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HomeMy WebLinkAbout2015-12-09 e-packet@7:01Meeting to be held at MUNICIPAL SERVICES BUILDING COUNCIL CHAMBERS 33 ARROYO DRIVE SOUTH SAN FRANCISCO, CA WEDNESDAY, DECEMBER 9, 2015 7:01 P.M. NOTICE IS HEREBY GIVEN, pursuant to Section 54956 of the Government Code of the State of California, that the Successor Agency to the City of South San Francisco Redevelopment Agency will hold a Special Meeting on Wednesday, the 9h day of December, 2015, at 7:01 P.M., in the Municipal Services Building, Council Chambers, 33 Arroyo Drive, South San Francisco, California. Purpose of the meeting: 1. Call to Order. "son 111, 4 Im. " 3. Agenda Review, 4. Public Comments — comments are limited to items on the Special Meeting Agenda. 5. Resolution approving a Disposition Development Agreement (DDA) between the City of South San Francisco, the Successor Agency to the Redevelopment Agency of the City of South San Francisco, and Brookwood Equities LLC for 201-219 Grand Avenue. (Billy Gross, Senior Planner). 6. Approval of a License Agreement authorizing PG&E to temporarily use a vacant property on Antoinette Lane for a contractor office, staging area and employee parking. (Mike Lappen, ECD Housing). 7. Adjournment. rk/,,/ Staff Report DATE: December 9, 2015 TO: Mayor, Vice Mayor and Councilmembers Chair and Successor Agency Board FROM: Alex Greenwood, Director of Economic and Community Development SUBJECT: A. DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE CITY OF SOUTH SAN FRANCISCO, THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO, AND BROOKWOOD EQUITIES, LLC FOR 201 -219 GRAND AVENUE AND 418 LINDEN AVENUE B. USE PERMIT, DESIGN REVIEW, PARKING REDUCTION AND AFFORDABLE HOUSING AGREEMENT TO CONSTRUCT THE 255 CYPRESS AVENUE MIXED -USE DEVELOPMENT (A NEW 5 -STORY MIXED -USE BUILDING WITH APPROXIMATELY 6,000 SQUARE FEET OF COMMERCIAL SPACE AND 46 RESIDENTIAL UNITS IN THE GRAND AVENUE CORE (GAC) ZONING DISTRICT) AND THE 418 LINDEN AVENUE MULTI - FAMILY RESIDENTIAL DEVELOPMENT (A NEW 5- STORY RESIDENTIAL DEVELOPMENT CONSISTING OF 38 APARTMENTS IN THE DOWNTOWN TRANSIT CORE (DTC) ZONING DISTRICT, IN ACCORDANCE WITH CHAPTERS 20.280, 20.300, 20.330, 20.380, 20.480 AND 20.490. RECOMMENDATION It is recommended that the City Council and Successor Agency Board each take the following action: 1. Adopt a Resolution approving a Disposition and Development Agreement with Brookwood Equities LLC for the acquisition and development of two Downtown area sites. It is recommended that the City Council (only) take the following actions: 2. Follow the recommendation of the Planning Commission and adopt a Resolution making findings and approving the entitlements for 255 Cypress Avenue (Planning Project P15 -0017, including UP15 -0003, DR15 -0016, and PE15 -0001) based on the attached draft findings and subject to the attached draft conditions of approval. 3. Follow the recommendation of the Planning Commission and adopt a Resolution making findings and approving the entitlements for 418 Linden Avenue (Planning Project P15 -0016, including UP15 -0002, DR15 -0015, PE15 -0002 and AHA15 -0004) Staff Report Subject: Brookwood Group — Downtown Development Projects Date: December 9, 2015 Page: 2 of 16 based on the attached draft findings and subject to the attached draft conditions of approval. BACKGROUND The Council and the Successor Agency previously approved an Exclusive Negotiating Rights Agreement (ENRA) with Brookwood Equities, LLC (Brookwood) for the development of two sites: 201 -219 Grand Avenue (parcels acquired by the former redevelopment agency now owned by the Successor Agency) and 418 Linden Avenue (parcel donated to the City to fulfill an affordable housing requirement as part of the Terra Bay development project). The ENRA provided funding from City affordable housing bonds for Brookwood to advance the design of the projects and receive approval of preliminary plans from the Planning Commission. This has been accomplished, and the next step is to approve the project entitlements and Disposition and Development Agreement (DDA) and associated documents. Throughout the remainder of this staff report, the properties at 201 -219 Grand Avenue will be referred to as "255 Cypress ", which is the chosen address for the mixed -use development project. The property at 418 Linden Ave is referred to in the project drawings and the May 21, 2015 Planning Commission staff report as 488 Linden, which will be the revised address for that project. However, for consistency within this staff report, the project will continue to be referred to as "418 Linden ". Together, the 255 Cypress project, 418 Linden project and DDA consist of the overall "Project ". The Project will provide the following benefits to the City: • Create 84 housing units in the Downtown that will help activate Grand Avenue and Linden Avenue retail and restaurants and provide housing consistent with the Downtown Station Area Specific Plan. • Create 17 units of affordable housing consistent with the City's Housing Element. • Provide community benefits including a public retail plaza. • Retain active ground floor retail /restaurant uses at a key Grand Avenue corner. • Add new revenues to the City's General Fund with ongoing new property taxes and one- time land sale proceeds. The remainder of this staff report is structured in three separate sections, as follows: 1. Summary of the major elements of the DDA 2. Overview of the 255 Cypress Ave mixed -use project 3. Overview of the 418 Linden Ave residential project DISPOSITION AND DEVELOPMENT OF COMBINED PROPERTIES The Parties negotiated a DDA to identify specific terms related to the completion of design development, financing of the project, conveyance of the property, and completion of construction. Following is a summary of the primary elements. Staff Report Subject: Brookwood Group — Downtown Development Projects Date: December 9, 2015 Page: 3 of 16 Affordable Housing Twenty percent (20 %) of the residential units in the Project as a whole will be rented at an affordable cost (as defined in the Regulatory Agreement), and for a term of 55 years. This results in a total of 17 units that are affordable, including three moderate - income (120 %) units, and 14 lower income (80 %) units. Grant Assistance The project's income and value has been impacted by the inclusion of affordable units, and therefore an offset is needed to make the development economically viable. The ENRA provides for City grants to help pay for the affordable units and to assist with the costs of design. The DDA provides a total of $2,135,000 in assistance, a portion of which ($900,000) has already been drawn down pursuant to the ENRA for the preparation of preliminary plans and Planning Commission approvals. These funds are available from the affordable housing bonds proceeds and affordable housing in -lieu fund. The balance of the grant funds will be expended as part of design development and construction drawings over the next few months. In the event the DDA is terminated due to default in the future, the City would retain ownership of all entitlement and design work that has been done to date. HEART Equity Assistance In addition to the City assistance provided for the affordable units, the developer has applied for financial assistance from HEART for a portion of the development equity required. A preliminary commitment of $1.2 million has been obtained to assist with the provision of the 17 affordable units. Land Purchase Price The purchase price for the parcels is equivalent to their current appraised value: $2,020,000 for the Cypress site, and $1,388,000 for the Linden Site. The combined price equals $3,408,000. City Loan for Land Acquisition At the time the ENRA was adopted the land value was unknown, and was estimated at $50 to $80 per square foot. During the course of obtaining project design approvals from the Planning Commission, the City undertook an appraisal of the properties and the land values are substantially higher than previously estimated ($100 - $103 per square foot appraised value). This results in an increase in land value of approximately $1.5 million for the two sites combined. Structuring the land payment so that it is paid over time can offset the impact of the increased land value. The Council previously approved the payment of the land value as a loan as part of the ENRA approval. The land loan is proposed to have the following terms: • Land payments based on full market land values per the appraisals. • Annual loan payments based on 2% of land value ($40,000 annually for Cypress, $27,750 annually for Linden), to start one year after occupancy (to allow rent up and income stabilization). Staff Report Subject: Brookwood Group — Downtown Development Projects Date: December 9, 2015 Page: 4 of 16 • Term of 30 years, with full amount due payable when the developments are sold or end of 30 year term, whichever is sooner. • Interest is payable at 1%. • The loan may be prepaid at developer option any time during the term. • Land conveyance from City to developer contingent on the project being ready to start construction: all financing in place and building permits issued. Private Equity and Loan Financing In addition to the public equity contributions detailed above, there will be substantial private equity devoted to the development as well. Brookwood is in negotiations with potential project lenders and equity sources. Brookwood will form a partnership or LLC with an equity source that will contribute the required equity for the project to be financed. The estimated private equity that will be invested totals approximately $11.5 million. The developer will be required to obtain a preliminary financing commitment for the equity financing (Term Sheet) within 45 days of the DDA approval or the City /Sucessor Agency has the right to terminate the agreement, effective immediately. The remaining funds for the development will take the form of a loan from private sources of approximately $31.6 million. A firm commitment of these loan funds must be obtained prior to the conveyance of the property and no later than 12 months after the adoption of the DDA. Development Schedule The developer intends to move as quickly as possible to advance the project. Note that the following time frames are the maximums allowed under the terms if the DDA: • Retail broker engaged for retail leasing — within 30 days of the effective date of the DDA. • Preliminary financing commitment - (term sheet from equity sources) — 45 days after effective date of the DDA; and within 60 days thereafter an executed joint venture agreement for the equity portion of the financing. • Preliminary retail leases — Lease commitments are due within 6 months of the DDA execution for 50% of the space. • Disbursement of remaining grant funds — as costs are incurred through design development commencing immediately after DDA approval. • Final Financing, building permits, and conveyance of property — the property will not be conveyed until all permits are received and all financing is in place, including loan funds. This must occur prior to start of construction. • Start of construction — must occur no later than 12 months from the approval of the DDA. • Completion of construction — must occur within 16 months of start of construction (note: this can be extended due to natural disasters or other "force majeure" events). Staff Report Subject: Brookwood Group — Downtown Development Projects Date: December 9, 2015 Page: 5 of 16 Default Provisions The agreement provides that in the event of developer failure to perform any of the above milestones, the City can declare a default and terminate the DDA. For the requirement for submittals of the equity portions of the financing the termination is effective immediately with no cure period for the default. As noted above, if the DDA is terminated the City will own all rights to the plans and project entitlements. Public Benefits of Development Proceeding • Implements Adopted Council Downtown Policies - The project is aligned with, and will implement the Downtown Area Specific Plan. The development will implement the concept of higher density development in proximity to transit, will provide mixed -use for the Cypress /Grand development, will implement the streetscape improvements of wider pedestrian oriented sidewalks, and will create a new public open space plaza. • Implements Adopted Council Housing Policies - The development will assist the City with implementing its Housing Element policies and its ABAG regional fair share housing goals for a mix of workforce and market rate housing. The new units will provide housing for workers in the City's commercial areas, which will help create a balance of jobs and housing which is both a local and regional goal. • Promotes Active Ground Floor Retail uses on Grand Avenue - Consistent with the Downtown Specific Plan, the Grand Cypress project will have active ground floor uses at a key Grand Avenue corner. • Implements Adopted Council Climate Action Plan Policies — To the extent that the City can promote the development of new housing near its commercial job centers, it will allow greater use of alternative transportation modes (walking, biking, transit) that will reduce auto trips and greenhouse gas reduction in conformance with the goals of the City's Climate Action Plan. • Serves as Catalyst for Community Development Objectives — The development will have a catalytic effect for future new private development by demonstrating to the market that downtown investment can be economically successful. Further, the developments will redevelop underutilized parcels and put them back on the tax rolls. • Creates Construction Jobs — The development will pay area standard wage and will support local labor and construction workers with new construction employment. • Provides New Revenues to the City, County and Schools — The combined value of the developments is estimated at $46 million. This will produce new revenues for all of the taxing entities, the largest of which are the County, the South San Francisco Unified School District (SSFUSD) and the City. The parcels are currently generating no property tax revenue, as they are not on the tax rolls due to public ownership. The loan repayments Staff Report Subject: Brookwood Group — Downtown Development Projects Date: December 9, 2015 Page: 6 of 16 will also produce annual revenues to the taxing entities. Table 1 summarizes the annual revenues that the developments will produce for the City (only): Table 1: Summary of City Revenues* ITEM CYPRESS LINDEN TOTALS Development Value ** $ 26,600,000 $ 19,500,000 $ 46,100,000 City Property Taxes * ** $ 42,500 $ 31,200 $ 73,700 (Annual) City Land Payments $ 6,400 $ 27,750 $ 34,150 (One -Time) *Does not include non -City revenues "Not including land value, rounded ***At 16 %, rounded Disposition Document Approvals Required The DDA and its various attachments that will require approval and execution to be effective are attached to this staff report (Attachment l.c). They include: • The Disposition and Development Agreement • Housing Regulatory Agreement • Deed of Trust • Promissory Note for the Loan Oversight Board and Department of Finance Approvals The 418 Linden parcel is owned by the City and was not acquired by the redevelopment agency. Therefore, its disposition will not be subject to Oversight Board approval. The 255 Cypress parcels however, are owned by the Successor Agency and their disposition will be subject to Oversight Board approval. If the Oversight Board finds the disposition to be consistent with the approved Long Range Property Management Plan (LRPMP) there will be no State Department of Finance approval required. The LRPMP calls for the properties to be sold pursuant to a Successor Agency disposition agreement that results in a new development, rather than a simple as -is sale. The rationale is that the development of the parcels pursuant to the City's land use policies will produce significantly more property tax revenues over time to all of the taxing entities than a sale as -is. This is demonstrated in projections that are part of the LRPMP. The City will receive a portion of these new revenues, as it is one of the taxing entities sharing the overall property tax pie. The projected City revenues are set forth in Table 1 above. When the Oversight Board approved the Brookwood ENRA (which was subsequently approved by the State Department of Finance), the ENRA provided that the value of the land would be paid over time as a loan. The amount of the land proceeds at that time was lower as the appraisal had not been completed. With the new appraised land value the taxing entities that the Oversight Board represents will receive more revenues than anticipated. As far as Oversight Board approvals are concerned, the proposed transaction is consistent with the Oversight Board approved LRPMP, is similar to the land loan already approved in the ENRA, and the amount of revenues exceeds prior expectation. Staff Report Subject: Brookwood Group — Downtown Development Projects Date: December 9, 2015 Page: 7 of 16 255 CYPRESS AVENUE MIXED -USE DEVELOPMENT PROJECT Figure 1. 255 Cypress Architecture The proposed project at 255 Cypress Ave is for a 5 story high- density mixed -use building that will be approximately 60 feet tall. The ground floor will consist of approximately 5,500 square feet of commercial area fronting on Grand and Cypress Avenues, within two blocks of the proposed Caltrain plaza on Airport Blvd. The ground floor will also include the residential entrance lobby on Cypress Ave, a leasing office and resident lounge. Parking will be accessed from 3rd Lane. The upper four stories will consist of 46 apartment units, including a mix of three studio units, 21 one - bedroom units and 22 two - bedroom units. The proposed project has been designed to provide high - quality family housing near a regional transit station, in keeping with the vision pursued by the City for this area over the past 15 years. The architectural style of the portion of the building fronting on Grand Ave is designed to evoke the general building architecture and massing of the remainder of the Grand Ave corridor. The Cypress Ave frontage includes both a commercial area and the primary residential entrance. The massing of the building is broken up by using a mixture of exterior materials, including stucco, horizontal board siding, and brick the with large expanses of transparent storefronts. The building massing and design will set a high standard for future redevelopment along Grand Ave. A formal neighborhood meeting was held in April 2015 to introduce the project for which entitlements were being sought. The Planning Commission held a public hearing on May 21, 2015, to consider the design of the project and the requested entitlements, which it recommended to the City Council by a vote of 6 -0. Staff Report Subject: Brookwood Group — Downtown Development Projects Date: December 9, 2015 Page: 8 of 16 DISCUSSION (A complete discussion of Development Policies related to the Downtown Station Area Specific Plan Area and the 255 Cypress Avenue project is contained in Attachment 4.a, the Planning Commission staff report from May 21, 2015.) Figure 2. Project Area Development Policies In January and February of 2015, the City Council adopted the Downtown Station Area Specific Plan ( "DSASP "), as well as amendments to the City's Zoning Ordinance, adding Chapter 20.280 "Downtown Station Area Specific Plan District" to implement the policies and goals in the DSASP. The DSASP covers properties within 0.5 miles of the City's Caltrain Station, which includes the subject property. The General Plan amendments created separate land use designations in keeping with the DSASP. For the subject site, the designation is Grand Avenue Core ( "GAC "). This designation applies to properties with frontage on Grand Ave between Airport Blvd and Spruce Ave. Grand Ave is intended to remain the historic retail center of the City, with historically interesting buildings retained wherever possible. New mixed -use development of underutilized properties is encouraged but guidelines limit building heights directly along Grand Ave in order to respect the historic character of some existing buildings and to create a comfortable pedestrian environment. On the rear portions of Grand - facing lots, taller allowable heights are intended to accommodate new residential uses and increase development opportunities. The GAC allows up to 60 dwelling units per acre; a minimum of 14 dwelling units per acre is required. A maximum of 100 dwelling units per acre would be allowed for development on corner sites meeting specified criteria. Ground level retail uses are required. Finally, the Housing Element of the General Plan, which is required by state law to identify how and where housing needs of the community will be met, identifies the subject site as a near -term housing site. Staff Report Subject: Brookwood Group — Downtown Development Projects Date: December 9, 2015 Page: 9 of 16 Community Benefits The maximum density allowed by -right in the GAC district is 60 units per acre and the maximum FAR allowed by -right is 3.0. The maximum density allowed with an incentive program is 100 units per acre and the maximum FAR is 4.0. The project proposes a maximum density of 99 units per acre, resulting in a total of 46 residential units, and an FAR of 3.69. To allow the increased density of 18 units and increased FAR, the applicant is proposing to provide public benefits as discussed in more detail on page 5 of this staff report, and including the following project specific benefits: • Public space at the retail plaza. • Local business retention by providing a right of first offer of tenant space to Ben Tre and Mom's Tofu in the new building. The Planning Commission supported the proposed Use Permit to allow increased density for the project because the proposed public benefits and requested development incentive are suitable to the site and to adjacent uses and structures, the proposed public benefits are consistent with the accepted list of public benefits, and reflect a fair balance of costs and benefits to the applicant and the City. Planning Commission Meeting The Planning Commission held a public hearing on the project on May 21, 2015. Two members of the public spoke on the project, with concerns related to the proposed architecture and to the impacts of the project on the adjacent building at 223 -225 Grand Ave. Planning Commission Discussion The Planning Commission was generally supportive of the project as it furthered the goals of the Downtown Station Area Specific Plan and fulfilled a need to provide new types of housing throughout the City. The Commissioners had questions related to the proposed mechanical parking stackers and with public parking in the general area, suggesting that proper wayfinding be incorporated into the entire downtown. The Commission also suggested that the sidewalk landscaping, including trees, should be considerate of impacts on signage and users. The Commission supported the concept of a parklet replacing one or two parking spaces on Cypress. also supported having multiple vehicle access points to the development. The Planning Commission recommended approval of the proposed project by a vote of 6 -0. (Again, this item is referred to in Attachments 4.a -b). General Plan Consistency The General Plan Land Use Designation for the site is Grand Avenue Core. The General Plan includes specific policies related to development within the Downtown, in an effort to "encourage development of Downtown as a pedestrian - friendly mixed -use activity center with retail and visitor - oriented uses, business and personal services, government and professional offices, civic uses, and a variety of residential types and densities." Staff Report Subject: Brookwood Group — Downtown Development Projects Date: December 9, 2015 Page: 10 of 16 The proposed project will conform to the General Plan Land Use Policies by reusing an underutilized site to construct a high - density mixed -use development that will provide a pedestrian - friendly mixed -use activity center on Grand Avenue in close proximity to the improved Caltrain Station. The project also provides a strong architectural statement that is both in keeping with existing buildings on Grand Ave and is a gateway development