 2.5 No Condominium Conversion. Owner shall not convert the residential units in the Project to condominium or cooperative ownership or sell condominium or cooperative rights to the residential portion of the Project or any part thereof during the term of this Agreement. 2.6 Non-Discrimination; Compliance with Fair Housin_q Laws. 2.6.1 Preferences. Consistent with the requirements of California Health 1422347.2 5 and Safety Code Section 33411.3, Owner shall give first priority for the rental of Restricted Units to Eligible Households of Low- or Moderate-Income who have been displaced by development of the (Project. At initial lease-up, Owner shall give a preference to Eligible Household:> in which at least one member lives or works in the City of South San Francisco, unless compliance with the foregoing criteria is prohibited by law or by state or federal sources of fiinancing for the Project. If there are fewer Eligible Households than the number of such units, the units wilt be made available to the general public. 2.6.2 Fair Housinct. Owner shall comply with state and federal fair housing laws in the marketing and rental of the units in the Project. Owner shall accept as tenants, on the same basis as all other prospective tenants, persons who are recipients of federal certificates or vouchers for rent subsidies pursuant to the existing Section 8 program or any successor thereto. 2.6.3 Non-Discrimination. Owner shall not restrict the rental, sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, or any portion thereof, on the basis of race, color, religion, creed, sex, sexual orientation, disability, marital status, ancestry, or national origin of any person. Owner covenants for itself and all persons claiming under or through it, and this Agreement is made and accepted upon and subject to the condition that there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section '12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property or part thereof, nor shall Owner or any person claiming under or through Owner establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in, of, or for the Property or part thereof. Owner shall include such provision in all deeds, leases, contracts and other instruments executed by Owner, and shall enforce the samme diligently and in good faith. All deeds, leases or contracts made or entered into by Owner, its successors or assigns, as to any portion of the Property or the Improvements shall contain the following language: (a) (1) In Deed:>, the following language shall appear: "Grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through it, that there shall be no discrimination against or segregation of a person or of a 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, 1422347.2 6 sublease, transfer, use, occupancy, tenure or enjoyment of the property herein conveyed nor shall the grantee or any person claiming under or through the grantee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the property herein conveyed. The foregoing covenant shall run with the land." 2) Notwithstandling paragraph (1), with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in Sectic-n 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code, relating to housing ifor senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (1). (b) (1) In Leases, the following language shall appear: "The lessee herein covenants by and for the lessee and lessee's heirs, personal representatives and assigns, and all persons claiming under the lessee or through the lessee, that this lease is made subject to the condition that there shall be no discrimination against or segregation of any person or of a group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin, ancestry or disability in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of they property herein leased nor shall the lessee or any person claiming under or through the lessee establish or permit any such practice or practices of discrimination of segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the property herein leased." (2) Notwithstanding paragraph (1), with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (1). (c) In Contracts. "There shall be no discrimination against or segregation of any person or group of persons ern account of any basis listed in subdivision (a) or (d) of 1422347.2 7 Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, Lease, sublease, transfer, use, occupancy, tenure or enjoyment of the property nor shall the transferee or any person claiming under or through the transferee establish or permit any such practice or practices of discrirriination or segregation with reference to selection, location, number, use or occupancy of tenants, lessee, subtenants, sublessees or venciees of the land." 2.7 Relocation. Persons residing on the Property as of the Effective Date shall not be displaced before suitable replacement housing is available in comparable replacement housing. Owner shall ensure that all occupants of the Property receive all notices, benefits and assistance to which they are entitled in accordance with California Relocation Assistance Law (Government Code Section 7260 et seq.), all state and local regulations implementing such law, and all other applicable local, state and federal laws and regulations (collectively "Relocation Laws") relating to the displacement and relocation of eligible persons as defined in such Relocation Laws. Any and all costs incurred in connection with the temporary and/or permanent displacement and/or relocation of occupants of the Property, including without limitation payments to a relocation consultant, moving expenses, and payments for temporary and permanent relocation benefits pursuant to Relocation Laws shall be paid by Owner. Owner shall indemnify, defend (with counsel approved by Agency) and hold harmless the Indemnitees (defined in Section 10) from and against any and all Claims (defined in Section 10) arising in connection with the breach of Owner's obligations set forth in this Section except to the extent suclh Claims arise from the gross negligence or willful misconduct of the Indemnitees. Owner's indemnification obligations set forth in this Section 2.7 shall survive the expiration or earlier termination of this Agreement. 