near the eastern entrance to the Grand Ave corridor. The Project, which was considered and recommended by the Planning Commission as consistent with the General Plan, implements the goals of the Downtown Station Area Specific Plan, and the project design is consistent with the City's Design Guidelines as it relates to building design, form and articulation. Housing Element Opportunity Sites The Housing Element is one of the seven State - mandated Elements of the General Plan. Unlike other elements, the Housing Element must be updated by deadlines set by the State; the Housing Element for the housing cycle of 2015 -2022 was certified by the State in April 2015. The Housing Element is the blueprint for future housing development in the city and includes goals, policies, and programs that direct residential decision - making. The Housing Element is required by state law to identify how and where the housing needs of each community will be met. For the upcoming housing cycle, the City of South San Francisco has a Regional Housing Needs Allocation ( "RHNA ") of 1,864 units. To show that the City has properly zoned land to meet the RHNA numbers, the City is required to identify adequate opportunity sites throughout the jurisdiction. The available site inventory focuses on sites with near -term development potential, typically where the site is currently vacant or highly underutilized. In the recently certified Housing Element, the Downtown area was identified as providing many potential opportunity sites, including the subject site, which was included as a portion of "Site 12 ". Assuming a density of 64 dwelling units per acre, less than then maximum density allowed within the Grand Avenue Core district, the site was identified as being able to accommodate at least 31 units. The proposed project would exceed this projection by building at a higher density, and therefore would comply with the General Plan Housing Element. Environmental Review The City adopted the DSASP on February 11, 2015. The DSASP EIR was prepared as a Program EIR, pursuant to Section 15168 of the California Environmental Quality Act ( "CEQA "), and this document was certified by the City Council following public review and comment. The DSASP EIR found that significant and unavoidable impacts would result from future development anticipated in the DSASP in regards to Air Quality, Cultural Resources, Noise and Traffic /Transportation. In addition, the DSASP EIR included a Mitigation Monitoring and Reporting Program ( "MMRP ") that identified mitigation measures required of development projects within the DSASP Area to show that the project components are within the environmental parameters analyzed in the DSASP EIR. These include the following additional studies: Staff Report Subject: Brookwood Group — Downtown Development Projects Date: December 9, 2015 Page: 11 of 16 Air Quality • MM4.2 -3 — A Health Risk Assessment (HRA) shall be prepared by a qualified air quality professional for development of a project that would introduce new sensitive receptors in the study area within the allowable siting distance. If a potentially significant health risk is identified, the HRA shall identify appropriate measures to reduce the potential health risk to below significant levels. A "255 Cypress Avenue Air Quality Analysis and Health Risk Assessment" Memorandum analyzing conformance with this mitigation measure was prepared by RCH Group and is attached to this staff report (Attachment 8.a). The analysis determines that the proposed Project would not result in any new impacts related to Air Quality, and therefore the Project is within the parameters analyzed within the DSASP EIR. A copy of the Final MMRP is also attached to this staff report (Attachment 8.c); staff will work with the applicant during project construction to ensure that all required mitigation measures are incorporated. 418 LINDEN AVENUE HIGH - DENSITY RESIDENTIAL DEVELOPMENT PROJECT Figure 3. 418 Linden Architecture The City previously approved entitlements (P10 -0055) on this property to construct a 60 -foot tall four -story mixed -use condominium project including 6,200 square feet of commercial space on the ground floor, 25 residential units on the upper floors, and below grade parking. The entitled project was not constructed due to financial constraints. The new 418 Linden Project is similar to the previously entitled project, but is currently proposed as a residential only development with no below -grade parking. The revised project scope consists of a 5 -story high - density residential building that will be approximately the same height, 60 feet, as the previously approved project; the additional story is created by having lower ceiling heights and less excess height on the top floor. The ground floor will consist primarily of support uses for the residential units, including the entrance lobby, a resident Staff Report Subject: Brookwood Group — Downtown Development Projects Date: December 9, 2015 Page: 12 of 16 lounge, fitness room and bicycle storage. One residential unit will also be on the ground floor, as will parking accessed from the rear circulation aisle. The upper four stories will consist of 37 residential uses, including a mix of four studio units, 18 one - bedroom units, 11 two - bedroom units and five three - bedroom units. The architectural style of the proposed project is Mediterranean /Spanish Colonial Revival, in keeping with the previously entitled project. The general sensibility is classical, with a symmetrical composition that allows for some variation to accommodate site features and functional considerations. The building design emphasizes the importance of the pedestrian experience, with a store -front appearance along the Linden Avenue frontage providing pedestrian access to the residential lobby at the corner of Linden and Lux Avenues, as well as the resident lounge, fitness room and 1 residential unit. The ground floor spaces are designed with flexibility to accommodate low- intensity commercial uses along Linden Avenue in the future if desired. A formal neighborhood meeting was held in April 2015 to introduce the project for which entitlements were being sought. The Planning Commission held a public hearing on May 21, 2015, to consider the design of the project and the requested entitlements, which it recommended to the City Council by a vote of 6 -0. DISCUSSION (A complete discussion of the 418 Linden Avenue project is contained in Attachment 5.a, the Planning Commission staff report from May 21, 2015) Figure 4. 418 Linden Ave Project Area The land use designation for the subject site is Downtown Transit Core ( "DTC "). This designation applies to the area that lies within a 1/4 mile or a five- minute walk of the reconfigured Caltrain Station and undercrossing. It is bounded by Lux Avenue on the north, which is one of the streets adjacent to the proposed project. Due to its proximity to the Caltrain Station, the DTC Staff Report Subject: Brookwood Group — Downtown Development Projects Date: December 9, 2015 Page: 13 of 16 is the area most suitable for the highest intensities of new development in the Downtown Area, which will help to support transit ridership and the pedestrian activity needed to support downtown businesses, add street life and improve safety. The DTC allows up to 100 dwelling units per acre; a minimum of 80 dwelling units per acre is required. A maximum of 120 dwelling units per acre would be allowed for development meeting specified criteria. Ground level retail uses are encouraged throughout the area, but are not required in this designation. Finally, the Housing Element of the General Plan, which is required by state law to identify how and where housing needs of the community will be met, identifies the subject site as a near -term housing site. Community Benefits The maximum density allowed by -right in the DTC district is 100 units per acre, while the maximum density inclusive of the incentive program is 120 units per acre. For the project site, this equates to 32 units and 38 units, respectively. To allow the increased density of 6 units, the applicant is proposing to provide public benefits as discussed in more detail on page 5 of this staff report. The Planning Commission supported the proposed Use Permit to allow increased density for the project because the proposed public benefits and requested development incentive are suitable to the site and to adjacent uses and structures, the proposed public benefits are consistent with the accepted list of public benefits, and reflect a fair balance of costs and benefits to the applicant and the City. Planning Commission Meeting The Planning Commission held a public hearing on the project on May 21, 2015. Nine members of the public spoke on the project, with concerns related to the parking issues in the surrounding neighborhood, the removal of a public parking lot, traffic impacts to Tamarack Lane, and the height of the building. Parking Impacts The project has been designed to meet the minimum parking requirements, including one parking space for each 1- bedroom unit, and 1.5 parking spaces for each 2 +- bedroom unit; the parking ratios are lower than for single - family zoning districts due to the proximity to the downtown and transit options. Removal of Public Parking Lot The lot has only been used as a public parking lot on a temporary basis after the demolition of the previous restaurant use on the site. The property was conveyed to the City in 2008 by Myers Development in lieu of construction 32 "work force" housing units as part of the Terrabay Development, and the original entitlements on this property were approved to comply with the conveyance. Height of Building The proposed building will be approximately the same height, 60 feet, as the previously approved project; the additional story is created by having lower ceiling heights and less excess Staff Report Subject: Brookwood Group — Downtown Development Projects Date: December 9, 2015 Page: 14 of 16 height on the top floor. The building is set back 20 feet from the eastern property line, closest to the existing single - family homes in the neighborhood. The roof terrace is also situated on the eastern side of the building to reduce the apparent height. Planning Commission Discussion The Planning Commission was generally supportive of the project, as it was in keeping with the previous entitlements and furthered the goals of the Downtown Station Area Specific Plan by creating more residential options in the Downtown area. The Commissioners had questions related to the use of the mechanical parking stackers, visitor parking, the proximity of the project to the Miller Avenue parking garage, and impacts to the surrounding neighborhood. The Commission suggested that the City consider allowing downtown residents to use the Miller Avenue Parking Garage in the evenings, and that parking wayfinding signage be incorporated into the downtown area. The Planning Commission recommended approval of the proposed project by a vote of 6 -0. (Again, this discussion is referred to in Attachments 5.a -b). General Plan Consistency The General Plan Land Use Designation for the site is Downtown Transit Core, considered the area most suitable for the highest intensities of new development in the Downtown Area, which will help to support transit ridership and the pedestrian activity needed to support downtown businesses, add street life and improve safety. The proposed project will conform to the General Plan Land Use Policies by reusing an underutilized site to construct a high - density residential development that will assist in the creation of a pedestrian - friendly mixed -use activity center along Linden Avenue and the downtown area. The Project, which was considered and recommended by the Planning Commission as consistent with the General Plan, also provides a well - articulated and visually engaging development that implements the goals of the Downtown Station Area Specific Plan. The project design is consistent with the City's Design Guidelines as it relates to building design, form and articulation. Housing Element Opportunity Sites The Housing Element is one of the seven State - mandated Elements of the General Plan. Unlike other elements, the Housing Element must be updated by deadlines set by the State; the Housing Element for the housing cycle of 2015 -2022 was certified by the State in April 2015. The Housing Element is the blueprint for future housing development in the city and includes goals, policies, and programs that direct residential decision - making. The Housing Element is required by state law to identify how and where the housing needs of each community will be met. For the upcoming housing cycle, the City of South San Francisco has a Regional Housing Needs Allocation ( "RHNA ") of 1,864 units. To show that the City has properly zoned land to meet the RHNA numbers, the City is required to identify adequate opportunity sites throughout the jurisdiction. The available site inventory focuses on sites with near -term development potential, typically where the site is currently vacant or highly underutilized. In the recently certified Housing Element, the Downtown area was identified as providing many potential opportunity sites, including the subject site, which was included as "Site 8 ". Assuming a density of 80 dwelling units per acre, less than then Staff Report Subject: Brookwood Group — Downtown Development Projects Date: December 9, 2015 Page: 15 of 16 maximum density allowed within the Downtown Transit Core district, the site was identified as being able to accommodate at least 24 units. The proposed project would exceed this projection by building at a higher density, and therefore would comply with the General Plan Housing Element. Environmental Review The City adopted the DSASP on February 11, 2015. The DSASP EIR was prepared as a Program EIR, pursuant to Section 15168 of the California Environmental Quality Act ( "CEQA "), and this document was certified by the City Council following public review and comment. The DSASP EIR found that significant and unavoidable impacts would result from future development anticipated in the DSASP in regards to Air Quality, Cultural Resources, Noise and Traffic /Transportation. In addition, the DSASP EIR included a Mitigation Monitoring and Reporting Program ( "MMRP ") that identified mitigation measures required of development projects within the DSASP Area to show that the project components are within the environmental parameters analyzed in the DSASP EIR. These include the following additional studies: Air Quality • MM4.2 -3 — A Health Risk Assessment (HRA) shall be prepared by a qualified air quality professional for development of a project that would introduce new sensitive receptors in the study area within the allowable siting distance. If a potentially significant health risk is identified, the HRA shall identify appropriate measures to reduce the potential health risk to below significant levels. A 418 Linden Avenue Air Quality Analysis and Health Risk Assessment Memorandum analyzing conformance with this mitigation measure was prepared by RCH Group and is attached to this staff report (Attachment 8.b). The analysis determines that the proposed Project would not result in any new impacts related to Air Quality, and therefore the Project is within the parameters analyzed within the DSASP EIR. A copy of the Final MMRP is also attached to this staff report (Attachment 8.c); staff will work with the applicant during project construction to ensure that all required mitigation measures are incorporated. CONCLUSION The proposed projects seek to transform two underutilized sites into a high - density developments that will serve as a gateway projects to Grand Ave and Linden Ave, bringing new residents into close proximity to the Caltrain station and assisting in the creation of a pedestrian - friendly activity center. In addition, the proposed developments conforms to the vision articulated in the General Plan, (including the Housing Element), and the Downtown Station Area Specific Plan District. Based on the information including in the public record, the Planning Commission recommends that the City Council and Successor Agency approve the DDA and respective project entitlements for the 255 Cypress Ave and 418 Linden Ave projects. Staff Report Subject: Brookwood Group — Downtown Development Projects Date: December 9, 2015 Page: 16 of 16 1 Alex i.,eweuiwoodl M,i ftrtrcll Direc;lor of E'couioiniC and /C t)" Nl,anaagt r 'orninu iiiiy Deve,1opmetit Attachments: 1. Disposition and Development Agreement a. City Council Draft Resolution for DDA p. 2 b. Successor Agency Draft Resolution for DDA p. 5 c. Disposition and Development Agreement P. 9 2. Draft Entitlements Resolution for 255 Cypress Ave p. 238 Exhibit A: Conditions of Approval p. 245 Exhibit B: 255 Cypress Avenue Project Plans, dated May 21, 2015 p. 251 3. Draft Entitlements Resolution for 418 Linden Ave p. 278 Exhibit A: Conditions of Approval p. 284 Exhibit B: 418 Linden Avenue Project Plans, dated May 21, 2015 p. 290 4. Planning Commission Documents for 255 Cypress Avenue a. Staff Report p. 316 b. Minutes — Meeting of May 21, 2015 p. 332 c. Planning Commission Resolution 2766 -2015 — Entitlements p. 335 5. Planning Commission Documents for 418 Linden Avenue a. Staff Report p. 342 b. Minutes — Meeting of May 21, 2015 p. 355 c. Planning Commission Resolution 2765 -2015 — Entitlements p. 359 6. Design Review Board Minutes — April 21, 2015 p. 365 7. Parking Demand Analysis for Proposed Projects at 255 Cypress and 418 p. 368 Linden, dated May 11, 2015 8. CEQA Documents a. 255 Cypress Avenue Air Quality Analysis and Health Risk Assessment, dated May 5, 2015 p. 378 b. 418 Linden Avenue Air Quality Analysis and Health Risk Assessment, dated May 5, 2015 p. 430 c. Final Mitigation Monitoring and Reporting Program from DSASP EIR p. 481 9. Power Point Presentation p. 500 Attachment 1 Disposition and Development Agreement a. City Council Draft Resolution for DDA b. Successor Agency Draft Resolution for DDA C. Disposition and Development Agreement Attachment La City Council Draft Resolution for DDA RESOLUTION NO. CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION APPROVING A DISPOSITION AND DEVELOPMENT AGREEMENT WITH BROOKWOOD EQUITIES, LLP FOR 418 LINDEN AVENUE WHEREAS, the City of South San Francisco ( "City ") is the owner of certain real property located in the City of South San Francisco, California, known as County Assessor's Parcel Number 012 -314 -010 ( "418 Linden Avenue "); and, WHEREAS, in September 2014, the City, the Successor Agency to the Redevelopment Agency of the City of South San Francisco ( "Agency ") and Brookwood Equities, LLP, a Delaware limited liability company ( "Developer") entered into an Exclusive Negotiation Rights Agreement ( "ENRA ") that established a mutual understanding among the City, the Agency and the Developer regarding the potential development of the 418 Linden Avenue property in conjunction with the potential development of the Agency property at 201, 207 and 217 -219 Grand Avenue ( "Successor Agency Property "); and, WHEREAS, Developer has proposed to construct a five -story development consisting of 38 residential apartments, of which 8 will be affordable to low- and moderate - income households, above ground -floor support space and 47 ground level parking spaces ( "Project ") on 418 Linden Avenue; and, WHEREAS, the City Council is interested in selling 418 Linden Avenue to Developer as contemplated in the ENRA, contingent upon approval of a Disposition and Development Agreement by the City Council, securing all funding for the Project, and obtaining all applicable land use entitlements from the City necessary to construct the Project on 418 Linden Avenue; and, WHEREAS, the City, the Agency, and the Developer now all wish to enter into a Disposition and Development Agreement between the City, the Agency and the Developer ( "Agreement ") that will supersede any points of agreement contained within the ENRA; and, WHEREAS, the City Council certified an Environmental Impact Report ( "EIR ") on January 28, 2015 (State Clearinghouse number 2013102001) in accordance with the provisions of the California Environmental Quality Act (Public Resources Code, §§ 21000, et seq., "CEQA ") and CEQA Guidelines, which analyzed the potential environmental impacts of the development of the Downtown Station Area Specific Plan; and, WHEREAS, the Project is within the Downtown Station Area Specific Plan and the Project would not result in any new significant environmental effects or a substantial 1 3 increase in the severity of any previously identified effects beyond those disclosed and analyzed in the Downtown Station Area Specific Plan EIR certified by City Council, NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of South San Francisco does hereby resolve as follows: (1) Finds and determines that the recitals are true and correct; (2) Approves the Agreement in substantially the same form attached hereto as Attachment l; (3) Authorizes the City Manager to enter into and execute the Agreement on behalf of the City Council in substantially the same form as attached hereto as Attachment l; to make any revisions, amendments, or modifications deemed necessary to carry out the intent of this Resolution and which do not materially or substantially increase the City's obligations thereunder. I hereby certify that the foregoing Resolution was regularly introduced and adopted by the City Council of the City of South San Francisco at a regular meeting held on the 9th day of December, 2015 by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: 2 4 City Clerk Attachment Lb Successor Agency Draft Resolution for DDA RESOLUTION NO. SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFRNIA A RESOLUTION APPROVING A DISPOSITION AND DEVELOPMENT AGREEMENT WITH BROOKWOOD EQUITIES, LLP FOR 201, 207, 217 -219 AND 227 GRAND AVENUE WHEREAS, the Successor Agency to the Redevelopment Agency of the City of South San Francisco ( "Agency ") is the owner of certain real property located in the City of South San Francisco, California, known as County Assessor's Parcel Numbers 012- 316 -110 (201 Grand Avenue), 012 - 316 -100 (207 Grand Avenue), 012 -316 -090 and 012- 316 -080 (217 -219 Grand Avenue) (collectively, the "Successor Agency Property "); and, WHEREAS, on June 29, 2011 the legislature of the State of California (the "State ") adopted Assembly Billy xl 26 ( "AB 26 "), which amended provisions of the Redevelopment Law; and, WHEREAS, pursuant to AB 26 and the California Supreme Court decision in California Redevelopment Association, et al. v. Ana Matosantos, et al., which upheld AB 26 (together with AB 1484, the "Dissolution Law "), the former Redevelopment Agency of the City of South San Francisco was dissolved on February 1, 2012; and, WHEREAS, pursuant to the Dissolution Law, the Successor Agency Property was transferred from the former Redevelopment Agency of the City of South San Francisco, to the Agency; and, WHEREAS, pursuant to the Dissolution Law, the Agency prepared a Long Range Property Management Plan ( "LRPMP "), which has been approved by the Oversight Board for the Successor Agency to the Redevelopment Agency of the City of South San Francisco ( "Oversight Board ") and California Department of Finance ( "DOF "); and, WHEREAS, the approved LRPMP identifies the Successor Agency Property within the permissible use category of development consistent with an approved redevelopment project plan; and, WHEREAS, in September 2014, the City of South San Francisco ( "City "), the Agency and Brookwood Equities, LLP, a Delaware limited liability company ( "Developer "), entered into an Exclusive Negotiating Rights Agreement ( "ENRA ") that established a mutual understanding among the City, the Agency and Developer regarding the potential development of the Successor Agency Property in conjunction with the potential development of the City -owned property at 418 Linden Avenue ( "418 Linden Property "); and, D WHEREAS, the ENRA was approved by the Oversight Board on October 21, 2014 and the DOF on December 5, 2014; and WHEREAS, Developer has proposed to construct a five -story mixed -use residential and commercial development, consisting of 46 residential apartments, of which 9 will be affordable to low- and moderate - income households, above approximately 5,500 square feet of ground -floor commercial space and 61 ground level parking spaces on the Successor Agency Property ( "Project "), which is consistent with both the LRPMP and the ENRA; and WHEREAS, the Successor Agency is interested in selling the Successor Agency Property to Developer, as contemplated in the LRPMP and ENRA, contingent upon approval of a Disposition and Development Agreement by the Successor Agency and the Oversight Board, obtaining approval by the City of a Disposition and Development Agreement for the 418 Linden Property, securing all funding for the Project, and obtaining all applicable land use entitlements from the City necessary to construct the Project on the Successor Agency Property; and, WHEREAS, the City, the Agency, and the Developer now all wish to enter into a Disposition and Development Agreement between the City, the Agency and the Developer ( "Agreement ") that will supersede any points of agreement contained within the ENRA; and, WHEREAS, the City Council certified an Environmental Impact Report ( "EIR ") on January 28, 2015 (State Clearinghouse number 2013102001) in accordance with the provisions of the California Environmental Quality Act (Public Resources Code, §§ 21000, et seq., "CEQA ") and CEQA Guidelines, which analyzed the potential environmental impacts of the development of the Downtown Station Area Specific Plan; and, WHEREAS, the Project is within the Downtown Station Area Specific Plan and the Project would not result in any new significant environmental effects or a substantial increase in the severity of any previously identified effects beyond those previously disclosed and analyzed in the Downtown Station Area Specific Plan EIR certified by City Council, NOW, THEREFORE, BE IT RESOLVED that the Board of the Successor Agency to the Redevelopment Agency of the City of South San Francisco does hereby resolve as follows: (1) Finds and determines that the recitals are true and correct; (2) Approves the Agreement in substantially the same form attached hereto as Attachment l; 2 7 (3) Subject to the approval by the Oversight Board of the Agreement as it pertains to the disposition of the Successor Agency Property, authorizes the Executive Director to enter into and execute the Agreement on behalf of the Successor Agency, in substantially the same form as attached hereto as Attachment l; to make any revisions, amendments, or modifications deemed necessary to carry out the intent of this Resolution and which do not materially or substantially increase the Agency's obligations thereunder. I hereby certify that the foregoing Resolution was regularly introduced and adopted by the Successor Agency of the City of South San Francisco Redevelopment Agency at a regular meeting held on the 9th day of December, 2015 by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: City Clerk Attachment Lc Disposition and Development Agreement Exhibit A -1 Legal Description of Linden Avenue Property Exhibit A -2 Legal Description of Grand - Cypress Avenue Property Exhibit B Form of Memorandum of DDA and Option Exhibit C -1 Form of City Purchase and Sale Agreement Exhibit C -2 Form of Agency Purchase and Sale Agreement Exhibit D -1 Form of City Note Exhibit D -2 Form of Agency Note Exhibit E -1 Form of City Deed of Trust Exhibit E -2 Form of Agency Deed of Trust Exhibit F -1 Form of Linden Regulatory Agreement Exhibit F -2 Form of Grand - Cypress Agency Regulatory Agreement Exhibit G Applicable Laws Exhibit H Preliminary Financing Plan Exhibit I Form of Cit Certificate of Completion Exhibit J Form of Agency Certificate of Completion 9 DISPOSITION AND DEVELOPMENT AGREEMENT by and between THE CITY OF SOUTH SAN FRANCISCO and THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO and BROOKWOOD EQUITIES LLC December, 2015 {s:/13RKWD/0001/AGR/01106309.DOCx 21 10 Exhibits A -1 Legal Description of Linden Avenue Property A -2 Legal Description of Grand - Cypress Avenue Property B Form of Memorandum of DDA and Option C -1 Form of City Purchase and Sale Agreement C -2 Form of Agency Purchase and Sale Agreement D -1 Form of City Note D -2 Form of Agency Note E -1 Form of City Deed of Trust E -2 Form of Agency Deed of Trust F -1 Form of Linden Regulatory Agreement F -2 Form of Grand - Cypress Agency Regulatory Agreement G Applicable Laws H Preliminary Financing Plan I Form of City Certificate of Completion J Form of Agency Certificate of Completion 2 11 THIS DISPOSITION AND DEVELOPMENT AGREEMENT (this "Agreement ") is made and entered into as of December , 2015 ( "Effective Date "), by and between the City of South San Francisco, a municipal corporation ( "City "), the Successor Agency to the Redevelopment Agency of the City of South San Francisco, a public agency ( "Agency ") and Brookwood Equities LLC, a Delaware limited liability company ( "Developer "). City, Agency and Developer are hereinafter collectively referred to as the "Parties." RECITALS A. City is the owner of the real property located in the City of South San Francisco at 418 Linden Avenue, known as San Mateo County Assessor's Parcel Nos. 012 - 314 -010 and more particularly described in Exhibit A -1 attached hereto (the "Linden Avenue Property "). B. Agency is the owner of the real property located in the City of South San Francisco at 201 -219 Grand Avenue, known as San Mateo County Assessor's Parcel Nos. 012- 316 -110, 012 - 316 -100, 012 -316 -090 and 012 -316 -080 and more particularly described in Exhibit A -2 attached hereto (the "Grand- Cypress Avenue Property "). The Grand - Cypress Avenue Property and the Linden Avenue Property are hereinafter collectively referred to as the "Property." C. Developer intends to create or has created two special purpose entities: Brookwood Cypress Venture LLC (`BCV ") for the Grand - Cypress Avenue Property and Brookwood Linden Venture LLC (`BLV ") for the Linden Avenue Property to serve as the ownership entities for the Project, defined below. For purposes of this Agreement and where the context warrants, a reference to the Developer shall be to BCV for the Cypress Avenue Property and a reference to the Developer shall be to BLV for the Linden Avenue Property once such entities have been formed and assumed the obligations of Developer for such Property. D. Developer intends to construct a 5 story high- density mixed -use building on the Grand - Cypress Avenue Property that will be approximately 60 feet tall. The ground floor will consist of approximately 5,500 square feet of commercial area fronting on Grand and Cypress Avenues and a leasing office and resident lounge (the "Grand- Cypress Commercial Project "). Parking will be accessed from 3rd Lane. The upper four stories will consist of 46 apartment units, including a mix of three studio units, 21 one - bedroom units and 22 two - bedroom units (the "Grand- Cypress Housing Project "). Developer will enter into an Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants (the "Grand- Cypress Regulatory Agreement ") with the City as Housing Successor to the former Redevelopment Agency of the City of South San Francisco (the "Former Agency ") that will require restriction of eight (8) housing units for Low - Income Eligible Households (as defined in the Grand - Cypress Regulatory Agreement) and one (1) housing unit for a Moderate Income Eligible Household (as defined in the Grand - Cypress Regulatory Agreement). The Grand - Cypress Housing Project and the Grand - Cypress Commercial Project are collectively referred to in this Agreement as the "Grand- Cypress Project." E. Developer intends to construct a 5 -story high - density residential building on the Linden Avenue Property that will be approximately 60 feet tall. The ground floor will consist primarily of support uses for the residential units, including the entrance lobby, a resident 12 lounge, fitness room and bicycle storage. One live -work unit (residential /commercial) will also be on the ground floor, as will parking accessed from the rear circulation aisle. The upper four stories will consist of 38 residential uses, including a mix of four studio units, 18 one - bedroom units, 11 two - bedroom units and five three - bedroom units (the "Linden Housing Project "). Developer will enter into an Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants (the "Linden Regulatory Agreement ") with the City that will require restriction of six (6) housing units for Low - Income Eligible Households (as defined in the Grand - Cypress Regulatory Agreement) and two (2) housing units for Moderate Income Eligible Households (as defined in the Grand - Cypress Regulatory Agreement). The Grand - Cypress Project and the Linden Housing Project are collectively referred to in this Agreement as the "Project." F. Subject to the terms and conditions set forth in this Agreement: (i) the City will enter into a purchase and sale agreement with Developer for the Linden Avenue Property, and the City will loan the purchase price for the Linden Avenue Property to Developer; (ii) the Agency will enter into a purchase and sale agreement with Developer for the Grand - Cypress Avenue Property, and the Agency will loan the purchase price for the Grand - Cypress to Developer; (iii) the City will provide Developer with a grant of $435,000 from City Affordable Housing In -Lieu Fee Funds for Project predevelopment activities on the Linden Avenue Project; (iv) the City will provide a $780,000 grant to Developer from Affordable Housing Bond Funds to partially finance development of the Project on the Linden Avenue Property; (v) the City will provide a $920,000 grant to Developer from Affordable Housing Bond Funds to partially finance development of the Project on the Grand - Cypress Avenue Property; and (vi) Developer will construct the Project. G. The Grand - Cypress Avenue Property is a former Redevelopment Agency property and is therefore subject to the State of California Redevelopment Dissolution Law (AB xl 26, as amended by AB 1484 and SB 107). City submitted a Long Range Property Management Plan dated November 19, 2013 ( "LRPMP "), and subsequently amended and resubmitted it on May 21, 2015, that proposes development of the Grand - Cypress Avenue Property. On October 2, 2015 the State of California Department of Finance ( "DOV) approved the LRPMP. H. The City Council, the governing board of the Successor Agency, and the Oversight Board have each determined that the disposition and development of the Property pursuant to this Agreement will be of benefit to the community and to the taxing entities that will share in the property taxes assessed against the Property. L The City Council, the governing board of the Successor Agency, and the Oversight Board have each approved the execution of this Agreement and the disposition of the Property as set forth in this Agreement, have followed all requisite procedures, and have adopted all requisite findings in connection with the foregoing. 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. 4 13 ARTICLE I DEFINITIONS 1.1. 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. 1.1.1 "Agency Deed of Trust" is defined in Section 3.2.2. 1.1.2 "Agency Documents" is defined in Section 2.3.4. 1.1.3 "Agency Note" is defined in Section 3.2.2. 1.1.4 "Bridging Contract Documents" or `BCD'S" are described in Section 4.16. 1.1.5 "Bridging Contracts" is defined in Section 3.3. 1.1.6 "Certificate of Completion" is defined in Section 4.14. 1.1.7 "City Deed of Trust" is defined in Section 3.2.1. 1.1.8 "City Documents" is defined in Section 2.3.4. 1.1.9 "City Notes" or "Notes" are defined in Section 3.2.1. 1.1.10 "Claims" is defined in Section 4.18. 1.1.11 "Conditions of Approval' is defined in Section 4.1. 1.1.12 "Construction Plans" is defined in Section 4.12. 1.1.13 "Deeds of Trust" means the Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing to be executed by Developer as Trustor for the benefit of City and Agency recorded against the Property to secure the repayment of the Notes, as referenced in Section 3.2. 1.1.14 "Environmental Laws" is defined in Section 9.1.2. 1.1.15 "Grand- Cypress Avenue Property" is defined in Recital B. 1.1.16 "Grand- Cypress Purchase and Sale Agreement" is defined in Section 3.3. 1.1.17 "Grand- Cypress Avenue Purchase Price" is defined in Section 3.2.2. 1.1.18 "Grand- Cypress Regulatory Agreement" is defined in Recital D. 5 14 1.1.19 "Hazardous Material" is defined in Section 9.1.1. 1. 1.20 "Indemnitees" is defined in Section 4.18. 1.1.21 "Linden Avenue Property" is defined in Recital B. 1. 1.22 "Linden Purchase and Sale Agreement" is defined in Section 3.2. 1.1.23 "Linden Avenue Purchase Price" is defined in Section 3.2.1. 1.1.24 "Linden Regulatory Agreement" is defined in Recital E. 1.1.25 "Notes" mean the City Note and the Agency Note as referenced in Section 3.2. 1.1.26 "Official Records" means the Official Records of San Mateo County. 1.1.27 "Owner's Minimum Requirements" or "OMR's" are defined in Section 4.10. 1.1.28 "Owner's Design Consultant" or "ODC" is defined in Section 4.10. 1.1.29 "Project" is defined in Recital C. 1.1.30 "Property" means collectively the Linden Avenue Property and the Cypress -Grand Avenue Property. 1.1.31 "Purchase and Sale Agreements" are defined in Sections 3.2 and 3.3. 1.1.32 "Regulatory Agreement" means collectively the Grand - Cypress Regulatory Agreement and the Linden Regulatory Agreement. 1.1.33 "Transfer" is defined in Section 8.2. ARTICLE II REPRESENTATIONS; EFFECTIVE DATE; CONDITIONS PRECEDENT TO SALE CLOSING 2.1. Developer's Representations. Developer represents and warrants to City and Agency as follows, and Developer covenants that until the expiration or earlier termination of this Agreement, upon learning of any fact or condition which would cause any of the warranties and representations in this Section 2.1 not to be true, Developer shall immediately give written notice of such fact or condition to City and Agency. Developer acknowledges that City and Agency shall rely upon Developer's representations made herein notwithstanding any investigation made by or on behalf of City or Agency. For purposes of this Agreement and where the context warrants, a reference to the Developer shall be to BCV for the Grand - Cypress Avenue Property and a reference to the Developer shall be to BLV for the Linden Avenue 6 15 Property once such entities have been formed and assumed the obligations of Developer for such Property. Upon execution of an assignment and assumption agreement between Developer, as assignor, and BCV, as assignee, in form and content acceptable to the Agency, Developer shall be released from all obligations under this DDA, the Purchase and Sale Agreement, and the Agency Documents. Upon execution of an assignment and assumption agreement between Developer, as assignor, and BLV, as assignee, in form and content acceptable to the City, Developer shall be released from all obligations under this DDA, the Purchase and Sale Agreement, and the City Documents. (a) Authority. Developer is a limited liability company and in good standing under the laws of the State of California and the state of its formation. Developer has the full right, power and authority to undertake all obligations of Developer as provided herein, and the execution, performance and delivery of this Agreement by Developer has been duly authorized by all requisite actions. The persons executing this Agreement on behalf of Developer have been duly authorized to do so. This Agreement and the other Agency Documents and City Documents constitute valid and binding obligations of Developer, enforceable in accordance with their respective terms. (b) No Conflict. Developer's execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which Developer is a party or by which it is bound. (c) No Litigation or Other Proceeding. No litigation or other proceeding (whether administrative or otherwise) is outstanding or has been threatened which would prevent, hinder or delay the ability of Developer to perform its obligations under this Agreement. (d) No Developer Bankrupts. Developer is not the subject of a bankruptcy or insolvency proceeding. 2.2. Effective Date. The obligations of Developer, City and Agency hereunder shall be effective as of the Effective Date which date is set forth in the preamble to this Agreement. 2.3. Conditions Precedent. City's obligation to sell the Linden Avenue Property to Developer, and Agency's obligation to sell the Grand - Cypress Avenue Property to Developer, is conditioned upon the satisfaction of all of the requirements set forth in each subsection of this Section 2.3, unless any such condition is waived by City acting in the discretion of its City Manager or by Agency acting in the discretion of its Executive Director, as applicable. Prior to conveyance of the Linden Avenue Property and the Grand - Cypress Avenue Property: 2.3.1 Due Authorization and Good Standing. Developer shall have delivered to Agency and City of each of the following: (i) certificate of good standing, certified by the Secretary of State indicating that Developer is properly organized and authorized to do business in the State of California, (ii) a certified resolution indicating that Developer has authorized the execution of the Agency Documents and the City Documents and the transactions contemplated thereby and that the persons executing the Agency 7 16 Documents and City Documents on behalf of Developer have been duly authorized to do so, (iii) certified copies of Developer's articles of organization /certificate of formation and operating agreement. 2.3.2 No Litigation. _ There shall be no litigation pending with respect to this Agreement or any City approval related to the Project, the outcome of which could materially interfere with the development of the Property as set forth herein. 2.3.3 Approvals. As to the Grand - Cypress Avenue Property, this Agreement shall have been approved by the Oversight Board and any other public agency whose approval is required. 2.3.4 Execution and Delivery of Documents. Developer shall have executed, acknowledged as applicable, and delivered to City all documents required in connection with the transactions contemplated hereby, including without limitation, the Linden Regulatory Agreement, the City Deed of Trust and the Memorandum. All of the foregoing documents, together with this Agreement and the City Grant Deed are hereinafter referred to collectively as the "City Documents." Developer shall have executed, acknowledged as applicable, and delivered to Agency all documents required in connection with the transactions contemplated hereby, including without limitation the Grand - Cypress Regulatory Agreement, the Agency Deed of Trust and the Memorandum. All of the foregoing documents, together with this Agreement and the Agency Grant Deed are hereinafter referred to collectively as the "Agency Documents." 2.3.5 Design Review. City shall have reviewed and approved the Site Development Plan and Project design, which City acknowledges has been approved. 2.3.6 Permits and Approvals; Cooperation. Developer shall have obtained all entitlements, permits, licenses and approvals required for the construction of the Project on the Property, including without limitation, building permits and use permits or shall provide evidence satisfactory to City and Agency that receipt of such permits and approvals is subject only to such conditions as Agency and City may reasonably approve. Agency and City staff shall work cooperatively with Developer to assist in coordinating the expeditious processing and consideration of all permits, entitlements and approvals necessary for construction of the Project on the Property as contemplated by this Agreement. 2.3.7 Payment of Fees. Developer shall have paid when due all customary and reasonable City fees and charges in connection with the processing of City permits and approvals, as set forth in Section 4.4 of this Agreement. 17 2.3.8 Bridging Contract Documents, Budget and Schedule. City shall have approved the Bridging Contract Documents and Owner's Minimum Requirements for the Project pursuant to Article IV, and Agency and City shall have approved the construction budget and schedule for the Project. 2.3.9 Financing. Developer shall have delivered to Agency and City evidence reasonably satisfactory to Agency and City that satisfies all of the following: (a) Within forty -five (45) days of the Effective Date of this Agreement, Developer shall provide a Letter of Intent and a term sheet that both demonstrate the availability of equity financing for the Project. (b) Within sixty (60) days from satisfaction of Section 2.3.9(a), Developer shall provide an executed joint venture agreement evidencing equity participation. (c) No later than forty five (45) days prior to property conveyance, Developer shall provide proof that Developer has secured binding commitments for all funding required for the Project in excess of the City and Agency financing, subject only to commercially reasonable conditions. 2.3.10 Insurance and Performance Bonds. Developer shall have provided evidence reasonably satisfactory to Agency and City that Developer has obtained insurance coverage meeting the requirements set forth in Article X_I and shall have provided to Agency and City performance bonds or other assurance of completion reasonably satisfactory to Agency and City pursuant to the requirements set forth in Section 4.20. 2.3.11 Memorandum. Developer, City and Agency shall execute and acknowledge a Memorandum of this Agreement ( "Memorandum ") substantially in the form attached hereto as Exhibit B, and Developer shall cause the Memorandum and Regulatory Agreement to be recorded in the Official Records of San Mateo County on the Closing Date. 2.3.12 Title. City shall have received assurance that the Regulatory Agreement and the Memorandum will be recorded subject only to: (a) the provisions and effects of the City Documents and Agency Documents, (b) any lien for current taxes and assessments or taxes and assessments accruing subsequent to recordation, and (c) the City Permitted Exceptions and Agency Permitted Exceptions as those terms are defined in the Regulatory Agreement. ARTICLE III SALE OF THE PROPERTY 3.1. Purchase Price 3. 1.1 Linden Avenue Property. The Purchase Price for the Linden Avenue Property shall be the appraised value of the Linden Avenue Property, which is $1,388,000 (the "Linden Purchase Price "). 3.1.2 Grand - Cypress Avenue Property. The Purchase Price for the Grand - Cypress Property shall be the appraised value of the Grand - Cypress Avenue Property, which is $2,020,000 (the "Grand- Cypress Purchase Price "). 3.2. Sale of Linden Avenue Property. Provided that all conditions precedent set forth in this Agreement have been satisfied or waived, City shall sell to Developer, and Developer shall purchase from City, the Linden Avenue Property in accordance with and subject to the terms, covenants and conditions of this Agreement and the Purchase and Sale Agreement attached hereto as Exhibit C (the "Linden Purchase and Sale Agreement "), which agreement is incorporated herein by reference. 3.2.1 Pursuant to Sections 3.2.2 and 3.2.3 below, City will provide a loan to Developer in principal amount of One Million Three Hundred Eighty - Eight Thousand Dollars ($1,388,000) (the "City Loan ") to finance the Linden Purchase Price. Developer shall execute a note (the "City Note ") to evidence the City Loan, and shall execute the Deed of Trust in favor of the City to provide security for the Loan. Nothing in this Agreement is intended to prohibit Developer from paying the Linden Purchase Price in immediately available funds or from securing financing for the purchase of the Property from another funding source. 3.2.2 City agrees to loan to Developer, and Developer agrees to borrow from and repay to City, the sum of One Million Three Hundred Eighty -Eight Thousand Dollars ($1,388,000), upon the terms and conditions set forth in this Agreement. 3.2.3 Interest shall accrue on the outstanding principal balance of the City Note at the rate of one percent (I%) simple interest per annum, commencing upon the first anniversary of the Certificate of Completion for the Linden Avenue Property. Interest shall be calculated on the basis of a year of 365 days, and charged for the actual number of days elapsed. 