3. Reporting Requirements. 3.1. Tenant Certification. Owner or Owner's authorized agent shall obtain from each household prior to initial occupancy of each Restricted Unit, and on every anniversary thereafter, a written certificate containing all of the following in such format and with such supporting documentation as Agency may reasonably require: (a) The identity of each household member; (b) The total Gross Hc-usehold Income; Owner shall retain such certificates for not less than three (3) years, and upon Agency's request, shall provide copies of such certificates to Agency and make the originals available for Agency inspection. 3.2 Annual Report; Inspections. By not later than April 30 of each year during the term of this Agreement, Owner shall submit an annual report ("Annual Report") to 1422347.2 g the Agency in form satisfactory to Agency, together with a certification that the Project is in compliance with the requirements of this Agreement. The Annual Report shall, at a minimum, include the following information for each dwelling unit in the Project: (i) unit number; (ii) number of bedrooms.; (iii) current rent and other charges; (iv) dates of any vacancies during the previous year; (v) number of people residing in the unit; (vi) total Gross Household Income; (vii) documentation of source of household income; and (viii) the information required by Section 3.1. Owner shall include with the Annual Report, an income recertification for each household, documentation verifying tenant eligibility, and such additional information as Agency may reasonably request from time to time in order to demonstrate compliance with this Agreement. The Annual Report shall conform to the format requested by Agency; provided however, during such time that the Project is subject to a regulatory agreement restricting occupancy and/or rents pursuant to requirements imposed in connection with the use of state or federal low-income housing tax credits ortax-exempt financing, Owner may satisfy the requirements of this Section by providing Agency with a copy of compliance reports required in connection with such financing. Owner shall permit representatives of Agency to enter and inspect the Property and the Project during reasonablE; business hours in order to monitor compliance with this Agreement upon 48-hours advance notice of such visit to Owner or to Owner's management agent. 4. Term of Agreement 4.1 Term of Restrictions. This Agreement shall remain in effect through the 55th anniversary of the issuance of the final certificate of occupancy for the Project, unless the term is extended by rriutual agreement of the Parties. 4.2 Effectiveness Succeeds Conveyance of Property and Repayment of Loan. This Agreement shall remain effective and fully binding for the full term hereof, as such may be extended pursuant to Section 4.1, regardless of (i) any sale, assignment, transfer, or conveyance of the Property or the Project or any part thereof or interest therein, (ii) any payment, prepayment or extinguishment of the Loan or Note, or (iii) any reconveyance of the Deed of Trust. 4.3 Reconveyance. Upon the termination of this Agreement, the Parties agree to execute and record appropriate instruments to release and discharge this Agreement; provided, however, the execution and recordation of such instruments shall not be necessary or a prerequisii:e to the termination of this Agreement upon the expiration of the term as such m<~y be extended pursuant to Section 4.1. 5. Binding Upon Successors; Covenants to Run with the Land. Owner hereby subjects its interest in the Property and the Project to the covenants and restrictions set forth in this Agreement. The AgE~ncy and Owner hereby declare their express intent that the covenants and restrictions set forth herein shall be deemed covenants running 1422347.2 9 with the land and shall be bindirng upon and inure to the benefit of the heirs, administrators, executors, successors in interest, transferees, and assigns of Owner and Agency, regardless of any sale, assignment, conveyance or transfer of the Property, the Project or any part thereof or interest therein. Any successor-in-interest to Owner, including without limitation any purchaser, transferee or lessee of the Property or the Project (other than the tenants of the individual dwelling units within the Project) shall be subject to all of the duties and obligations imposed hereby for the full term of this Agreement. Each and every contract, deed, ground lease or other instrument affecting or conveying the Property or the Project or any part thereof, shall conclusively be held to have been executed, delivered aind accepted subject to the covenants, restrictions, duties and obligations set forth herein, regardless of whether such covenants, restrictions, duties and obligations are set forth in such contract, deed, ground lease or other instrument. If any such contract, deed, ground lease or other instrument has been executed prior to the date hereof, Owner hereby covenants to obtain and deliver to Agency an instrument in recordable form signed by the parties to such contract, deed, ground lease or other instrument pursuant to which such parties acknowledge and accept this Agreement and agree to be bound hereby. Owner agrees for itself ar~d for its successors that in the event that a court of competent jurisdiction determinE~s that the covenants herein do not run with the land, such covenants shall be enforced as equitable servitudes against the Property and the Project in favor of Agency. 6. Property Management; Repair and Maintenance; Marketing. 6.1 Management Responsibilities. Owner shall be responsible for all management functions with reslpect to the Property and the Project, including without limitation the selection of tenants, certification and recertification of household income and eligibility, evictions, collection of rents and deposits, maintenance, landscaping, routiine and extraordinary repairs, replacement of capital items, and security. Agency shall have no responsibility for management or maintenance of the Property or ithe Project. 6.2 Management Entii~. Agency shall have the right to review and approve the qualifications of the management entity proposed by Owner for the Project. The contracting of management services to a management entity shall not relieve Owner of its primary responsibility for proper performance of management duties. 6.3 Repair, Maintenance and Security. Throughout the term of this Agreement, Owner shall at its o~rvn expense, maintain the Property and the Project in good physical condition, in good) repair, and in decent, safe, sanitary, habitable and tenantable living conditions in conformity with all applicable state, federal, and local laws, ordinances, codes, and regulations. Without limiting the foregoing, Owner agrees to maintain the Project and the Property (including without limitation, the residential units, common areas, meeting rooms, landscaping, driveways, parking areas and walkways) 1422347.2 10 in a condition free of all waste, nuisance, debris, unmaintained landscaping, graffiti, disrepair, abandoned vehicles/appliances, and illegal activity, and shall take all reasonable steps to prevent the same from occurring on the Property or at the Project. Owner shall prevent and/or rectify any physical deterioration of the Property and the Project and shall make all repairs, renewals and replacements necessary to keep the Property and the improvements located thereon in good condition and repair. Owner shall provide adequate security services for occupants of the Project. 6.3.1 Agency's Right to Perform Maintenance. In the event that Owner breaches any of the covenants contained in Section 6.3, and such default continues for a period of ten (10) days after written notice from Agency (with respect to graffiti, debris, and waste material) or thirty (30;- days after written notice from Agency (with respect to landscaping, building improvements and general maintenance), then Agency, in addition to any other remedy it nnay have under this Agreement or at law or in equity, shall have the right, but not the obligation, to enter upon the Property and perform all acts and work necessary to protect, maintain, and preserve the improvements and the landscaped areas on the Property. All costs expended by Agency in connection with the foregoing, shall constitute are indebtedness secured by the Deed of Trust, and shall be paid by Owner to Agency upon demand. All such sums remaining unpaid thirty (30) days following delivery of Agency's invoice therefor shall bear interest at the lesser of 10% per annum or the highest rate permitted by applicable law. Notwithstanding anything to the contrary set fortl-i in this Section, Agency agrees that it will provide Owner with not less than thirty (30) days' written notice prior to undertaking any work for which Owner will incur a financial obligation. 6.4 Marketing and Management Plan. Within ninety (90) days following the Effective Date of this Agreement, Owner shall submit for Agency review and approval, a plan for marketing and managiing the Property ("Marketing and Management Plan" or "Plan"). The Marketing and Management Plan shall address in detail how Owner plans to market the Restricted Units to prospective Eligible Households in accordance with fair housing laws and this Agreement, Owner's tenant selection criteria, and how Owner plans to certify the eligibility of Eligible Households. The Plan shall also describe the management team and shall adclress how the Owner and the management entity plan to manage and maintain the Property and the Project. The Plan shall include the proposed management agreement and the form of rental agreement that Owner proposes to enter into with ProjE~ct tenants. Owner shall abide by the terms of the Marketing and Management Plan in marketing, managing, and maintaining the Property and the Project, and throughout the term of this Agreement, shall submit proposed modifications to Agency for reviE~w and approval. 6.5 Approval of Amendments. If Agency has not responded to any submission of the Management and Marketing Plan, the proposed management entity, or a proposed amendment or change to any of the foregoing within 30 days following Agency's receipt of such plan, proposal or amendment, the plan, proposal or amendment shall be deemed approved by Agency. 1422347.2 11 6.6 Fees, Taxes, and C)ther Levies. Owner shall be responsible for payment of all fees, assessments, taxes, charges, liens and levies applicable to the Property or the Project, including without limitation possessory interest taxes, if applicable, imposed by any public entity, and shall pay such charges prior to delinquency. However, Owner shall not be required to pay any such charge so long as (a) Owner is contesting such charge in good faith and by appropriate proceedings, (b) Owner maintains reserves adequate to pay any contested liabilities, and (c) on final determination of the proceeding or contest, Owner immediately pays or discharges any decision or judgment rendered against it, together with all costs, charges and interest. 