3.2.4 Commencing upon the first anniversary of the Certificate of Completion, for the Linden Avenue Property and on each anniversary thereafter, Developer shall make annual payments of Twenty -Seven Thousand Seven Hundred Fifty Dollars ($27,750). The entire outstanding principal balance 10 19 of the City Note, together with accrued interest and all other sums accrued hereunder shall be payable in full on the thirtieth (301') anniversary of the date of the City Note (the "Maturity Date "). Payments made under the City Note will be applied to principal amounts outstanding in accordance with the amortization schedule attached to the City Note. 3.2.5 All sums are due and payable under the City Note upon the sale or Transfer of the Linden Property, there is a conversion of the Linden Avenue Project to a condominium project, or there is a default under this Agreement, the City Note, or any other City Document. 3.2.6 The City Note shall be secured by a Deed of Trust on the Linden Avenue Property in the form attached hereto as Exhibit E -1 (the "City Deed of Trust "). The City Note and Deed of Trust shall be subordinated to the permanent and construction financing for the Project and the City shall execute any subordination agreement, if necessary, required by the Developer and the lender providing the permanent or construction financing for the Project. 3.3. Sale of Grand - Cypress Avenue Property. Provided that all conditions precedent set forth in this Agreement have been satisfied or waived, Agency shall sell to Developer, and Developer shall purchase from Agency the Grand - Cypress Avenue Property in accordance with and subject to the terms, covenants and conditions of this Agreement and the attached hereto as Exhibit C -1 (the "Grand- Cypress Purchase and Sale Agreement "), which agreement is incorporated herein by reference. 3.3.1 Pursuant to Sections 3.3.2 and 3.3.3 below, Agency will, provide a loan to Developer in the principal amount of Two Million Twenty Thousand Dollars ($2,020,000) (the "Agency Loan ") to finance the Grand - Cypress Purchase Price. Buyer shall execute a note (the "Agency Note ") to evidence the Agency Loan, and shall execute the Deed of Trust in favor of the Agency to provide security for the Loan. Nothing in this Agreement is intended to prohibit Developer from paying the Grand - Cypress Purchase Price in immediately available funds or from securing financing for the purchase of the Property from another funding source. 3.3.2 Agency agrees to loan to Developer, and Developer agrees to borrow from and repay to Agency, the sum of Two Million Twenty Thousand Dollars ($2,020,000), upon the terms and conditions set forth in this Agreement. 3.3.3 Interest shall accrue on the outstanding principal balance of the Agency Note at the rate of one percent (1%) simple interest per annum, commencing upon the first anniversary of the Certificate of Completion for the Grand - Cypress Property. Interest shall be calculated on the basis of a year of 365 days, and charged for the actual number of days elapsed. 11 20 3.3.4 Commencing upon the first anniversary of the Certificate of Completion, for the Grand - Cypress Avenue Property and on each anniversary thereafter, Developer shall make annual payments of Forty Thousand Dollars ($40,000). The entire outstanding principal balance of the Agency Note, together with accrued interest and all other sums accrued hereunder shall be payable in full on the thirtieth (301') anniversary of the date of the Agency Note (the "Maturity Date "). Payments made under the Agency Note will be applied to principal amounts outstanding in accordance with the amortization schedule attached to the Agency Note. 3.3.5 All sums are due and payable under the Agency Note upon the sale or Transfer of the Grand - Cypress Property, there is a conversion of the Grand - Cypress Avenue Project to a condominium project, or there is a default under this Agreement, the Agency Note, or any other Agency Document. 3.3.6 The Agency Note shall be secured by a Deed of Trust on the Grand - Cypress Avenue Property in the form attached hereto as Exhibit E -2 (the "Agency Deed of Trust "). The Agency Note and Agency Deed of Trust shall be subordinated to the permanent and construction financing for the Project and the Agency shall execute any subordination agreement, if necessary, required by the Developer and a lender providing the permanent or construction financing for the Project. The City Note and the Agency Note shall be referred to hereafter as the "Notes" and the City Deed of Trust and the Agency Deed of Trust shall be referred to as the "Deeds of Trust." 3.4. Closing Procedures. Within five (5) business days following Developer's execution of the DDA, Developer, City and Agency shall each deposit into escrow three (3) executed counterpart copies of the Purchase and Sale Agreement. The date for close of escrow for the purchase of the Property ( "Closing Date ") shall be no later than thirty (30) days after the Developer has received firm financing commitments for the financing and construction of the Project (provided Developer has finalized and is ready to enter into the final design and construction contracts for the Project) (the Bridging Contracts), unless the parties agree to an extension of such date. 3.5. Title Condition. Title to the Property shall be conveyed to Developer subject only to the title exceptions specifically approved by Developer, as provided in the Purchase and Sale Agreement. Notwithstanding anything to the contrary herein, City and Agency shall convey title free and clear of all monetary liens or encumbrances on their respective Property. 3.6. Effect of Dissolution of Agency. Upon dissolution of the Agency, the City will assume the Agency's obligations and rights under this Agreement, subject to any applicable compensation agreements. 12 21 ARTICLE IV DEVELOPMENT OF THE PROPERTY 4.1. The Project. Developer shall construct the Project 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 development of the Project, including without limitation, all mitigation measures imposed in connection with environmental review of the Project 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 "). 4.2. Affordable Housing. Developer covenants and agrees for itself, its successors and assigns that the Property will be subject to recorded covenants that will restrict use of the Property to development of a residential project that includes affordable housing, and 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, not less than twenty percent (20 %) of the residential units in the Project as a whole shall be rented at an affordable cost (as defined in the Regulatory Agreement) in accordance with the terms hereof and the South San Francisco Municipal Code, the Linden Regulatory Agreement or the Grand - Cypress Regulatory Agreement, as applicable, substantially in the forms attached hereto as Exhibits F -1 and F -2 (the "Regulatory Agreements ") concurrently with the execution of this Agreement, and which shall be recorded in the Official Records on the date that Developer acquires the Property. 4.3. No Condominium Conversion. Developer 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 unless Developer obtains the City's consent and enters into new regulatory agreements with the City for "for sale" housing units. City's prior written consent shall be required with respect to the sale or condominium conversion of the retail /commercial portion of the Project or any part thereof. Upon conversion of any portion of the Project to condominium or cooperative ownership, the City Note and the Agency Note will become immediately due and payable. 4.4. Commercial Project. Developer hereby agrees to abide by the following terms with respect to the Grand - Cypress Commercial Project: 4.4.1 Within 30 days of the Effective Date, Developer shall enter into an agreement with a qualified commercial broker to lease the commercial and retail space to be constructed in the Grand - Cypress Commercial Project. 4.4.2 Within the following 30 days following execution of the broker agreement, and every 30 days thereafter, Developer provide a retail leasing progress report that shows the tenants contacted, tenant contact information, and the results of such contact. 13 22 4.4.3 Developer shall provide executed letters of intent for the lease of 50% of the retail and commercial space within 180 days of the Effective Date and executed leases for 75% of the retail and commercial space within the following 120 days. 4.4.4 No more than 25% of gross lease area within the retail and commercial space may be leased to services industries, and not until at least 75% of the gross lease area has been leased to retail enterprises, unless otherwise approved by the City in its sole discretion. 4.5. Project Approvals. Developer acknowledges and agrees that execution of this Agreement by City and 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 Developer from the obligation to apply for and obtain all necessary entitlements, approvals, and permits for construction of the Project on the Property 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. Developer covenants that it shall: (i) obtain all necessary permits and approvals which may be required by Agency, City, or any other governmental agency having jurisdiction over 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. City staff shall work cooperatively with Developer to assist in coordinating the expeditious processing and consideration of all permits, entitlements and approvals necessary for construction of the Project. 4.6. Fees. Developer shall be solely responsible for, and shall promptly pay when due, all customary and usual fees and charges of City in connection with obtaining building permits and other approvals for the Project, including without limitation, those related to the processing and consideration of amendments, if any, to the current entitlements, any related approvals and permits, environmental review, architectural review, historic review, if any, and any subsequent approvals for the Project. Consistent with the terms of the Agreement, City shall have the right to impose only those development fees (the "Development Fees ") identified in Exhibit G, and limited to (i) those actually in effect at the time the Agreement is executed identified herein as Existing Fees, at the rates in effect at the time the Development Fee is due including any lawfully imposed adjustments and escalators set forth in the applicable resolutions and ordinances, which are identified in Exhibit G, and (ii) those other generally applicable Future Fees and exactions identified in Exhibit G, at a rate for each such fee or exaction no greater than the rate specified for such fee or exaction in Exhibit F including any lawfully imposed adjustments and escalators set forth in the applicable resolutions and ordinances. Development Fees shall be due upon issuance of building permits or certificates of occupancy for the Project in accordance with the ordinances or resolutions imposing such fees, or as otherwise stipulated in this Agreement. 14 23 4.7. Cost of Acquisition and Construction. Except as expressly set forth herein, Developer shall be solely responsible for all direct and indirect costs and expenses incurred in connection with the acquisition of the Property and construction of the Project, including but not limited to any relocation obligations, and none of such costs and expenses shall be the obligation of the Agency or the City. 4.7.1 Relocation Obligations. _ Upon the Effective Date of this Agreement, City may, upon receipt of documentation of eligible relocation expenses incurred by current tenants at the Grand - Cypress Avenue Property, advance the cost of relocation expenses to tenants displaced by the Grand - Cypress Avenue Project. Within thirty (30) days following receipt of a request for reimbursement from the City, Developer shall reimburse City for funds advanced. Notwithstanding the foregoing, Developer's maximum obligation under this section shall be $42,000. 4.8. Preliminary Financing g Plan. As set forth in the attached as Exhibit H, Developer has provided Agency and City with a financing plan for the Project ( "Preliminary Financing Plan ") which describes: (i) the estimated costs of Project development, including without limitation acquisition costs and hard and soft construction costs, (ii) an operating pro forma which describes projected revenue and expenses for the Project, and (iii) all present sources of funding for construction and permanent financing, and (iv) evidence that Developer has obtained preliminary commitments from equity investors and /or lending institutions, subject only to commercially reasonable conditions. By its execution of this Agreement, Agency and City hereby approve the Preliminary Financing Plan. Prior to conveyance of the Property under the Purchase and Sale Agreement, Developer shall provide Agency and City with a Final Financing Plan that complies with Section 2.3.9 and contains all elements of the approved Preliminary Financing Plan as well as evidence that all such funds have been firmly committed by Developer, equity investors or lending institutions, subject only to commercially reasonable conditions. 4.9. Development Schedule. Developer shall commence and complete construction of the Project and shall satisfy all other obligations of Developer 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, and the City's issuance of permits and approvals, Developer shall commence construction of both the Grand - Cypress Project and the Linden Housing Project not later than twelve (12) months following the Effective Date, and Developer shall diligently prosecute the construction work for both projects to completion in order to allow City to issue a final certificate of occupancy for both projects within sixteen (16) months following commencement of construction, but in no event later than thirty (30) months following the Effective Date. Subject only to force majeure, the availability of financing, and the City's issuance of permits and approvals, Developer's failure to commence or complete both the Grand - Cypress Project and the Linden Housing Project in accordance with the time periods specified in this Section 4.9 foregoing shall be an Event of Default hereunder. 4.10. Rights of Access. For the purpose of ensuring that the construction of the Project is completed in compliance with this Agreement, Developer shall permit representatives of the Agency and the City to enter upon the Property following 24 hours written notice (except in the 15 24 case of emergency in which case such notice as may be practical under the circumstances shall be provided). 4.11. Agency and City Disclaimer. Developer acknowledges that the Agency and City are under no obligation, and neither Agency nor City undertakes or assumes any responsibility or duty to Developer or to any third party, to in any manner review, supervise, or inspect the progress of construction or the operation of the Project. Developer and all third parties shall rely entirely upon its or their own supervision and inspection in determining the quality and suitability of the materials and work, the performance of architects, subcontractors, and material suppliers, and all other matters relating to the construction and operation of the Project. Any review or inspection undertaken by the Agency or the City is solely for the purpose of determining whether Developer is properly discharging its obligations under this Agreement, and shall not be relied upon by Developer or any third party as a warranty or representation by the Agency or the City as to the quality of the design or rehabilitation of the improvements or otherwise. 4.12. Bridging Contract Documents. Developer shall submit to City Staff detailed plans and other information (the "Bridging Contract Documents" or "BCDs ") that define the Project on the Property with sufficient detail for the purposes of the City and Developer. As used herein `BCDs" means the contract documents prepared by the Developer and by Gould Evans Architects and its sub - consultants who are retained by Developer as the Owner's Design Consultant (the "ODC ") and upon which Developer and Developer's contractors shall rely in entering into final design and construction contracts for the Projects. The BCDs shall sufficiently define the Project including the site development plans, architectural drawings, landscaping, exterior lighting and signage plans and initial specifications with definition of materials (referred to as the "Owner's Minimum Requirements" or "OMRs "), elevations, and building plans (including sufficient information regarding mechanical parking systems). The BCDs 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 BCDs are consistent with the requirements of this Agreement, approval of the BCDs by City shall be deemed approved thereof by Agency. 4.13. Change in Bridging Contract Documents. If Developer desires to make any material change in the approved BCDs, Developer 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 BCDs, 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 rejected by City within twenty -one (21) days, it may be deemed approved. If rejected, the previously approved BCDs shall continue to remain in full force and effect. Any change in the BCDs 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 BCDs. Approval of changes to the BCDs by City shall be deemed approval thereof by Agency. 16 25 4.14. Construction Plans. Developer shall cause its General Contractor to submit to City's Building Department detailed construction plans for construction of the Project on the Property (the "Construction Plans "). As used herein "Construction Plans" means the final construction documents that are in conformance with the BCDs and OMRs and upon which Developer and Developer's contractors shall rely in constructing the Project (including the landscaping, parking, and common areas) and shall include, without limitation, 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 Plans shall be based upon the scope of development set forth in the BCDs 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 BCDs, approval of the Construction Plans by City shall be deemed approval thereof by Agency. 4.15. Construction Pursuant to Plans. Developer and its contractor(s) shall construct the Project in accordance with the approved Construction Plans, the Conditions of Approval, and all other permits and approvals granted by the City and /or the Agency pertaining to the Project. Developer 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 Projects. 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. 4.16. Change in Construction Plans. If Developer desires to make any material change in the approved Construction Plans, Developer 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 City within twenty -one (21) days, it shall be deemed approved. 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. 4.17. Defects in Plans. Neither Agency nor City shall be responsible to Developer 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 Construction Plans. Developer shall indemnify, defend (with counsel 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. Developer'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 17 26 agreed that Agency and City do not, and shall not, waive any rights against Developer which they may have by reason of this indemnity and hold harmless agreement because of the acceptance by Agency or City, or Developer's deposit with Agency or City of any of the insurance policies described in this Agreement. Developer's indemnification obligations pursuant to this Section shall not extend to Claims arising due to the gross negligence or willful misconduct of the Indemnitees. 4.18. Certificate of Completion for Project. Promptly after completion of construction of the Project, issuance of a final Certificate of Occupancy by the City and the written request of Developer, the Agency and City will provide an instrument ( "Certificate of Completion ") so certifying, provided that at the time such certificate is requested all applicable work has been completed. The Certificate of Completion shall be conclusive evidence that Developer has satisfied its obligations regarding construction of the Project. The Certificate of Completion for the Linden Avenue Property shall be issued substantially in the form attached hereto as Exhibit I ( "City Certificate of Completion "), and at Developer's option, shall be recorded in the Official Records. The Certificate of Completion for the Grand - Cypress Avenue Property shall be issued substantially in the form attached hereto as Exhibit J ( "Agency Certificate of Completion "), and at Developer'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 Developer 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 Developer has satisfied any obligation that survives the expiration of this Agreement. 4.19. Equal Opportunity. 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 work on the Property, and Developer shall direct its contractors and subcontractors to refrain from discrimination on such basis. 4.20. Prevailing Wage Requirements. To the full extent required by all applicable state and federal laws, rules and regulations, Developer 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, Developer shall submit to City and Agency a plan for monitoring payment of prevailing wages and shall implement such plan at Developer's expense. To the fullest extent permitted by law, Developer shall indemnify, defend (with counsel approved by Agency and City) 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 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 18 27 claimants pursuant to Labor Code Sections 1726 and 1781), 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 Developer related to this Agreement with respect to the payment or requirement of payment of prevailing wages, 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 Developer which they may have by reason of this indemnity and hold harmless agreement because of the acceptance by Agency or City, or Developer's deposit with Agency or City of any of the insurance policies described in this Agreement. The provisions of this Section 4.20 shall survive the expiration or earlier termination of this Agreement and the issuance of a Certificate of Completion for the Project. Developer's indemnification obligations set forth in this Section shall not apply to Claims arising solely from the gross negligence or willful misconduct of the Indemnitees. 4.21. Compliance with Laws. Developer shall carry out and shall cause its contractors to carry out construction of the Project in conformity with all applicable federal, state and local laws, rules, ordinances and regulations, including without limitation, all applicable federal and state labor laws and standards, applicable provisions of the California Public Contracts Code (if any), 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.. Developer 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 Developer'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 Developer which they may have by reason of this indemnity and hold harmless agreement because of the acceptance by Agency or City, or Developer's deposit with Agency or City of any of the insurance policies described in this Agreement. Developer's indemnification obligations set forth in this Section shall not apply to Claims arising solely from the gross negligence or willful misconduct of the Indemnitees. Developer's defense and indemnification obligations set forth in this Section 4.21 shall survive the expiration or earlier termination of this Agreement and the issuance of a Certificate of Completion for the Project. 4.22. Liens and Stop Notices. Until the expiration of the term of the Regulatory Agreement, Developer shall not allow to be placed on the Property or any part thereof any lien or stop notice on account of materials supplied to or labor performed on behalf of Developer. If a claim of a lien or stop notice is given or recorded affecting the Project, Developer shall within 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 and City that the claim of lien or stop notice will be paid or discharged. 