6.7 Insurance Coverag~e. Throughout the term of this Agreement Owner shall comply with the insurance requirE~ments set forth in Exhibit B, and shall, at Owner's expense, maintain in full force and effect insurance coverage as specified in Exhibit B. 6.8 Property Damage or Destruction. If any part of the Project is damaged or destroyed, Owner shall repair or restore the same, consistent with the occupancy and rent restriction requirements set forth in this Agreement. Such work shall be commenced within 120 days after the damage or loss occurs and shall be completed within one year thereafter or as :soon as reasonably practicable, provided that insurance proceeds are available to be applied to such repairs or restoration within such period and the repair or restoration is financially feasible. During such time that lenders or low-income housing tax credit investors providing financing for the Project impose requirements that differ i~rom the requirements of this Section the requirements of such lenders and investors shall prevail. 7. Recordation; Subordination. This Agreement shall be recorded in the Official Records of San Mateo County. Owner hereby represents, warrants and covenants that with the exception of easements of record, absent the written consent of Agency, this Agreement shall not be subordinated in priority to any lien (other than those pertaining to taxes or assessments), encumbrance, or other interest in the Property or the Project. If at the time this Agreement is recorded, any interest, lien, or encumbrance has been recorded against the Project in ~-osition superior to this Agreement, upon the request of Agency, Owner hereby covenants and agrees to promptly undertake all action necessary to clear such matter from title or to subordinate such interest to this Agreement consistent with the intent of and in accordance with this Section 7, and to provide such evidence thereof as; Agency may reasonably request. Notwithstanding anything to the contrary set forth herein, the Agency agrees that pursuant to Health and Safety Code Section 33334.14(x)(4), it will not withhold consent to reasonable requests for subordination of this Agreement to deeds of trust provided for the benefit of lenders identified in the financing plan approved in connection with the OPA, provided that the subordination agreement includes reasonable protections to the Agency in the event of default. 8. Transfer and Encumbrance. 8.1 Restrictions on Transfer and Encumbrance. During the term of this 1422347.2 12 Agreement, except as permitted pursuant to the OPA or this Agreement, Owner shall not directly or indirectly, voluntarilly, involuntarily or by operation of law make or attempt any total or partial sale, transfer, conveyance, assignment or lease (collectively, "Transfer") of the whole or any part of the Property, the Project, or the improvements located on the Property, without the prior written consent of the Agency, which approval shall not be unreasonably withheld. In addition, prior to the expiration of the term of this Agreement, except as expressly permitted by this Agreement or the OPA, Owner shall not undergo any significant chan~~e of ownership without the prior written approval of Agency. For purposes of this Agreement, a "significant change of ownership" shall mean a transfer of the beneficial interest of more than twenty-five percent (25%) in aggregate of the present ownership and /or control of Owner, taking all transfers into account on a cumulative basis. 8.2 Permitted Transfers. Notwithstanding any contrary provision hereof, the prohibitions on Transfer set forth herein shall not be deemed to prevent: (i) the granting of easements or permits; to facilitate development of the Property; (ii) the dedication of any property required pursuant to the OPA; (iii) the lease of individual dwelling units to tenants for occupancy as their principal residence in accordance with this Agreement and the lease of retail/commercial space to retail/commercial tenants; or (iv) assignments creating security interests for the purpose of financing the acquisition, construction, or permanent financing of the Project or the Property in accordance with the OPA, or Transfers directly resulting from the foreclosure of, or granting of a deed in lieu of foreclosure of, such a security interest. In addition, Agency will not withhold its consent to the sale, transfer or other disposition of the Project, in whole or in part, provided that (1) the Project is and shall continue to be operated in complliance with this Agreement; (2) the transferee expressly assumes all obligations of Owner imposed by this Agreement; (3) the transferee executes all documents reasonably requested by the Agency with respect to the assumption of the Owner's obligations under this Agreement, and upon Agency's request, delivers to the Agency tin opinion of its counsel to the effect that such document and this Agreement are valid, binding and enforceable obligations of such transferee; and (4) either (A) the transferee has at least three years' experience in the ownership, operation and management of low-income multifamily rental housing projects of similar size to that of the Project, without any record of material violations of nondiscrimination provisions or other state or federal laws or regulations applicable to such projects, or (B) the transferee agrees to retain a property management firm with the experience and record described in subclause (A). Consent to any proposed Transfer may be given by the Agency's Executive Director unless the Executive Director, in his or her discretion, refers the matter of approval to the Agency's governing board. If a proposed Transfer has not been approved by Agency in writing within thirty (30) days following Agency's receipt of written request by Owner, it shall be deemed rejected. 