19 28 4.23. Right to Satisfy Liens on the Property. If Developer fails to satisfy or discharge any lien or stop notice on the Property pursuant to and within the time period set forth in Section 4.22 above, the Agency and City shall have the right, but not the obligation, to satisfy any such liens or stop notices at Developer's expense upon notice to Developer and all sums advanced by Agency and /or City for such purpose shall be part of the indebtedness secured by the Agency Deed of Trust and City Deed of Trust, as applicable. In such event Developer shall be liable for and shall immediately reimburse Agency and /or City for such paid lien or stop notice. Alternatively, the Agency and /or City may require Developer to immediately deposit with Agency and /or City the amount necessary to satisfy such lien or claim pending resolution thereof. The Agency and /or City may use such deposit to satisfy any claim or lien that is adversely determined against Developer. Developer shall file a valid notice of cessation or notice of completion upon cessation of construction work on the Property 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. The Agency and /or City may (but has no obligation to) record any notices of completion or cessation of labor, or any other notice that the Agency and /or City deems necessary or desirable to protect its interest in the Property. 4.24. Performance and Payment Bonds. Prior to commencement of construction work on the Project, Developer shall cause its general contractor to deliver to the City and Agency copies of payment bond(s) and performance bond(s) issued by a reputable insurance company licensed to do business in California, each in a 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, as applicable. In lieu of such performance and payment bonds, subject to City's and Agency's approval of the form and substance thereof, Developer may submit evidence satisfactory to the City and 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 and City required for any withdrawal, or a completion guaranty in a form and from a guarantor acceptable to Agency and City. Such evidence must be submitted to City and Agency in approvable form in sufficient time to allow for City's and Agency's review and approval prior to the scheduled construction start date. 4.25. Insurance Requirements. Developer shall maintain and shall cause its contractors to maintain all applicable insurance coverage specified in Article XI. ARTICLE V RESERVED ARTICLE VI CITY FINANCIAL ASSISTANCE 6.1. City Affordable Housing In -Lieu Grant. To assist in completion of the Project, City will provide Developer a grant in the amount of Four Hundred Thirty -Five Thousand 20 29 Dollars ($435,000) from City Affordable Housing In -Lieu Fees for Project predevelopment activities on the Linden Avenue Property (the "City AHIL, Grant ") upon the terms and conditions and for the purposes set forth in this Agreement. Provided that Developer has complied with all conditions precedent to disbursement of the City AHIL Grant set forth in Section 6.4, the proceeds of the City AHIL, Grant shall be disbursed in accordance with this Article VI as it relates to predevelopment activities. 6.2. City Affordable Housing Bond Fund Grants. As further described in this Section, and in order to assist in the construction of affordable units, the City is providing Developer a total of $1.7 Million dollars in grant funding ($780,000 for Linden Avenue and $920,000 for Grand - Cypress Avenue). Of this $1.7 million dollars in grant funding, the City has already provided Developer with $921,600 pursuant to the terms of the executed Exclusive Negotiation Rights Agreement ( "ENRA ") for initial predevelopment expenses ($387,000 for Linden and $534,600 for Cypress). The remaining $778,400 in grant funding will be provided following execution of this Agreement in order to assist with the completion of predevelopment activities. 6.2.1 Linden Avenue Grant. Agency has provided or will provide a grant to Developer in the amount of Seven Hundred Eighty Thousand Dollars ($780,000) from Affordable Housing Bond Funds for construction of the affordable units on the Linden Avenue Property (the "Linden Avenue Grant") upon the terms and conditions and for the purposes set forth in this Agreement. 6.2.2 Grand - Cypress Avenue Grant. City will provide a grant to Developer in the amount of Nine Hundred Twenty Thousand Dollars ($920,000) from Affordable Housing Bond Funds for construction of the affordable units on the Grand - Cypress Avenue Property (the "Grand- Cypress Avenue Grant") upon the terms and conditions and for the purposes set forth in this Agreement. The Linden Avenue Grant and Grand - Cypress Avenue Grant are hereinafter collectively referred to as the "Grants." 6.2.3 Disbursement of Grant Proceeds. Provided that Developer has complied with all conditions precedent to disbursement of the Grants set forth in Section 6.3, the proceeds of the Grand - Cypress Avenue Grant, the Linden Avenue Grant and the City AHIL Grant (collectively, "Grant Proceeds ") shall be disbursed in accordance with this Section 6.2.3. Without limiting the generality of the foregoing, subject to Section 4.9, it is expressly understood by the Parties that City's obligation to fund the Grants is contingent upon Developer's provision to City of evidence reasonably satisfactory to City that Developer has obtained preliminary commitments from equity investors and /or lending institutions for the financing and construction of the Project (and provided Developer has finalized and is ready to enter into the construction contracts for the Project). The Parties agree the City shall disburse the Grant Proceeds only for, and to the extent necessary for, the purposes set forth in Section 6.3. 21 30 City shall have the right to terminate this Agreement, and shall have no further obligation to fund the Grants, if within twelve (12) months following the Effective Date, Developer does not concurrently obtain additional funding in an aggregate amount which is, in City's reasonable determination, sufficient to fully fund and construct the Project. 6.3. Conditions to Disbursement of Grants. City's obligation to further fund the City Grants and disburse the Grant Proceeds is conditioned upon the satisfaction of all of the conditions set forth in Section 2.3 (to the extent such conditions are applicable and required to be satisfied by the date of such request) and all of the following conditions: 6.3.1 For City Grant Proceeds to be used for predevelopment activities: In continuation of the Phase 1 Schematic Design /Entitlements and Phase 2 Bridging Contract Documents per ENRA and this Agreement, City shall disburse so much of the proceeds as requested within fifteen (15) days of City's receipt of a written requisition from Developer specifying the amount and use of the requested funds, accompanied by copies of third - party invoices, evidence of Developer's payment for services rendered in connection with the Project, and such other documentation as City shall reasonably require, including without limitation assignment agreements in form acceptable to City providing City with the right to rely upon and use the plans, studies and other work product paid for with the City Grant Proceeds. 6.3.2 For Grant Proceeds to be used for construction, if any funds remain from the predevelopment activities: (a) Developer's delivery to City of evidence reasonably satisfactory to City that Developer 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 City shall reasonably approve; (b) City shall have approved the final plans and specifications for the Project; (c) Developer's construction financing for the Project shall have closed or shall close concurrently with City's disbursement of funds for construction, and Developer shall have delivered to City evidence reasonably satisfactory to City that Developer has secured binding commitments, subject only to commercially reasonable conditions, for all Project construction and permanent financing, (d) Developer's delivery to City and City approval of all of the following: (1) Project construction and operating budgets (2) performance bonds or other assurance of completion reasonably acceptable to City pursuant to the requirements set forth in Section 4.24; (3) construction schedule; (4) evidence of insurance coverage required pursuant to Section 11.2; (5) copies of such other documents related to the development and financing of the Project as City may reasonably request, and (6) Developer's delivery to City of evidence reasonably satisfactory to City that there are no mechanics' liens or stop notices related to the Property or the Project, and Developer's provision to City of full waivers or releases of lien clams if required by City. 22 31 6.3.3 In addition to the above conditions, the following conditions apply for Grant Proceeds to be used for construction: (a) The conveyance of the Linden Avenue Property and Grand - Cypress Avenue Property to Developer. (b) Recordation of the Memorandum and the Regulatory Agreement in the Official Records. (c) Developer's delivery to City of evidence reasonable satisfactory to City that there are no mechanics' liens or stop notices related to the Property or the Project, and Developer's provision to City of full waivers or releases of lien clams if required by City. (d) Developer's delivery to the City of evidence of property and liability insurance coverage in accordance with the requirements set forth herein. (e) No material adverse change as determined by City in its reasonable judgment shall have occurred in the condition of the Property or the Project or in the financial or other condition of Developer since the Effective Date of this Agreement. 6.4. No Obligation to Disburse Proceeds Upon Default. Notwithstanding any other provision of this Agreement, the City shall have no obligation to disburse or authorize the disbursement of any portion of the Grant Proceeds following: (a) the failure of any of Developer's representations and warranties made in this Agreement or in connection with the Grants to be true and correct in all material respects; (b) the termination of this Agreement by mutual agreement of the Parties; (c) the occurrence of an Event of Default under any City Document which remains uncured beyond any applicable cure period after notice by the City, 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 City Document. ARTICLE VII USE OF THE PROPERTY 7.1. Use. Developer covenants and agrees for itself and its successors and assigns that the Property shall be used for the development and operation of a mixed -use, multi - family residential rental project in accordance with the terms and conditions of this Agreement and the Regulatory Agreement. 7.2. Maintenance. Developer shall at its own expense, maintain the Property, including the 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 23 32 state, federal, and local laws, ordinances, codes, and regulations. Without limiting the foregoing, Developer agrees to maintain the Property (including without limitation, the 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. Developer shall prevent and /or rectify any physical deterioration of the Property except for ordinary wear and tear and shall make all repairs, renewals and replacements necessary to keep the Property and the improvements located thereon in good condition and repair. 7.3. Taxes and Assessments. Developer shall pay all real and personal property taxes, possessory interest taxes, assessments and charges and all franchise, income, payroll, withholding, sales, and other taxes assessed against the Property and payable by Developer, at such times and in such manner as to prevent any penalty from accruing, or any lien or charge from attaching to the Property; provided, however, that Developer shall have the right to contest in good faith, any such taxes, assessments, or charges. In the event the Developer exercises its right to contest any tax, assessment, or charge, the Developer, on final determination of the proceeding or contest, shall immediately pay or discharge any decision or judgment rendered against it, together with all costs, charges and interest. 7.4. Obligation to Refrain from Discrimination. Developer shall not restrict the rental, sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, or any portion thereof, on the basis of race, color, religion, creed, sex, sexual orientation, disability, marital status, ancestry, or national origin of any person. Developer covenants for itself and all persons claiming under or through it, and this Agreement is made and accepted upon and subject to the condition that there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926. 1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property or part thereof, nor shall Developer or any person claiming under or through Developer establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in, of, or for the Property or part thereof. Developer shall include such provision in all deeds, leases, contracts and other instruments executed by Developer, and shall enforce the same diligently and in good faith. All deeds, leases, sub - leases or contracts made or entered into by Developer, its successors or assigns, as to any portion of the Property or the improvements located thereon 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 Sections 12926, 12926. 1, subdivision (m) and paragraph (1) of 24 33 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 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, 5 1. 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 or subleases, 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, 5 1. 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 25 34 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." ARTICLE VIII LIMITATIONS ON CHANGE IN OWNERSHIP, MANAGEMENT AND CONTROL OF DEVELOPER; AGENCY OPTION 8.1. Change Pursuant to this Agreement. Developer and its principals have represented that they possess the necessary expertise, skill and ability to carry out the construction of the Project pursuant to this Agreement. The qualifications, experience, and expertise of Developer and its principals and the financial capacity of Developer's financial partners or equity investors are of particular concern to the City and Agency. It is because of these qualifications, experience, financial capacity and expertise that the City and Agency have entered into this Agreement with Developer. No voluntary or involuntary successor, assignee or transferee of Developer shall acquire any rights or powers under this Agreement, except as expressly provided herein. 8.2. Prohibition on Transfer. Prior to expiration of the term of the Regulatory Agreement, except for Permitted Transfers to Permitted Affiliates, defined herein, Developer shall not, except as expressly permitted by this Agreement, directly or indirectly, voluntarily, involuntarily or by operation of law make or attempt any total or partial sale, transfer, conveyance, assignment or lease (collectively, "Transfer ") of the whole or any part of the Property or this Agreement, without the prior written approval of Agency and City, which approval shall not be unreasonably withheld. Any such attempt to assign this Agreement without the Agency's or City's consent shall be null and void and shall confer no rights or privileges upon the purported assignee. In addition to the foregoing, prior to expiration of the term of the Regulatory Agreement, except as expressly permitted by this Agreement, Developer shall not undergo any significant change of ownership without the prior written approval of Agency and City. For purposes of this Agreement, a "significant change of ownership" shall mean a transfer of the beneficial interest of more than forty percent (40 %) in aggregate of the present ownership and /or control of Developer, taking all transfers into account on a cumulative basis; provided however, neither the admission of an investor limited partner, member or other equity partner, nor the transfer by such investor to subsequent limited partners, members or other equity partners shall be restricted by this provision. 8.3. Permitted Transfers. Notwithstanding any contrary provision hereof, the prohibitions set forth in this Article shall not be deemed to prevent the following ( "Permitted Transfers "): (i) the granting of temporary easements or permits to facilitate development of the Property; (ii) the dedication of any property required pursuant to this Agreement; or (iii) a Transfer to BCV, BLV or other entity which is under the direct control of Developer so long as 26 35 Developer is the managing member of such entity and maintains at least a five percent (5)% equity interest in each such entity ( "Permitted Affiliate "). 8.4. Requirements for Proposed Transfers. The Agency and City may, in the exercise of their reasonable 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 8.4 shall not apply to Transfers described in clauses (i) through (iii) of Section 8.3): (a) The proposed transferee demonstrates to the Agency's and City's satisfaction that it has the qualifications, experience and financial resources necessary and adequate as may be reasonably determined by the Agency and City to competently complete the Project and to otherwise fulfill the obligations undertaken by the Developer under this Agreement. (b) The Developer and the proposed transferee shall submit for Agency and City review and approval all instruments and other legal documents proposed to effect any Transfer of this Agreement, the Property or interest therein together with such documentation of the proposed transferee's qualifications and development capacity as the Agency and City may reasonably request. (c) The proposed transferee shall expressly assume all of the rights and obligations of the Developer under this Agreement, the City Documents and the Agency Documents arising after the effective date of the Transfer and all obligations of Developer arising prior to the effective date of the Transfer (unless Developer expressly remains responsible for such obligations) and shall agree to be subject to and assume all of Developer's obligations pursuant to the Conditions of Approval and all other conditions, and restrictions set forth in this Agreement. (d) The Transfer shall be effectuated pursuant to a written instrument satisfactory to the Agency and City in form recordable in the Official Records. Consent to any proposed Transfer may be given by the Agency's Chair unless the Chair, in his or her discretion, refers the matter of approval to the Agency's governing board. Consent to any proposed Transfer may be given by the City's City Manager unless the City Manager, in his or her discretion, refers the matter of approval to the City's governing board. If a proposed Transfer has not been approved by Agency or City in writing within thirty (30) days following Agency's and City's receipt of written request by Developer, it shall be deemed rejected, except for the transfer to BCV and BLV, in which case such transfer will be deemed accepted. 8.5. Effect of Transfer without A gency or City Consent. 8.5.1 In the absence of specific written agreement by the Agency and City, no Transfer by Developer shall be deemed to relieve the Developer or any other party from any obligation under this Agreement. 8.5.2 Without limiting any other remedy Agency and City may have under this Agreement, or under law or equity, except for Permitted Transfers and as 27 36 otherwise provided in this Agreement, it shall be an Event of Default hereunder entitling Agency and City to terminate this Agreement if without the prior written approval of the Agency and City, Developer assigns or Transfers this Agreement or the Property prior to expiration of the term of the Regulatory Agreement. This Section 8.5.2 shall not apply to Permitted Transfers. 8.5.3 If, in violation of this Agreement, the Developer Transfers all or any part of the Linden Avenue Property or the improvements thereon, the City shall be entitled to receive from Developer the amount by which the consideration payable for such Transfer exceeds the sum of (a) Linden Avenue Purchase Price, and (b) the costs incurred by Developer in connection with the improvement and development of the Linden Avenue Property, including carrying charges, interest, fees, taxes, assessments and escrow fees, less any amount funded by the City pursuant to the City Grants. Such excess consideration shall belong to and be paid to the City by the Developer and until so paid, the City shall have a lien on the Linden Avenue Property for such amount. 8.5.4 If, in violation of this Agreement, the Developer Transfers all or any part of the Grand - Cypress Avenue Property or the improvements thereon, the Agency shall be entitled to receive from Developer the amount by which the consideration payable for such Transfer exceeds the sum of (a) the Grand - Cypress Avenue Purchase Price, and (b) the costs incurred by Developer in connection with the improvement and development of the Grand - Cypress Avenue Property, including carrying charges, interest, fees, taxes, assessments and escrow fees. Such excess consideration shall belong to and be paid to the Agency by the Developer and until so paid, the Agency shall have a lien on the Grand - Cypress Avenue Property for such amount. 8.6. Recovery of Agency /City Costs. Developer shall reimburse Agency and /or City for all Agency and /or City 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 and /or City's delivery to Developer of an invoice detailing such costs. ARTICLE IX CONDITION OF THE SITE; ENVIRONMENTAL MATTERS 9.1. Definitions. 9.1.1 "Hazardous Material" means any chemical, compound, material, mixture, or substance that is now or may in the future be defined or listed in, or otherwise classified pursuant to any Environmental Laws (defined 28 37 below) as a "hazardous substance ", "hazardous material ", "hazardous waste ", "extremely hazardous waste ", infectious waste ", toxic substance ", toxic pollutant ", or any other formulation intended to define, list or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, or toxicity. The term "hazardous material" shall also include asbestos or asbestos - containing materials, radon, chrome and /or chromium, polychlorinated biphenyls, petroleum, petroleum products or by- products, petroleum components, oil, mineral spirits, natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable as fuel, perchlorate, and methytertbutyl ether, whether or not defined as a hazardous waste or hazardous substance in the Environmental Laws. 9.1.2 "Environmental Laws" means any and all federal, state and local statutes, ordinances, orders, rules, regulations, guidance documents, judgments, governmental authorizations or directives, or any other requirements of governmental authorities, as may presently exist, or as may be amended or supplemented, or hereafter enacted, relating to the presence, release, generation, use, handling, treatment, storage, transportation or disposal of Hazardous Materials, or the protection of the environment or human, plant or animal health, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C. § 9601), the Hazardous Materials Transportation Act (49 U.S.C. § 1801 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. § 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), the Oil Pollution Act (33 U.S.C. § 2701 et seq.), the Emergency Planning and Community Right -to -Know Act (42 U.S.C. § 11001 et seq.), the Porter - Cologne Water Quality Control Act (Cal. Water Code § 13000 et seq.), the Toxic Mold Protection Act (Cal. Health & Safety Code § 26100, et seq.), the Safe Drinking Water and Toxic Enforcement Act of 1986 (Cal. Health & Safety Code § 25249.5 et seq.), the Hazardous Waste Control Act (Cal. Health & Safety Code § 25100 et seq.), the Hazardous Materials Release Response Plans & Inventory Act (Cal. Health & Safety Code § 25500 et seq.), and the Carpenter - Presley- Tanner Hazardous Substances Account Act (Cal. Health and Safety Code, Section 25300 et seq.). 9.2. Reserved. 9.3. Property Sold, "AS IS ". Developer specifically acknowledges that the Agency and City are selling the Property on an "AS IS ", "WHERE IS" and "WITH ALL FAULTS" basis and that, subject to Seller's representations hereunder and in the Purchase and Sale Agreement and any obligations arising under such agreements or applicable law, Developer is not relying on any representations or warranties of any kind whatsoever, express or implied, from Agency, City, or their employees, board members, agents, or brokers as to any matters concerning the 29 38 Property. The Agency and City make no representations or warranties as to any matters concerning the Property, including without limitation: (i) the quality, nature, adequacy and physical condition of the Property, (ii) the quality, nature, adequacy, and physical condition of soils, geology and any groundwater, (iii) the existence, quality, nature, adequacy and physical condition of utilities serving the Property, (iv) the development potential of the Property, and the Property's use, habitability, merchantability, or fitness, suitability, value or adequacy of the property for any particular purpose, (v) the zoning or other legal status of the Property or any other public or private restrictions on use of the Property, (vi) the compliance of the Property or its operation with any Environmental Laws, covenants, conditions and restrictions of any governmental or quasi - governmental entity or of any other person or entity, (vii) the presence or removal of Hazardous Materials, substances or wastes on, under or about the Property or the adjoining or neighboring property; (viii) the quality of any labor and materials used in any improvements on the Property, (ix) the condition of title to the Property, (x) the leases, service contracts, or other agreements affecting the Property, or (xi) the economics of the operation of the Property. 9.4. Developer to Rely on Own Experts. Developer understands that notwithstanding the delivery by Agency or City to Developer of any materials, including, without limitation, third party reports, Developer will rely entirely on Developer's own experts and consultants and its own independent investigation in proceeding with the acquisition of the Property. 9.5. Right of Entry. Prior to commencement of construction, Developer and Developer's authorized representatives may enter upon and conduct further reviews and assessments of the physical and environmental condition of the Property and the condition of the existing improvements. Agency and /or City may require Developer to execute a right of entry agreement satisfactory to Agency and /or City prior to entry onto the Property for such purpose and shall require Developer to provide proof of liability insurance acceptable to Agency and /or City. Developer's inspection, examination, survey and review of the Property shall be at Developer's sole expense. Developer shall provide Agency and City with copies of all reports and test results promptly following completion of such reports and testing. Developer hereby agrees to notify the Agency and City twenty -four (24) hours in advance of its intention to enter the Property and will provide workplans, drawings, and descriptions of any intrusive sampling it intends to do. Developer must keep the Property in a safe condition during its entry. Developer shall repair, restore and return the Property to its condition immediately preceding Developer's entry thereon at Developer's sole expense Developer will not permit any mechanics liens, stop notices or other liens or encumbrances to be placed against the Property prior to Close of Escrow. Without limiting any other indemnity provisions set forth in this Agreement, to the fullest extent permitted by law, Developer shall indemnify, defend (with counsel approved by Agency and City) and hold the Indemnitees harmless from and against all Claims resulting from or arising in connection with entry upon the Property by Developer or Developer's agents, employees, consultants, contractors or subcontractors pursuant to this Section 9.5. Developer's indemnification obligations set forth in this Section 9.5 shall survive the termination of this Agreement. 9.6. Release by Developer. Subject to Sellers' representations in this Agreement and in the Purchase and Sale Agreement and any obligations arising under such Agreements or applicable law, Developer WAIVES, RELEASES, REMISES, ACQUITS AND FOREVER 30 39 DISCHARGES the Agency, City, their officers, board members, employees, agents, consultants and contractors, and any other person acting on behalf of the Agency or City, from any and all Claims, direct or indirect, known or unknown, foreseen or unforeseen, which Developer now has or which may arise in the future on account of or in any way arising out of or in connection with the physical condition of the Property, the presence of Hazardous Materials in, on, under or about the Property, or any law or regulation applicable thereto including, without limiting the generality of the foregoing, all Environmental Laws. DEVELOPER ACKNOWLEDGES THAT DEVELOPER IS FAMILIAR WITH SECTION 1542 OF THE CALIFORNIA CIVIL CODE, WHICH PROVIDES AS FOLLOWS: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. BY INITIALING BELOW, DEVELOPER EXPRESSLY WAIVES THE BENEFITS OF SECTION 1542 OF THE CALIFORNIA CIVIL CODE WITH RESPECT TO THE FOREGOING RELEASE: Developer's initials: 9.7. Developer's Obligations. Developer hereby covenants and agrees that (1) Developer shall not knowingly permit the Property, the Project 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 Property or Project with the exception of cleaning supplies and other materials customarily used in construction, rehabilitation, use or maintenance of residential and commercial properties similar in nature to the Property and used, stored and disposed of in compliance with Environmental Laws. (2) Developer shall keep and maintain the Property, the Project 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 Environmental Laws. (3) Upon receiving actual knowledge of the same, Developer shall immediately advise City and Agency in writing of: (i) any and all enforcement, cleanup, removal or other governmental or regulatory actions instituted, completed or threatened against the Developer, or the Property pursuant to any applicable Environmental Laws; (ii) any and all claims made or threatened by any third party against the Developer or the Property relating to damage, contribution, cost recovery, compensation, loss or injury resulting from any Hazardous Materials; (iii) the presence or release of any Hazardous Materials in, on, under, about or from the Property; or (iv) Developer's discovery of any occurrence or condition 31 40 on any real property adjoining or in the vicinity of the Project classified as "Border Zone Property" under the provisions of California Health and Safety Code, Sections 25220 et seq., or any regulation adopted in connection therewith, that may in any way affect the Property pursuant to any Environmental Laws or cause it or any part thereof to be designated as Border Zone Property. The matters set forth in the foregoing clauses (i) through (iv) are hereinafter referred to as "Hazardous Materials Claims." The Agency and City shall have the right to join and participate in, as a party if it so elects, any legal proceedings or actions initiated in connection with any Hazardous Materials Claim. (4) Without the Agency's and /or City's prior written consent, which shall not be unreasonably withheld or delayed, Developer shall not take any remedial action in response to the presence of any Hazardous Materials in, on, under, or about the Property (other than in emergency situations or as required by governmental agencies having jurisdiction in which case the Agency agrees to provide its consent), nor enter into any settlement agreement, consent decree, or other compromise in respect to any Hazardous Materials Claim. ARTICLE X DEFAULTS, REMEDIES AND TERMINATION 10.1. Event of Developer Default. The following events shall constitute an event of default on the part of Developer ( "Event of Developer Default "): (a) Developer fails to commence or complete construction of the Project within the times set forth in Section 4.9, or subject to force majeure, abandons or suspends construction of the Project prior to completion for a period of sixty (60) days or more; (b) Developer fails to comply with the financing requirements as set forth in Section 2.3.9 of this Agreement. Notwithstanding any other provision, there shall be no cure period for this Event of Developer Default. (c) Developer fails to pay the principal and interest (if any) payable to the City or Agency under any Note and such failure continues for ten (10) days after Agency and /or City, as applicable, notifies Developer thereof in writing; (d) A Transfer occurs, either voluntarily or involuntarily, in violation of Article VIII; (e) Developer fails to maintain insurance as required pursuant to this Agreement, and Developer fails to cure such default within ten (10) days; (f) Subject to Developer's right to contest the following charges pursuant to Section 7.3, if Developer fails to pay prior to delinquency taxes or assessments due on Grand - Cypress Avenue Property, or the Linden Avenue Property, as applicable, or fails to pay when due any other charge that may result in a lien on such Property, and Developer fails to 32 41 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; (g) A default arises under any loan secured by a mortgage, deed of trust or other security instrument recorded against the Grand - Cypress Avenue Property or the Linden Avenue Property, as applicable, 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; (h) 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 Developer's request for the City Grants 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; (i) If, pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (`Bankruptcy Law "), Developer or any managing member thereof (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Developer or any managing member thereof in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Developer or any managing member thereof, (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due; 0) A court of competent jurisdiction shall have made or entered any decree or order (1) adjudging the Developer to be bankrupt or insolvent, (2) approving as properly filed a petition seeking reorganization of the Developer or seeking any arrangement for Developer under bankruptcy law or any other applicable debtor's relief law or statute of the United States or any state or other jurisdiction, (3) appointing a receiver, trustee, liquidator, or assignee of the Developer in bankruptcy or insolvency or for any of its properties, or (4) directing the winding up or liquidation of the Developer; (k) Developer shall have assigned its assets for the benefit of its creditors (other than pursuant to a mortgage loan) or suffered a sequestration or attachment of or execution on any substantial part of its property, unless the property so assigned, sequestered, attached or executed upon shall have been returned or released within sixty (60) days after such event (unless a lesser time period is permitted for cure under any other mortgage on the Property, in which event such lesser time period shall apply under this subsection as well) or prior to any sooner sale pursuant to such sequestration, attachment, or execution; (1) The Developer shall have voluntarily suspended its business or Developer shall have been dissolved or terminated; (m) An event of default arises under any Agency Document or City Document, as applicable, and remains uncured beyond any applicable cure period after notice to Developer; or 33 42 (n) Developer defaults in the performance of any term, provision, covenant or agreement contained in this Agreement other than an obligation enumerated in this Section 10.1 and unless a shorter cure period is specified for such default, the default continues for ten (10) days in the event of a monetary default or thirty (3 0) days in the event of a nonmonetary default after the date upon which Agency and /or City shall have given written notice of the default to Developer; provided however, if the default is of a nature that it cannot be cured within thirty (30) days, an Event of Developer Default shall not arise hereunder if Developer commences to cure the default within thirty (30) days and thereafter prosecutes the curing of such default with due diligence and in good faith to completion and in no event later than ninety (90) days after receipt of notice of the default. 10.2. Agency's and City's Right to Terminate Agreement. If an Event of Developer Default shall occur and be continuing beyond any applicable cure period, then City and Agency shall, in addition to other rights available to it under law or this Agreement, have the right to terminate this Agreement upon thirty (30) days notice to Developer. If Agency and /or City makes such election, Agency and /or City shall give written notice to Developer and to any mortgagee entitled to such notice specifying the nature of the default and stating that this Agreement shall expire and terminate on the date specified in such notice, which shall be thirty (30) days or more from the notice date, and upon the specified date, this Agreement and all rights of Developer under this Agreement, shall expire and terminate. 10.3. Agency's Remedies and Rights Upon an Event of Developer Default. Upon the occurrence of an Event of Developer Default related to the Project prior to property conveyance or related to the Grand - Cypress Avenue Property following property conveyance, and the expiration of any applicable cure period, Agency shall have all remedies available to it under 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 Developer, 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 and declare the balance of the Agency 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 Grand - Cypress Avenue Property under the applicable Deed of Trust; (d) Obtain sole rights of possession and use for all design and planning documents related to the construction of the Project related to the Grand - Cypress Property to the extent assignable. (e) 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. 34 43 10.4. City's Remedies and Rights Upon an Event of Developer Default. Upon the occurrence of an Event of Developer Default related to the Project prior to property conveyance or related to the Linden Avenue Property following property conveyance, and the expiration of any applicable cure period, City shall have all remedies available to it under this Agreement or under law or equity, including, but not limited to the following, and City may, at its election, without notice to or demand upon Developer, except for notices or demands required by law or expressly required pursuant to the City Documents, exercise one or more of the following remedies: (a) Accelerate and declare the balance of the City Note and interest accrued thereon immediately due and payable; (b) Seek specific performance to enforce the terms of the City Documents; (c) Foreclose on the Linden Avenue Property under the applicable Deed of Trust; (d) Obtain sole rights of possession and use for all design and planning documents related to the construction of the Project related to the Linden Property to the extent assignable. (e) Pursue any and all other remedies available under this Agreement or under law or equity to enforce the terms of the City Documents and City's rights thereunder. 10.5. No Cross Default. Except as otherwise expressly stated in this Agreement, (a) a default by Developer under the City Documents shall not by itself constitute a default under the Agency Documents allowing the Agency to exercise its remedies thereunder, and (b) a default by Developer under the Agency Documents shall not by itself constitute a default under the City Documents allowing the City to exercise its remedies thereunder. The rights and remedies of the City and Agency under the City Documents and the Agency Documents, respectively, are separate and distinct, and the exercise by either the Agency or City of one or more of such rights or remedies thereunder shall not by itself permit the exercise of rights and remedies by the other. 10.6. Inaction Not a Waiver of Default. No failure or delay by City or Agency 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 City or Agency 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. 10.7. Agency's Option to Purchase, Enter and Possess. The Agency shall have the additional right at its option to purchase, enter and take possession of the Grand - Cypress Avenue Property with all improvements thereon (the "Repurchase Option "), if after conveyance of the Grand - Cypress Avenue Property, Developer (i) fails to begin construction of the Project on the Grand - Cypress Avenue Property within the time specified in Section 4.9 as such date may be extended pursuant to the terms hereof, (ii) abandons or suspends construction of the Project on the Grand - Cypress Avenue Property for a period of sixty (60) days after written notice from Agency, (iii) fails to complete construction of the Project on the Grand - Cypress Avenue Property 35 44 by the time specified in Section 4.9 as such date may be extended pursuant to the terms hereof, or (iv) directly or indirectly, voluntarily or involuntarily Transfers the Grand - Cypress Avenue Property or this Agreement in violation of Article VIll. To exercise the Repurchase Option, the Agency shall pay to the Developer cash in an amount equal to: (i) The the principal amount that has been repaid to the date of default on the Loan for the Grand - Cypress Avenue Purchase Price; plus (ii) The fair market value of any new improvements existing on the Grand - Cypress Avenue Property at the time of exercise of the Repurchase Option; less (iii) Any gains or income withdrawn or made by the Developer from the applicable portion of the Grand - Cypress Avenue Property or the improvements thereon; less (iv) The amount of grant funds that were provided by the City to partially finance the construction of the Project for the Grand - Cypress Avenue Property; less (v) The value of any liens or encumbrances on the applicable portion of the Property the Agency assumes or takes subject to; less (vi) Any damages to which the Agency is entitled under this Agreement by reason of Developer's default. In order to exercise the Repurchase Option, Agency shall give Developer notice of such exercise, and Developer shall, within thirty (30) days after receipt of such notice, provide Agency with a summary of all of Developer's costs incurred as described in this Section. Within thirty (30) days of Agency's receipt of such summary, Agency shall pay into an escrow established for such purpose cash in the amount of all sums owing pursuant to this Section 10.7, and Developer shall execute and deposit into such escrow a grant deed transferring to Agency all of Developer's interest in the Grand - Cypress Avenue Property or portion thereof, as applicable and the improvements located thereon. In no event shall Developer be required to reimburse any City Grants or pay any amounts to Agency in connection with their exercise of the Repurchase Option. 10.8. City's Option to Purchase, Enter and Possess. The City shall have the additional right at its option to purchase, enter and take possession of the Linden Avenue Property with all improvements thereon (the "Repurchase Option "), if after conveyance of the Linden Avenue Property, Developer (i) fails to begin construction of the Project on the Linden Avenue Property within the time specified in Section 4.9 as such date may be extended pursuant to the terms hereof, (ii) abandons or suspends construction of the Project on the Linden Avenue Property for a period of sixty (60) days after written notice from City, (iii) fails to complete construction of the Project on the Linden Avenue Property by the time specified in Section 4.9 as such date may be extended pursuant to the terms hereof, or (iv) directly or indirectly, voluntarily or involuntarily Transfers the Linden Avenue Property or this Agreement in violation of Article VIII. To exercise the Repurchase Option, the City shall pay to the Developer cash in an amount equal to: (i) The the principal amount that has been repaid to the date of default on the Loan for the Linden Avenue Purchase Price; plus (ii) The fair market value of any new improvements existing on the Linden Avenue Property at the time of exercise of the Repurchase Option; less (iii) Any gains or income withdrawn or made by the Developer from the applicable portion of the Linden Avenue Property or the improvements thereon; less (iv) The amount of grant funds that were provided by the City to partially finance the construction of the Project for the Linden Avenue Property; less (v) The value of any liens or encumbrances on the applicable portion of the Property the City assumes or takes subject to; less (vi) Any damages to which the City is entitled under this Agreement by reason of Developer's default. In order to exercise the Repurchase Option, Agency shall give Developer notice of such exercise, and Developer shall, within thirty (30) days after receipt of such notice, provide Agency with a summary of all of Developer's costs incurred as described in this Section. Within thirty (30) days of Agency's receipt of such summary, Agency shall pay into an escrow established for such purpose cash in the amount of all sums owing pursuant to this Section 10.8, and Developer shall execute and deposit into such escrow a grant deed transferring to Agency all of Developer's interest in the Linden Avenue Property or portion thereof, as applicable and the improvements located thereon. In no event shall Developer be required to reimburse any City Grants or pay any amounts to Agency in connection with their exercise of the Repurchase Option. 10.9. Memorandum of Option to Purchase. The parties shall cause a memorandum or memoranda of the rights granted to the Agency and City in Section 10.9 of this Agreement to be recorded in the official records of San Mateo County at the time of the Close of Escrow for conveyance of the Property to Developer. In lieu of such memorandum, the rights afforded Agency and City pursuant to Sections 10.8 may be described in the Agency Grant Deed and City Grant Deed. 10.10. Construction Plans. If this Agreement is terminated pursuant to Section 10.3, the Developer, at no cost to the Agency and City, shall deliver to the Agency and City copies of any construction plans, BCD's (including OMR's) and studies in the Developer' possession or in the possession of the Developer' s consultants related to development of the Project on the Property, subject to the rights of third parties. In the event the Agency and /or City utilizes the construction plans or studies, the Agency and /or City shall indemnify the Developer for any claims arising from the use of construction plans or studies by the Agency and /or City pursuant to this Section 10.10. 37 46 10.1 1. Rights of Mortgagees. Any rights of the Agency and City under this Article X shall not defeat, limit or render invalid any mortgage or deed of trust permitted by this Agreement or any rights provided for in this Agreement for the protection of holders of such instruments. Any conveyance of the Property to the Agency and /or City pursuant to this Article X shall be subject to mortgages and deeds of trust permitted by this Agreement. ARTICLE XI INDEMNITY AND INSURANCE. 11.1. Indemnitv. To the fullest extent permitted by law, Developer shall indemnify, defend (with counsel approved by Agency and City) and hold Indemnitees harmless from and against any and all Claims, including without limitation, Claims arising directly or indirectly, in whole or in part, as a result of or in connection with Developer's or Developer's contractors, subcontractors, agents or employees development, construction, improvement, operation, ownership or maintenance of the Project or the Property, or any part thereof or otherwise arising out of or in connection with Developer's performance under this Agreement. Developer's indemnification obligations under this Section 11.1 shall not extend to Claims resulting solely from the gross negligence or willful misconduct of Indemnitees. The provisions of this Section 11.1 shall survive the issuance of a Certificate of Completion for the Project and the expiration or earlier termination of this Agreement. It is further agreed that Agency and City do not and shall not waive any rights against Developer that they may have by reason of this indemnity and hold harmless agreement because of the acceptance by Agency or City, or the deposit with Agency or City by Developer, of any of the insurance policies described in this Agreement. 