1422347.2 13 Owner shall reimburse Agency for all Agency costs, including but not limited to reasonable attorneys' fees, incurred in reviewing instruments and other legal documents proposed to effect a Transfer under this Agreement and in reviewing the qualifications and financial resources of a proposed successor, assignee, or transferee within ten (10) days following Agency's delivery of an invoice detailing such costs. 8.3 Encumbrances. Owner agrees to use best efforts to ensure that all deeds of trust or other security instrumE~nts recorded against the Property, the Project or part thereof for the benefit of a lendeir other than Agency ("Third-Party Lender") shall contain each of the following provisions: (i) Third-Party Lender shall use its best efforts to provide to Agency a copy of ainy notice of default issued to Owner concurrently with provision of such notice to Owner; (ii) Agency shall have the reasonable right, but not the obligation, to cure any defaullt by Owner within the same period of time provided to Owner for such cure extended by an additional 90 days; (iii) provided that Agency has cured any default under Third-Party Lender's deed of trust and other loan documents, Agency shall have the right to foreclose Agency's Deed of Trust and take title to the Project without acceleration of Thhird-Party Lender's debt; and (iv) Agency shall have the right to transfer the Project without acceleration of Third-Party Lender's debt to a nonprofit corporation or other entity which shall own and operate the Project as an affordable rental housing Project:, subject to the prior written consent of the Third-Party Lender. Owner agrees to provide to Agency a copy of any notice of default Owner receives from any Third-Party Lender within three (3) business days following Owner's receipt thereof. 8.4 Mortgagee Protection. No violation of any provision contained herein shall defeat or render invalid the lien of any mortgage or deed of trust made in good faith and for value upon all or any portion of the Project or the Property, and the purchaser at any trustee's sale or foreclosure sale shall not be liable for any violation of any provision hereof occurring prior to the acquisition of title by such purchaser. Such purchaser shall be bound by and subject to this Agreement from and after such trustee's sale or foreclosure sale. Promptly upon determining that a violation of this Agreement has occurred, Agency shall give written notice to the holders of record of any mortgages or deeds of trust encumbering the Project or the Property that such violation has occurred. 9. Default and Remedies. 9.1 Events of Default. The occurrence of any one or more of the following events shall constitute an event ~of default hereunder ("Event of Default"): (a) The occurrence of a Transfer in violation of Section 8 hereof; (b) Owner's failure to maintain insurance on the Property and the Project as required hereunder, and the failure of Owner to cure such default within 10 days; 1422347.2 14 (c) Subject to Owner's right to contest the following charges, Owner's failure to pay taxes or assessments due on the Property or the Project or failure to pay any other charge that may result in a lien on the Property or the Project, and Owner's failure to cure such default within 30 days of delinquency; (d) A default arises under any loan secured by a mortgage, deed of trust or other security instrument recorded against the Property and remains uncured beyond any applicable cure period such that the holder of such security instrument has the right to accelerate repayment of such loan; (e) An event of default has been declared under the OPA, the Note or the Deed of Trust; (f) Owner's default in the performance of any term, provision or covenant under this Agreement I;other than an obligation enumerated in this Subsection 9~1 ,and unless such provision specifies a shorter cure period for such default, the continuation of such default for ten (10) days in the event of a monetary default or thirty (30) days in the event of anon-monetary default following the date upon which Agency shall have given written notice of the default to Owner, or if the nature of any such non- monetary default is such that it cannot be cured within 30 days, Owner's failure to commence to cure the default within thirty (30) days and thereafter prosecute the curing of such default with due diligence and in good faith, but in no event longer than ninety (90) days from receipt of the notiice of default. 9.2 Remedies. Upon the occurrence of an Event of Default and its continuation beyond any applicable cure period, Agency may proceed with any of the following remedies: A. Bring an action for equitable relief seeking the specific performance of the terms and conditions of this Agreement, and/or enjoining, abating, or preventing any violation of such terms and conditions, and/or seeking declaratory relief; B. Accelerate and declare the balance of the Note and interest accrued thereon immediately due and payable and proceed with foreclosure under the Deed of Trust; C. For violations of obligations with respect to rents for Restricted Units, impose as IiquidatE~d damages a charge in an amount equal to the actual amount collected in excess of the Affordable Rent; D. Pursue any other remedy allowed at law or in equity. Each of the remedies provided herein is cumulative and not exclusive. The Agency may exercise from time 'to time any rights and remedies available to it under applicable law or in equity, in addition to, and not in lieu of, any rights and remedies 1422347.2 15 expressly provided in this Agreement. 