11.2. Liability and Workers Compensation Insurance. (a) Prior to initiating work on the Project and continuing through the issuance of the Certificate of Completion, Developer and all contractors working on behalf of Developer 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 and /or City 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) Until issuance of the Certificate of Completion, Developer and all contractors working on behalf of Developer shall maintain a comprehensive automobile liability coverage in the amount of One Million Dollars ($1,000,000), combined single limit including coverage for owned and non -owned vehicles and shall furnish or cause to be furnished to City and Agency evidence satisfactory to Agency and City that Developer and any contractor with whom Developer has contracted for the performance of work on the Property or otherwise pursuant to this Agreement carries workers' compensation insurance as required by law. Automobile liability policies shall name the Indemnitees as additional insureds. 38 47 (c) Upon commencement of construction work and continuing until issuance of a Certificate of Completion, Developer and all contractors working on behalf of Developer 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 and City as loss payees. (d) Developer shall maintain property insurance covering all risks of loss (other than earthquake), including flood (if required) for 100% of the replacement value of the Project with deductible, if any, in an amount acceptable to Agency and City, naming Agency and City as loss payees. (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 commencement of construction work, Developer shall furnish Agency and City with certificates of insurance in form acceptable to Agency and City evidencing the required insurance coverage and duly executed endorsements evidencing such additional insured status. The certificates shall contain a statement of obligation on the part of the carrier to notify City 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, Developer shall, within fifteen (15) days after receipt of notice of such cancellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with 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 Developer's expense, and Developer shall promptly reimburse Agency and /or City for such expense upon receipt of billing from Agency and /or City. (h) Coverage provided by Developer shall be primary insurance and shall not be contributing with any insurance, or self - insurance maintained by Agency and /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. Developer shall furnish the required certificates and endorsements to Agency and City prior to the commencement of construction of the Project, and shall provide Agency and City with certified copies of the required insurance policies upon request of Agency and City. I ARTICLE XII MISCELLANEOUS PROVISIONS 12.1. No Brokers. Each Party warrants and represents to the other that no person or entity can properly claim a right to a real estate commission, real estate brokerage fee, finder's fee, or other compensation with respect to the transfer of the Property contemplated by this Agreement. Each Party agrees to defend, indemnify and hold harmless the other Party from any claims, expenses, costs or liabilities arising in connection with a breach of this warranty and representation. The terms of this Section shall survive the expiration or earlier termination of this Agreement. 12.2. Enforced Delay, Extension of Times of Performance. Subject to the limitations set forth below, performance by 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 any public or governmental agency or entity (other than the acts or failures to act of Agency or City which shall not excuse performance by Agency or City), or any other cause beyond the affected Party's reasonable control. An extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the Party claiming such extension is sent to the other 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 the Parties (the Agency acting in the discretion of its Executive Director unless he or she determines in his or her discretion to refer such matter to the governing board of the Agency and the City acting in the discretion of its City Manager unless he or she determines in his or her discretion to refer such matter to the City Council). The Parties 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 Project shall not constitute grounds of enforced delay pursuant to this Section. Each Party expressly assumes the risk of such adverse economic or market changes and /or financial inability, whether or not foreseeable as of the Effective Date. 12.3. Notices. Except as otherwise specified in this Agreement, all notices to be sent pursuant to this Agreement shall be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other Parties in accordance with this Section. All such notices shall be sent by: (i) personal delivery, in which case notice is effective upon delivery; 40 49 (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 overnight 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. City: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attention: City Manager Fax: (650) 829 -6609 with a copy to: Meyers Nave Attn: Jason Rosenberg 575 Market Street, Suite 2080 San Francisco, CA 94105 Tel: (415) 421 -3711 Fax: (415) 421 -3767 Agency: Successor Agency to the Redevelopment Agency of the City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: Agency Executive Director Fax Developer: Brookwood Equities LLC One Embarcadero Center, Suite 500 San Francisco, CA 94111 Tel: (415) 402 -0800 Fax: (415) 399 -9367 with a copy to: Leland, Parachini, Steinberg, Matzger & Melnick, LLP Attention: Nina P. Kwan, Esq. 199 Fremont Street, 21s' Flr. San Francisco, CA 94105 41 50 Tel: (415) 957 -1800 Fax: (415 974 -1520 12.4. Attorneys' Fees. If any Party fails to perform any of its obligations under this Agreement, or if any dispute arises between the Parties concerning the meaning or interpretation of any provision hereof, then the prevailing Party in any proceeding in connection with such dispute shall be entitled to the costs and expenses it incurs on account thereof and in enforcing or establishing its rights hereunder, including, without limitation, court costs and reasonable attorneys' fees and disbursements. 12.5. Waivers, Modification. No waiver of any breach of any covenant or provision of this Agreement shall be deemed a waiver of any other covenant or provision hereof, and no waiver shall be valid unless in writing and executed by the waiving Party. An extension of time for performance of any obligation or act shall not be deemed an extension of the time for performance of any other obligation or act, and no extension shall be valid unless in writing and executed by the Party granting the extension. This Agreement may be amended or modified only by a written instrument executed by the Parties. 12.6. Binding on Successors. Subject to the restrictions on Transfers set forth in Article VIII, this Agreement shall bind and inure to the benefit of the Parties and their respective permitted successors and assigns. Any reference in this Agreement to a specifically named Party shall be deemed to apply to any permitted successor and assign of such Party who has acquired an interest in compliance with this Agreement or under law. 12.7. Survival. All representations made by Developer hereunder and Developer's obligations pursuant to Sections 4.17, 4.20, 4.21, 7.4, 11.1, 12. 1, and 12.18 shall survive the expiration or termination of this Agreement and the issuance and recordation of a Certificate of Completion. None of the provisions, terms, representations, warranties and covenants of this Agreement are intended to or shall be merged by any grant deed conveying the Property to Developer or any successor in interest, and neither such grant deed nor any other document shall affect or impair the provisions, terms, representations, warranties and covenants contained herein. 12.8. 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 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. 12.9. Action or Approval. Whenever action and /or approval by Agency is required under this Agreement, Agency's Chair or his or her designee may act on and /or approve such matter unless specifically provided otherwise, or unless the Chair determines in his or her discretion that such action or approval requires referral to Agency's Board for consideration. Whenever action and /or approval by City is required under this Agreement, the City Manager or his or her designee may act on and /or approve such matter unless specifically provided 42 51 otherwise, or unless the City Manager determines in his or her discretion that such action or approval requires referral to the City Council for consideration. 12.10. Entire Agreement. This Agreement, including Exhibits A through I attached hereto and incorporated herein by this reference, together with the other Agency Documents and City Documents contains the entire agreement between the Parties with respect to the subject matter hereof, and supersedes all prior written or oral agreements, understandings, representations or statements between the Parties with respect to the subject matter hereof. 12.11. 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. 12.12. 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. 12.13. No Third Party Beneficiaries. Nothing contained in this Agreement is intended to or shall be deemed to confer upon any person, other than the Parties and their respective successors and assigns, any rights or remedies hereunder. 12.14. 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. 12.15. Non - Liability of Officials, Employees and Agents. No officer, official, employee or agent of Agency or City shall be personally liable to Developer or its successors in interest in the event of any default or breach by Agency or City or for any amount which may become due to Developer or its successors in interest pursuant to this Agreement. 12.16. Time of the Essence, Calculation of Time Periods. Time is of the essence for each condition, term, obligation and provision of this Agreement. Unless otherwise specified, in computing any period of time described in this Agreement, the day of the act or event after which the designated period of time begins to run is not to be included and the last day of the period so computed is to be included, unless such last day is not a business day, in which event the period shall run until the next business day. The final day of any such period shall be deemed to end at 5:00 p.m., local time at the Property. For purposes of this Agreement, a "business day" means a day that is not a Saturday, Sunday, a federal holiday or a state holiday under the laws of California. 12.17. 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 43 52 San Mateo County, California or in the Federal District Court for the Northern District of California. 12.18. General Indemnification. Developer shall indemnify, defend (with counsel approved by Agency and City) and hold harmless Indemnitees 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 Developer 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, Developer shall reimburse Agency and City for reasonable attorneys' fees and expenses incurred. IN WITNESS WHEREOF, the Parties have entered into this Agreement effective as of the date first written above. CITY CITY OF SOUTH SAN FRANCISCO, A MUNICIPAL CORPORATION By: Name: Title: ATTEST: By: Krista Martinelli, City Clerk APPROVED AS TO FORM: By: Jason Rosenberg, City Attorney 44 53 AGENCY SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO, A PUBLIC AGENCY By: Name: Title: ATTEST: By: Krista Martinelli, Agency Secretary APPROVED AS TO FORM: By: Jason Rosenberg, Agency Counsel DEVELOPER BROOKWOOD EQUITIES LLC, a Delaware limited liability company By: BROOKWOOD GROUP, INC., a California corporation, its Manager in Shepherd Heery Chairman and Chief Executive Officer 45 54 Exhibit A -1 LEGAL DESCRIPTION OF LINDEN AVENUE PROPERTY (Attach legal description.) Exhibit A -2 LEGAL DESCRIPTION OF GRAND- CYPRESS AVENUE PROPERTY (Attach legal description.) Exhibit B FORM OF MEMORANDUM OF DISPOSITION AND DEVELOPMENT AGREEMENT (Attach form of Memorandum.) Exhibit C -1 FORM OF GRAND - CYPRESS PURCHASE AND SALE AGREEMENT (Attach form of Purchase and Sale Agreement.) Exhibit C -2 FORM OF LINDEN PURCHASE AND SALE AGREEMENT (Attach form of Purchase and Sale Agreement.) Exhibit D -1 FORM OF CITY NOTE (Attach form of Promissory Note.) Exhibit D -2 FORM OF AGENCY NOTE (Attach form of Promissory Note.) Exhibit E -1 FORM OF CITY DEED OF TRUST (Attach Deed of Trust) Exhibit E -1 FORM OF AGENCY DEED OF TRUST (Attach Deed of Trust) Exhibit F -1 FORM OF LINDEN REGULATORY AGREEMENT (Attach form of Regulatory Agreement.) Exhibit F -2 FORM OF GRAND - CYPRESS REGULATORY AGREEMENT (Attach form of Regulatory Agreement.) Exhibit G APPLICABLE LAWS (Attach Applicable Laws.) RXh;h;t N PRELIMINARY FINANCING PLAN (Attach Financing Plan) Exhibit I FORM OF CITY CERTIFICATE OF COMPLETION (Attach form of Certificate.) Exhibit J FORM OF AGENCY CERTIFICATE OF COMPLETION (Attach form of Certificate.) 47 56 DDA Exhibit A -1 Legal Description of Linden Avenue Property 57 ORDER NO.: 0227007201 -DP EXHIBITi A The land referred to is situated in the County of San Mateo, City of South San Francisco, State of California, and is described as follows: LOTS 10 and 11, BLOCK 138, as delineated upon that certain Map entitled "SOUTH SAN FRANCISCO, SAN MATEO CO., CAL. PLAT NO. 1 ", flied for record in the Office of the Recorder of the County of San Mateo, State of California, on March 1st, 1892 in Book "B" of Maps, at Page 6 and copied into Book 2 of Maps at Page 52. APN: 012 - 314010 I.P.N. 012 - 031 -31401 DDA Exhibit A -2 Legal Description of Grand - Cypress Avenue Property 59 Exhibit A 'Ci=: , Lot 29 in Block 149, as shown on that certain may entitled "SOUTH SAN FRANCISCO, SAN MATEO COUNTY, CALIFORNIA, PLAT IBC. 1 ", filed in the office of the County Recorder of San Mateo County, State of California, on March 1, 1892 in rl LEGAL DESCRIPTION The land referred to herein is situated in the State of California, County of San Mateo, City of South San Francisco, and described as follows: Lot 28, in Block 140, as designated on the map entitled "South San Francisco, San Mateo Co. Cal, Plat No. 1 ", which map was filed in the office of the Recorder of the County of San Mateo, State of California on March 1, 1892 in Book `B" of Maps, at Page 6, and a copy entered in Book 2 of Maps, at Page 52. APN's: 012 - 316 -100 (End of Legal Description) 61 Exhibit A LEGAL DESCRIPTION The land referred to herein is situated in the State of California, County of San Mateo, City of South San Francisco, and described as follows: Lots 25, 26 and 27 in Block 140, as designated on the map entitled "South San Francisco, San Mateo Co. Cal, Plat No. 1 ", which map was filed in the office of the Recorder of the County of San Mateo, State of California on March 1, 1892 in Book "B" of Maps, at Page 6, and a copy entered in Book 2 of Maps, at page 52. APN: 012 -316 -080 012 -316 -090 (End of Legal Description) 62 DDA Exhibit B Form of Memorandum of DDA and Option 63 Recording Requested by and when Recorded, return to: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attention: City Manager EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE §§6103,27383 (SPACE ABOVE THIS LINE RESERVED FOR RECORDER'S USE) MEMORANDUM OF DISPOSITION AND DEVELOPMENT AGREEMENT This Memorandum of Disposition and Development Agreement (this "Memorandum ") dated as of , 2015, is entered into by and between the City of South San Francisco, a municipal corporation ( "City "), the Successor Agency to the Redevelopment Agency of the City of South San Francisco ( "Agency "), and Brookwood Equities, LLC, a Delaware limited liability company ( "Developer "). City, Agency and Developer are hereinafter collectively referred to as the "Parties." 1. DDA; Conveyance. The Parties have entered into that certain Disposition and Development Agreement dated as of , 2015 (the "DDA "), pursuant to which (a) City has agreed to sell to Developer and Developer has agreed to purchase and redevelop certain real property (the "Linden Avenue Property ") located at 418 Linden Avenue, known as San Mateo County Assessor's Parcel Nos. 012 - 314 -010 and more particularly described in Exhibit A -1 attached hereto and incorporated herein by this reference; (b) Agency has agreed to sell to Developer and Developer has agreed to purchase and redevelop certain real property (the "Grand- Cypress Avenue Property") located at 201 -219 Grand Avenue, known as San Mateo County Assessor's Parcel Nos. 012 -316 -110, 012 - 316 -100, 012 -316 -090 and 012 -316 -080 and more particularly described in Exhibit A -2 attached hereto. The Linden Avenue Property and Grand - Cypress Avenue Property are hereinafter collectively referred to as the "Property." 2. Schedule for Construction. Among other conditions, the DDA provides that by not later than 30 months of Effective Date (unless such date is extended by mutual agreement of the Parties), Developer shall have completed construction of a mixed -used, multi - residential rental project (as more particularly described in the DDA, the "Project ") on the Property which will be subject to certain maintenance obligations pursuant to the terms of the DDA and Affordable Housing Regulatory Agreements and Declaration of Restrictive Covenants ( "Regulatory Agreements ") for the Linden Avenue Property and the Grand - Cypress Avenue Property, which shall be executed by City or Agency, as applicable, and Developer and recorded in Official Records of San Mateo County substantially concurrently herewith. 3. City and Agency Option to Repurchase, Power of Termination. The DDA further provides that the City and the Agency have the right to purchase the Property pursuant to certain option rights as more particularly described in the DDA upon the occurrence of certain events, {S:BRKwD /000I/AGR/0I106479.DOCx }2447873.2 64 including without limitation Developer's failure to commence construction of the Project within twelve (12) months following City's conveyance of the Property to Developer, Developer's failure to complete construction of the Project within the time period set forth in Section 2 above, Developer's transfer of the Property in violation of the DDA, and the occurrence of certain other events of default, as more particularly described in the DDA. 4. Restrictions on Transfer. The DDA further provides that prior to expiration of the term of the Regulatory Agreements: (i) except as permitted by the DDA, Developer shall not voluntarily or involuntarily make or attempt any total or partial sale, transfer, conveyance, assignment or lease of the whole or any part of the Property or the improvements located thereon without the prior written approval of the City and /or 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 DDA which pertain to the portion of the Property transferred, including without limitation, the provisions of the Regulatory Agreement. 5. DDA Controls. The Parties have executed and recorded this instrument to give notice of the DDA and the respective rights of the Parties thereunder. Copies of the unrecorded DDA are available at the offices of the City, 400 Grand Avenue, South San Francisco, CA 94080, and such document is incorporated by reference in its entirety in this Memorandum. This Memorandum is solely for recording purposes and shall not be construed to alter, modify, amend or supplement the DDA. In the event of any inconsistency between this Memorandum and the DDA, the DDA shall control. 6. Interpretation; Counterparts. 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, each of which shall be an original and all of which together shall constitute one instrument. 7. Binding Effect. The DDA shall bind and inure to the benefit of the Parties and their respective successors and assigns, subject to the provisions of the DDA concerning assignment. 8. Termination. Upon completion of construction of the Project in accordance with the DDA, the restrictions upon transfer described in Section 4 and the City's and Agency's rights to reacquire the Property described in Section 3 shall terminate and upon request, City and Agency agree to record a Certificate of Completion, and a termination of this Memorandum. SIGNATURES ON FOLLOWING PAGE fSARKWn /000VAGR/011o6479.Docx }2447873.2 65 IN WITNESS WHEREOF, the Parties hereto have executed this Memorandum as of the date first set forth above. CITY CITY OF SOUTH SAN FRANCISCO, a municipal corporation By: Mike Futrell, City Manager ATTEST: By: Krista Martinelli, City Clerk APPROVED AS TO FORM: By: Jason Rosenberg, City Attorney AGENCY SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO, a public agency By: Mike Futrell, Agency Executive Director ATTEST By: Krista Martinelli, Agency Secretary APPROVED AS TO FORM: in Jason Rosenberg, Agency Counsel fSARKWD/000VAGR/011o6479.Docx }2447873.2 66 DEVELOPER BROOKWOOD EQUITIES LLC, a Delaware limited liability company By: BROOKWOOD GROUP, INC., a California corporation, its Manager Shepherd Heery Chairman and Chief Executive Officer SIGNATURES MUST BE NOTARIZED. fSARKWD/000VAGR/011o6479.Docx }2447873.2 67 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validlity of that document. 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) 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) A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validlity of that document. 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) 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. fSARKWD/000vaGlvo11o6479.Docx }2447873.2 68 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) {s:BRKwD/000vaGR/011o6479.Docx }2447873.2 69 Exhibit A -1 LINDEN AVENUE PROPERTY (Attach legal description.) {SARKWD/000VAGR/01106479.Docx }2447873.2 70 Exhibit A -2 GRAND - CYPRESS AVENUE PROPERTY (Attach legal description.) {SARKWD/000VAGR/01106479.Docx }2447873.2 71 DDA Exhibit C -1 Form of City Purchase and Sale Agreement 72 PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS ( "this Agreement") is made and entered into as of (the "Effective Date "), by and between the City of South San Francisco, a municipal corporation, ( "City" or the "Seller ") and Brookwood Equities LLC ( "Buyer "). Seller and Buyer are collectively referred to herein as the "Parties." RECITALS A. City is the owner of the real property located in the City of South San Francisco at 418 Linden Avenue, known as San Mateo County Assessor's Parcel Nos. 012 - 314 -010 and more particularly described in Exhibit A -1 attached hereto (the "Linden Avenue Property" or the "Property "). B. Buyer intends to create or has created a special purpose entity called Brookwood Linden Venture LLC ( "BLV ") for the Linden Avenue Property to serve as the ownership entity for the Project, defined below. For purposes of this Agreement and where the context warrants, a reference to the Buyer shall be to BLV for the Linden Avenue Property once BLV has been formed and assumed the obligations of Buyer for such Property. C. On , 2015, Buyer and Seller entered into that certain Disposition and Development Agreement (the "DDA "), pursuant to which Seller agreed to sell the Property to Buyer for construction of a residential development consisting of approximately 38 multi - family residential units, at least 8 of which will be affordable to low- and moderate - income households (the "Project ") pursuant to the terms set forth therein. D. The Property is subject to the Linden Regulatory Agreement to be concurrently recorded in the official records of San Mateo County. A copy of the Linden Regulatory Agreement is attached hereto as Exhibit D. NOW, THEREFORE, for and in consideration of the mutual covenants and agreements contained in this Agreement, and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged by the parties, Seller and Buyer hereby agree as follows: 1. INCORPORATION OF RECITALS AND EXHIBITS. The Recitals set forth above and the Exhibits attached to this Agreement are each incorporated into the body of this Agreement as if set forth in full. 2. PURCHASE AND SALE. 2.1. Agreement to Buy and Sell. Subject to the terms and conditions set forth herein, Seller agree to sell the Property to Buyer, and Buyer hereby agrees to acquire the Property from Seller. {S:BRKWD /0001 /AGR/01105431.DOCX} 1 73 2.2. Purchase Price. The purchase price for the Linden Avenue Property to be paid by Buyer to City is One Million Three Hundred and Eighty Eight Thousand Dollars ($1,388,000) ( "Purchase Price "). 