10. Indemnity. Owner shall indemnify, defend (with counsel approved by Agency) and hold Agency, the City, and their respective elected and appointed officers, officials, employees, agents, and representatives (collectively, the "Indemnitees") harmless from and against all liability, loss, cost, expense (including without limitation attorneys' fees and costs of litigation), claim, demand, action, suit, judicial or administrative proceeding, penalty, deficiency, fine, order, and damage (all of the foregoing collectively "Claims") arising directly or indirE~ctly, in whole or in part, as a result of or in connection with Owner's construction, mana~~ement, or operation of the Property and the Project or any failure to perform any obligation as and when required by this Agreement. Owner's indemnification obligations under this Section 10 shall not extend to Claims resulting solely from the gross negligence or willful misconduct of Indemnitees. The provisions of this Section 10 shall survive the Expiration or earlier termination of this Agreement. It is further agreed that Agency does not and shall not waive any rights against Owner that it may have by reason of this indennnity and hold harmless agreement because of the acceptance by Agency, or the deposit with Agency by Owner, of any of the insurance policies described in this Agreement or the OPA. 11. Miscellaneous. 11.1 Amendments. This> Agreement may be amended or modified only by a written instrument signed by botr~ Parties. 11.2 No Waiver. Any waiver by Agency of any term or provision of this Agreement must be in writing. No waiver shall be implied from any delay or failure by Agency to take action on any breach or default hereunder or to pursue any remedy allowed under this Agreement or applicable law. No failure or delay by Agency at any time to require strict performancE: by Owner of any provision of this Agreement or to exercise any election contained (herein or any right, power or remedy hereunder shall be construed as a waiver of any other provision or any succeeding breach of the same or any other provision hereof or a relinquishment for the future of such election. 11.3 Notices. Except as otherwise specified herein, all notices to be sent pursuant to this Agreement shall) be made in writing, and sent to the Parties at their respective addresses specified k~elow or to such other address as a Party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by: (i) personal delivery, in which case notice is effective upon delivery; (ii) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered upon receipt if delivery is confirmed by a return receipt; 1422347.2 16 (iii) nationally recoclnized overnight courier, with charges prepaid or charged to the sender's account, in which case notice is effective on delivery if delivery is confirmed by tree delivery service; (iv) facsimile transrission, in which case notice shall be deemed delivered upon transmittal, provided that (a) a duplicate copy of the notice is promptly delivered by first-class or certified mail or by overnight delivery, or (b) a transmission report is generated reflecting the accurate transmission thereof. Any notice given by facsirile shall be considered to have been received on the next business day if it is received after 5:00 p.m. recipient's time or on a nonbusiness day. Agency: Redevelopment Agency of the City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attention: Executive Director Owner: Giffra Enterprises, LLC 240 Grand Avenue South San F=rancisco, CA 94080 Attention: Greg Giffra Facsimile: Ei50-239-3604 With copy to: Ronald P. Albert Attorney At ILaw 66 George Lane, Suite 101 Sausalito, CA 94965 Facsimile: 415-332-9216 11.4 Further Assurances. The Parties shall execute, acknowledge and deliver to the other such other documents and instruments, and take such other actions, as either shall reasonably request ass may be necessary to carry out the intent of this Agreement. 11.5 Parties Not Co-Venturers. Nothing in this Agreement is intended to or shall establish the Parties as partners, co-venturers, or principal and agent with one another. 11.6 Action by the Agent. Except as may be otherwise specifically provided herein, whenever any approval, inotice, direction, consent or request by the Agency is 1422347.2 17 required or permitted under this Agreement, such action shall be in writing, and such action may be given, made or taken by the Agency Executive Director or by any person who shall have been designated by the Agency Executive Director, without further approval by the governing board of the Agency. 11.7 Non-Liabilit o~ f AgE~ncy and Agency Officials, Employees and Agents. No member, official, employee or agent of the Agency or the City shall be personally liable to Owner or any successor in interest, in the event of any default or breach by the Agency, or for any amount of money which may become due to Owner or its successor or for any obligation of Agency unnder this Agreement. 11.8 Headings; Construction. The headings of the sections and paragraphs of this Agreement are for convenience only and shall not be used to interpret this Agreement. The language of this Agreement shall be construed as a whole according to its fair meaning and not strictly for or against any Party. 11.9 Time is of the Essence. Time is of the essence in the performance of this Agreement. 11.10 Governing Law. This Agreement shall be construed in accordance with the laws of the State of Californi<~ without regard to principles of conflicts of law. 11.11 Attorneys' Fees and Costs. If any legal or administrative action is brought to interpret or enforce the terms of this Agreement, the prevailing party shall be entitled to recover all reasonable attorneys' fees and costs incurred in such action. 11.12 Severability. If any provision of this Agreement is held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining pirovisions shall not be affected or impaired thereby. 11.13 Entire Agreement; Exhibits. This Agreement, together with the OPA, the Note and the Deed of Trust contains the entire agreement of Parties with respect to the subject matter hereof, and supersedes all prior oral or written agreements between the Parties with respect thereto. Exhibits A through C, attached hereto are incorporated herein by this reference. 11.14 Counter arts. Thi:> Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement. SIGNATURES ON FOLLOWING PAGE. 1922347 .2 18 IN WITNESS WHEREOF„ the Parties have executed this Affordable Housing Regulatory Agreement and Decl<~ration of Restrictive Covenants as of the date first written above. OWNER GIFFRA ENTERPRISES, LLC, a California limited liability comp<~ny By: Name: Title: AGENCY REDEVELOPMENT AGENCY OAF THE CITY OF SOUTH SAN FRANCISCO, a public body corporate and polii:ic By: Name: Title: ATTEST: By: Agency Secretary APPROVED AS TO FORM: By: Agency Counsel SIGNATURES MUST BE NOTARIZED. 1422347.2 19 STATE OF CALIFORNIA COUNTY OF SAN MATED On , 20_, before rne, , (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. 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) STATE OF CALIFORNIA COUNTY OF SAN MATED On , 20_, before me, , (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) islare 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 PERJURI~' under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature 1422347.2 (Seal) 20 Exhibit A PROPERTY (Attach legal description.) 1422347.2 21 Exhibit B INSURANCE REQUIREMENTS Prior to initiating work on lrhe Project and continuing through throughout the term of this Agreement, Owner shall obtain and maintain the following policies of insurance: (a) a commercial general liability policy in the amount of One Million Dollars ($1,000,000) each occurrence, Two Million Dollars ($2,000,000) annual aggregate, together with Three Million Dollars ($3,000,000) excess liability coverage, or such other policy limits as Agency may require in its reasonable discretion, including coverage for bodily injury, property damage, products, completed operations and contractual liability coverage. Such policy or policies shall be written on an occurrence basis and shall name the Indemnitees as additional insureds. (b) a comprehensive automobile liability coverage in the amount of One Million Dollars ($1,000,000), combined single limit including coverage for owned and non-owned vehicles and shall furnish or cause to be furnished to Agency evidence satisfactory to Agency that OwnE~r and any contractor with whom Owner has contracted for the performance of work on the Property or otherwise pursuant to this Agreement carries workers' compensation insurance as required by law. Automobile liability policies shall name the Indemnitees as additional insureds. (c) Upon commencement of construction and continuing until issuance of a Certificate of Completion, Owneir and all contractors working on behalf of Owner shall maintain a policy of builder's all-frisk insurance in an amount not less than the full insurable cost of the Project on <~ replacement cost basis naming Agency as loss payee. (d) Owner shall maintain property insurance covering all risks of loss (other than earthquake), including flood (if required) for 100% of the replacement value of the Project with deductible, if any, in an amount acceptable to Agency, naming Agency as loss payee. (e) Companies writing the insurance required hereunder shall be licensed to do business in the State of California. Insurance shall be placed with insurers with a current A.M. Best's rating of no less than A: VII. The Commercial General Liability and comprehensive automobile policies required hereunder shall name the Indemnitees as additional insureds. Builder's Risk and property insurance shall name Agency and City as loss payees as their interests may appear. (f) Prior to commencE~ment of construction, Owner shall furnish Agency with certificates of insurance in form acceptable to Agency evidencing the required insurance coverage and duly executed endorsements evidencing such additional 1422347.2 22 insured status. The certificates shall contain a statement of obligation on the part of the carrier to notify City and Agency of any material adverse change, cancellation, termination or non-renewal of the coverage at least thirty (30) days in advance of the effective date of any such material adverse change, cancellation, termination or non- renewal. (g) If any insurance policy or coverage required hereunder is canceled or reduced, Owner shall, within fiftE~en (15) days after receipt of notice of such cancellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with Agency and City a certificate showing that the required insurance has been reinstated or provided through another insurance company or companies. Upon failure to so file such certii~icate, Agency or City may, without further notice and at its option, procure such insurance coverage at Owner's expense, and Owner shall promptly reimburse Agency or City for such expense upon receipt of billing from Agency or City. (h) Coverage provided by Owner shall be primary insurance and shall not be contributing with any insurance, or self-insurance maintained by Agency or City, and the policies shall so provide. The insurance policies shall contain a waiver of subrogation for the benefit of the City and Aciency. Owner shall furnish the required certificates and endorsements to Agency prior to the commencement of construction of the Project, and shall provide Agency with certifiE~d copies of the required insurance policies upon request of Agency. 1422347.2 23 Exhibit C RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Redevelopment Agency of the City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: Executive Director Space above this line for Recorder's use. NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY THIS NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (this "Notice") is dated as of , 2010 with reference to that certain real property located at 228 and 236 Grand Avenue in South San Francisco, California, known as ;San Mateo County Assessor's Parcel Nos. 012-315- 130 and 012-315-140, and more particularly described in Exhibit A attached hereto (the "Property"). 1. The Redevelopment Agency of the City of South San Francisco, a public body, corporate, and politic ("Agency") and Giffra Enterprises, LLC, a California limited liability company ("Owner") nave entered into that certain Affordable Housing Regulatory Agreement and DE~claration of Restrictive Covenants (the "Regulatory Agreement") dated as of , 2010 and recorded in the Official Records of San Mateo County substantially concurrently herewith. 2. The Regulatory Agreemennt requires not less than ten (10) of the residential units developed on the Property to be rented at affordable rents to households whose income is less than or equal to one hundred twenty percent (120%) of Area Median. 3. The restrictions set forth in the Regulatory Agreement will be in effect for a period of fifty-five (55) years, commencing on the date of issuance of a final certificate of occupancy for each phase of the Project developed on the Property. This Notice is intended to provide notice of documents that affect title to the Property. Reference should be made to the Regulatory Agreement for a more detailed description of all matters described in this Notice. In the event of any conflict between the terms of this Notice and the terms of the Regulatory Agreement, the Regulatory Agreement shall prevail. 1422347.2 24 This Notice is being recorded and filed in compliance with California Health and Safety Code Section 33334.3(f)(3) and (4), and shall be indexed by the Agency and the current owner of the Property. IN WITNESS WHEREOF, Owner and Agency have executed this Notice as of the date first written above. OWNER GIFFRA ENTERPRISES, LLC, a California limited liability company By: Name: Title: REDEVELOPMENT AGENCY CIF THE CITY OF SOUTH SAN FRANCISCO, a public body corporate and polii:ic By: Name: Title: ATTEST: By: Actency Secretary APPROVED AS TO FORM: By: Agency Counsel 1422347.2 25 Exhibit A PROPERTY (Attach legal description.) 1422347.2 26 Recording requested by and when recorded mail to: Redevelopment Agency of the City of South ~~an Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: Executive Director EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE ~~6103, 27383 Space above this line for Recorder's use. CERl'IFICATE OF COMPLETION This Certificate of Completion (this "Certificate") is made by the Redevelopment Agency of the City of South San Francisco, a public body, corporate, and politic ("Agency") effective as of , 20 RECITALS A. Agency and Giffra Enterprises, LLC, a California limited liability company ("Owner") entered into that certaiin Owner Participation and Loan Agreement (the "OPA") dated as of , 2010 concerning the rehabilitation of certain real property located in the City of South San Francisco, California and more particularly described in Exhibit A attached hereto (the "Property"). A Memorandum of the OPA was recorded in the Official Records of San Mateo County ("Official Records") as Instrument No. ,Book; ,Page .Capitalized terms used herein without definition shall have the meaning ascribed to such terms in the OPA. B. Pursuant to Sectioin 3.15 of the OPA, the Agency is required to furnish the Owner or its successors with a Certificate of Completion upon completion of rehabilitation of the Property in accordance with the OPA. C. The Agency has determined that the rehabilitation of the Property has been satisfactorily completed in accordance with the OPA. NOW, THEREFORE, AgE:ncy hereby certifies as follows: 1. Rehabilitation of the Property has been satisfactorily completed in conformance with the OPA. 2. All use, maintenance and nondiscrimination covenants contained in the OPA shall remain in effect and Enforceable in accordance with the OPA. This Certificate does not constitute evidence of Owner's compliance with those covenants in the OPA that survive the issuance of this Certificate, including without limitation, compliance with the Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants entered into pursuant to the OPA and recorded in the Official Records as Instrument No. Book ,Page 1422349-2 3. This Certificate doers not constitute evidence of compliance with or satisfaction of any obligation of Owner to any holder of a deed of trust securing money loaned to finance the Improvements or any part thereof and does not constitute a notice of completion under California Civil Code Section 3093.3. 4. Nothing contained iin this instrument shall modify any provisions of the OPA or any other document executed in connection therewith. IN WITNESS WHEREOF, Agency has executed and issued this Certificate of Completion as of the date first written above. REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO By: FORM-DO NOT SIGN Name: Executive Director ATTEST: By: FORM- DO NOT SIGN Agency Secretary APPROVED AS TO FORM: By: FORM-DO NOT SIGN Agency Counsel SIGNATURES MUST BE NOTARIZED. ]422349-2 2 Exhibit A PROPERTY (~~ttach legal description.) 1422349-2 ~,"".....> I _... >, ~M s> a J X 3 r. _. - ."'^~ .M I~ g ~ ~~ ~..> ` _SN j t, ; R xz C ~ ~- S 3 C ~ :1 ° 0 m s ;~~/ NO m ~ "~. yv xm N' ?~ i ~ti N~ ~\~~ aN nM m \ a p D m A ~ O x N o a 0 2 O o~ ~ ~ Z m g O m _ A Z - O O Z V ~ 0 ,Z 1 ~~ N OD.~ZNN D v~~mm mAVyVyn~mOD N ~ SSAACOp~D D w omO+ ~' 000 G, ~~QO°oT T .. .. yO AT y Nq ~. .. 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