2.3. Sale of Linden Avenue Property. The Purchase Price for the Linden Avenue Property shall be paid by execution of a promissory note by Buyer in the principal amount of One Million Three Hundred Eighty -Eight Thousand Dollars ($1,388,000), with annual payments of Twenty Seven Thousand Seven Hundred Fifty Dollars ($27,750), plus accrued interest, commencing one (1) year after the Certificate of Completion of the Linden Avenue Property, an interest rate of One (1 %) and a term of thirty (30) years (the "City Note ") in the form attached hereto as Exhibit D. The City Note shall be secured by a Deed of Trust on the Linden Avenue Property in the form attached hereto as Exhibit E (the "City Deed of Trust "). The City Note and Deed of Trust shall be subordinated to the permanent and construction financing for the Project and the City shall execute any subordination agreement, if necessary, required by the Buyer and the lender providing the permanent or construction financing for the Project. 2.4. Assignment and Assumption by Buyer Entities. For purposes of this Agreement and where the context warrants, a reference to the Buyer shall be to BLV for the Linden Avenue Property once BLV has been formed and assumed the obligations of Buyer for such Property. Upon execution of an assignment and assumption agreement between Buyer, as assignor, and BLV, as assignee, in form and content acceptable to the City, Buyer shall be released from all obligations under this DDA, the Purchase and Sale Agreement, and the City Documents. ESCROW. 3.1. Escrow Account. Seller has opened an escrow account (the "Escrow ") maintained by First American Title Insurance Company (the "Escrow Holder "). Escrow Holder shall perform all escrow and title services in connection with this Agreement. 3.2. Opening of Escrow. Within seven (7) business days after the Effective Date, the Parties will deposit into Escrow the fully executed Agreement, or executed counterparts thereto. The date such fully executed Agreement is received by Escrow Holder will be deemed the "Opening of Escrow." 4. PROPERTY DISCLOSURE REQUIREMENTS. 4.1. Condition of Title /Preliminary Title Report. Escrow Holder has delivered a Preliminary Title Report for the Property (the "Preliminary Report ") to Buyer. Buyer has reviewed the Preliminary Report and approved all of the following exceptions to title, (the "Permitted Exceptions "): (a) standard printed exceptions in the Preliminary Report; (b) general and special real property taxes and assessments constituting a lien not yet due and payable; and (c) the "Permitted Exceptions" listed on Exhibit C attached hereto. 4.2. Environmental and Natural Hazards Disclosure. California Health & Safety Code section 25359.7 requires owners of non - residential real property who know, or have reasonable cause to believe, that any release of hazardous substances are located on or beneath {S:BRKWD /0001 /AGR/01105431.DOCX} 2 74 the real property to provide written notice of same to the buyer of real property. Other applicable laws require Seller to provide certain disclosures regarding natural hazards affecting the Property. Seller agrees to make all necessary disclosures required by law. CLOSING AND PAYMENT OF PURCHASE PRICE. 5.1. Closing. The closing (the "Closing" or "Close of Escrow ") will occur no later than (i) thirty (30) days after the Buyer has received firm financing commitments for the financing and construction of the Project (provided Buyer has finalized and is ready to enter into the final design and construction contracts for the Project) ( "Closing Date ") or such other date as the Parties agree in writing. 5.2. Buyer's Conditions to Closing. Buyer's obligation to purchase the Property is subject to the satisfaction of all of the following conditions or Buyer's written waiver thereof (in Buyer's sole discretion) on or before the Closing Date: (a) Buyer has approved the condition of the Property. Buyer will have forty -five (45) calendar days from Opening of Escrow (the "Due Diligence Contingency Period ") to complete physical inspections of the Property and due diligence related to the purchase of the Property. Seller shall provide to Buyer copies of all reasonably available and known documents relating to the ownership and operation of the Property, including but not limited to plans, permits and reports (environmental, structural, mechanical, engineering and land surveys) that Seller have in its possession not later than two (2) business days following the execution and delivery of this Agreement. All physical inspections must be coordinated with Seller' representative. Buyer hereby agrees to indemnify and hold Seller harmless for any damage to the Property caused (but not merely revealed) by Buyer's inspections. (b) Seller have performed all obligations to be performed by Seller pursuant to the DDA and this Agreement. (c) Seller' representations and warranties in the DDA and herein are true and correct in all material respects as of the Closing Date. (d) The Title Company is irrevocably committed to issue a CLTA Title Policy to Buyer, effective as of the Closing Date, insuring title to Buyer in the full amount of the Purchase Price. 5.3. Seller's Conditions to Closing. The Close of Escrow and Seller's obligation to sell and convey the Property to Buyer are subject to the satisfaction of the following conditions or Seller's written waiver (in Seller's sole discretion) of such conditions on or before the Closing Date: (a) Buyer has performed all obligations to be performed by Buyer pursuant to the DDA and this Agreement before Closing Date. (b) Buyer's representations and warranties set forth in the DDA and herein are true and correct in all material respects as of the Closing Date. {S:BRKWD /0001 /AGR/01105431.DOCX} 3 75 5.4. Conveyance of Title. Seller will deliver marketable fee simple title to Buyer at the Closing, subject only to the Permitted Exceptions. The Property will be conveyed by Seller to Buyer in an "as is" condition, with no warranty, express or implied, by Seller as to the physical condition including, but not limited to, the soil, its geology, or the presence of known or unknown faults or Hazardous Materials or hazardous waste (as defined by Section 12); provided, however, that the foregoing shall not relieve Seller from disclosure of any such conditions of which Seller have actual knowledge. 5.5 Deliveries at Closing. (a) Deliveries by Seller. Seller shall deposit into the Escrow for delivery to Buyer at Closing: (i) a grant deed, substantially in the form attached hereto as Exhibit B ( "Grant Deed "); (ii) an affidavit or qualifying statement which satisfies the requirements of paragraph 1445 of the Internal Revenue Code of 1986, as amended, any regulations thereunder (the "Non- Foreign Affidavit "); (iii) a California Franchise Tax Board form 590 to satisfy the requirements of California Revenue and Taxation Code Section 18805(b) and 26131, and (iv) immediately available funds to cover Seller's share of escrow fees, closing costs, and any other costs that are the responsibility of Seller under this Agreement. (b) Deliveries by Buyer. No less than one (1) business day prior to the close of escrow, Buyer shall deposit into escrow the Promissory Notes and the Deeds of Trust for the Property and immediately available funds to cover (i) the escrow fees and recording fees; and (ii) the cost of the Title Policy, and (iii) any other costs that are the responsibility of Buyer under this Agreement. (c) Closing. Upon Closing, Escrow Holder shall: (i) record the Grant Deed; (ii) deliver to Seller the City Note and City Deed of Trust; (iii) the Non - Foreign Affidavit, the California Certificate and the original recorded Grant Deed; (iv) pay any commissions and other expenses payable through escrow; and (vi) distribute to itself the payment of escrow fees and expenses required hereunder. (d) Closing Costs. Buyer will pay all escrow fees (including the costs of preparing documents and instruments), and recording fees. Buyer will also pay title insurance, title report costs and all transfer taxes. Seller will pay all governmental conveyance fees, where applicable. (e) Pro - Rations. At the close of escrow, the Escrow Agent shall make the following prorations: (i) property taxes will be prorated as of the close of escrow based upon the most recent tax bill available, including any property taxes which may be assessed after the close of escrow but which pertain to the period prior to the transfer of title to the Property to Buyer, regardless of when or to whom notice thereof is delivered; and (ii) any bond or assessment that constitutes a lien on the Property at the close of escrow will be assumed by Buyer. Seller does not pay ad valorem taxes. 6. REPRESENTATIONS. WARRANTIES AND COVENANTS. 6.1. Seller' Representations, Warranties and Covenants. In addition to the representations, warranties and covenants of Seller contained in the DDA and other sections of {S:BRKWD /0001 /AGR/0110543 LDOCX} 4 76 this Agreement, Seller hereby represents, warrants and covenants to Buyer that the statements below in this Section 6.1 are each true and correct as of the Closing Date provided however, if to Seller' actual knowledge any such statement becomes untrue prior to Closing, Seller will notify Buyer in writing and Buyer will have three (3) business days thereafter to determine if Buyer wishes to proceed with Closing. If Buyer determines it does not wish to proceed, then the terms of Section 8.2 will apply. (a) Authority. Seller is a public agency, lawfully formed, in existence and in good standing under the laws of the State of California. Seller has the full right, capacity, power and authority to enter into and carry out the terms of this Agreement. This Agreement has been duly executed by Seller, and upon delivery to and execution by Buyer is a valid and binding agreement of Seller. (b) Encumbrances. [Other than ,] Seller has not alienated, encumbered, transferred, mortgaged, assigned, pledged, or otherwise conveyed its interest in the Property or any portion thereof, nor entered into any Agreement to do so, and there are no liens, encumbrances, mortgages, covenants, conditions, reservations, restrictions, easements or other matters affecting the Property, except as disclosed in the Preliminary Report. Seller will not, directly or indirectly, alienate, encumber, transfer, mortgage, assign, pledge, or otherwise convey its interest prior to the Close of Escrow, as long as this Agreement is in force. (c) There are no agreements affecting the Property except those which have been disclosed by Seller. There are no agreements which will be binding on the Buyer or the Property after the Close of Escrow. The truth and accuracy of each of the representations and warranties, and the performance of all covenants of Seller contained in this Agreement are conditions precedent to Buyer's obligation to proceed with the Closing hereunder. The foregoing representations and warranties shall survive the expiration, termination, or close of escrow of this Agreement and shall not be deemed merged into the deed upon closing. 6.2. Buyer's Representations and Warranties. In addition to the representations, warranties and covenants of Buyer contained in the DDA and other sections of this Agreement, Buyer hereby represents, warrants and covenants to Seller that the statements below in this Section 6.2 are each true as of the Effective Date, and, if to Buyer's actual knowledge any such statement becomes untrue prior to Closing, Buyer shall so notify Seller in writing and Seller shall have at least three (3) business days thereafter to determine if Seller wishes to proceed with Closing. (a) Buyer is an individual investor or entity. Buyer has the full right, capacity, power and authority to enter into and carry out the terms of this Agreement. This Agreement has been duly executed by Buyer, and upon delivery to and execution by Seller shall be a valid and binding agreement of Buyer. (b) Buyer is not bankrupt or insolvent under any applicable federal or state standard, has not filed for protection or relief under any applicable bankruptcy or creditor {S:BRKWD /0001 /AGR/0110543 LDOCX} 5 77 protection statute, and has not been threatened by creditors with an involuntary application of any applicable bankruptcy or creditor protection statute. The truth and accuracy of each of the representations and warranties, and the performance of all covenants of Buyer contained in this Agreement are conditions precedent to Seller' obligation to proceed with the Closing hereunder. 7. DEFAULT, REMEDIES, TERMINATION. Either Party shall be in default of this Agreement ( "Default ") if such Party 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, unless a different time period is specified herein, after written notice thereof from the non - defaulting Party to the defaulting Party, or in the case of a Default that cannot with due diligence be cured within thirty (30) days or other time specified for herein, the defaulting Party fails to prosecute the curing of such Default with due diligence and in good faith to completion. Either Party shall have the right to terminate this Agreement upon a Default and expiration of any applicable cure period, and in accordance with the terms of this Agreement, in addition to pursuing all remedies available under law or equity. Except as otherwise provided herein, the rights and remedies of the Parties shall be cumulative; provided, however, that neither Party shall have a right to recover consequential or punitive damages. 8. BROKERS. Seller represents that no real estate broker has been retained by Seller in the sale of the Property or the negotiation of this Agreement. Buyer represents that no real estate broker has been retained by Buyer in the procurement of the Property or negotiation of this Agreement. Buyer shall indemnify, hold harmless and defend Seller from any and all claims, actions and liability for any breach of the preceding sentence, and any commission, finder's fee, or similar charges arising out of Buyer's conduct. 9. ASSIGNMENT. Absent an express signed written agreement between the Parties to the contrary, neither Seller nor Buyer may assign its rights or delegate its duties under this Agreement without the express written consent of the other, which consent may be withheld for any reason. No permitted assignment of any of the rights or obligations under this Agreement shall result in a novation or in any other way release the assignor from its obligations under this Agreement. 10. ENVIRONMENTAL INDEMNITY. To the fullest extent allowed by law, Buyer agrees to unconditionally and fully indemnify, protect, defend (with counsel satisfactory to Seller), and hold Seller, and their respective elected and appointed officers, officials, employees, agents, consultants and contractors harmless from and against any and all claims (including without limitation third party claims for personal injury, real or personal property damage, or damages to natural resources), actions, administrative proceedings (including without limitation both formal and informal proceedings), judgments, damages, punitive damages, penalties, fines, costs (including without limitation any and all costs relating to investigation, assessment, analysis or clean -up of the Property), liabilities (including without limitation sums paid in settlements of claims), interest, or losses, including reasonable attorneys' and paralegals' fees and expenses (including without limitation any such fees and expenses incurred in enforcing this Agreement or collecting any sums due hereunder), together with all other costs and expenses of any kind or nature (collectively, the "Costs ") that arise directly or indirectly from or in {S:BRKWD /0001 /AGR/0110543 LDOCX} 6 78 connection with the presence, suspected presence, release, or suspected release, of any Hazardous Materials in, on or under the Property or in or into the air, soil, soil gas, groundwater, or surface water at, on, about, around, above, under or within the Property, or any portion thereof, except those Costs that arise solely as a result of actions by Seller or actions by the City. The indemnification provided pursuant to this Section shall specifically apply to and include claims or actions brought by or on behalf of employees of Buyer or any of its predecessors in interest and Buyer hereby expressly waives any immunity to which Buyer may otherwise be entitled under any industrial or worker's compensation laws. In the event the Seller suffers or incurs any Costs, Buyer shall pay to Seller the total of all such Costs suffered or incurred by the Seller upon demand therefore by Seller. The indemnification provided pursuant to this Section shall include, without limitation, all loss or damage sustained by the Seller due to any Hazardous Materials: (a) that are present or suspected by a governmental agency having jurisdiction to be present in the Property or in the air, soil, soil gas, groundwater, or surface water at, on, about, above, under, or within the Property (or any portion thereof) or to have emanated from the Property, or (b) that migrate, flow, percolate, diffuse, or in any way move onto, into, or under the air, soil, soil gas, groundwater, or surface water at, on, about, around, above, under, or within the Property (or any portion thereof) after the date of this Agreement as a result of Seller' or its predecessors' activities on the Property. The provisions of this Section 10 shall survive the termination of this Agreement and the Close of Escrow. 11. RELEASE BY BUYER. Effective upon the Close of Escrow, and subject to Seller' representations under this Agreement and the DDA and any obligations arising under such agreements or applicable law, Buyer waives releases, remises, acquits and forever discharges Seller, and its officers, directors, board members, managers, employees and agents, and any other person acting on behalf of Seller, from any and all claims, actions, causes of action, demands, rights, damages, costs, expenses and compensation whatsoever, direct or indirect, known or unknown, foreseen or unforeseen, which Buyer now has or which may arise in the future on account of or in any way arising from or in connection with the physical condition of the Property or any law or regulation applicable thereto including, without limiting the generality of the foregoing, any federal, state or local law, ordinance or regulation pertaining to Hazardous Materials. This Section 11 shall survive the termination of this Agreement and the Close of Escrow. BUYER ACKNOWLEDGES THAT BUYER IS FAMILIAR WITH SECTION 1542 OF THE CALIFORNIA CIVIL CODE, WHICH PROVIDES AS FOLLOWS: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. BY INITIALING BELOW, BUYER EXPRESSLY WAIVES THE BENEFITS OF SECTION 1542 OF THE CALIFORNIA CIVIL CODE WITH RESPECT TO THE FOREGOING RELEASE: {S:BRKWD /0001 /AGR/01105431.DOCX} 7 79 Buyer's initials: 12. HAZARDOUS MATERIALS, DEFINITIONS. 12.1. Hazardous Materials. As used in this Agreement, "Hazardous Materials" means any chemical, compound, material, mixture, or substance that is now or may in the future be defined or listed in, or otherwise classified pursuant to any Environmental Laws (defined below) as a "hazardous substance ", "hazardous material ", "hazardous waste ", "extremely hazardous waste ", infectious waste ", toxic substance ", toxic pollutant ", or any other formulation intended to define, list or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, or toxicity. The term "Hazardous Materials" shall also include asbestos or asbestos - containing materials, radon, chrome and /or chromium, polychlorinated biphenyls, petroleum, petroleum products or by- products, petroleum components, oil, mineral spirits, natural gas, natural gas liquids, liquefied natural gas, and synthetic gas usable as fuel, perchlorate, and methyl tert butyl ether, whether or not defined as a hazardous waste or hazardous substance in the Environmental Laws. 12.2. Environmental Laws. As used in this Agreement, "Environmental Laws" means any and all federal, state and local statutes, ordinances, orders, rules, regulations, guidance documents, judgments, governmental authorizations or directives, or any other requirements of governmental authorities, as may presently exist, or as may be amended or supplemented, or hereafter enacted, relating to the presence, release, generation, use, handling, treatment, storage, transportation or disposal of Hazardous Materials, or the protection of the environment or human, plant or animal health, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C. § 9601), the Hazardous Materials Transportation Act (49 U.S.C. § 1801 el seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. § 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), the Oil Pollution Act (33 U.S.C. § 2701 et seq.), the Emergency Planning and Community Right -to -Know Act (42 U.S.C. § 11001 et seq.), the Porter - Cologne Water Quality Control Act (Cal. Water Code § 13000 et seq.), the Toxic Mold Protection Act (Cal. Health & Safety Code § 26100, et seq.), the Safe Drinking Water and Toxic Enforcement Act of 1986 (Cal. Health & Safety Code § 25249.5 et seq.), the Hazardous Waste Control Act (Cal. Health & Safety Code § 25100 et seq.), the Hazardous Materials Release Response Plans & Inventory Act (Cal. Health & Safety Code § 25500 et seq.), and the Carpenter - Presley- Tanner Hazardous Substances Account Act (Cal. Health and Safety Code, Section 25300 et seq.). 13. MISCELLANEOUS. 13.1. Attorneys' Fees. If any party employs counsel to enforce or interpret this Agreement, including the commencement of any legal proceeding whatsoever (including insolvency, bankruptcy, arbitration, mediation, declaratory relief or other litigation), the prevailing party shall be entitled to recover its reasonable attorneys' fees and court costs (including the service of process, filing fees, court and court reporter costs, investigative fees, expert witness fees, and the costs of any bonds, whether taxable or not) and shall include the right to recover such fees and costs incurred in any appeal or efforts to collect or otherwise {S:BRKWD /0001 /AGR/01105431.DOCX} 8 80 enforce any judgment in its favor in addition to any other remedy it may obtain or be awarded. Any judgment or final order issued in any legal proceeding shall include reimbursement for all such attorneys' fees and costs. In any legal proceeding, the "prevailing party" shall mean the party determined by the court to most nearly prevail and not necessarily the party in whose favor a judgment is rendered. 13.2. Interpretation. This Agreement has been negotiated at arm's length and each party has been represented by independent legal counsel in this transaction and this Agreement has been reviewed and revised by counsel to each of the Parties. Accordingly, each party hereby waives any benefit under any rule of law (including Section 1654 of the California Civil Code) or legal decision that would require interpretation of any ambiguities in this Agreement against the drafting party. 13.3. Survival. All indemnities, covenants, representations and warranties contained in this Agreement shall survive Close of Escrow. 13.4. Successors. Except as provided to the contrary in this Agreement, this Agreement shall be binding on and inure to the benefit of the Parties and their successors and assigns. 13.5. Governing Law. This Agreement shall be construed and interpreted in accordance with the laws of the State of California. 13.6. Integrated Agreement, Modifications. This Agreement contains all the agreements of the Parties concerning the subject hereof wand cannot be amended or modified except by a written instrument executed and delivered by the parties. There are no representations, agreements, arrangements or understandings, either oral or written, between or among the parties hereto relating to the subject matter of this Agreement that are not fully expressed herein. In addition there are no representations, agreements, arrangements or understandings, either oral or written, between or among the Parties upon which any party is relying upon in entering this Agreement that are not fully expressed herein. 13.7. Severability. If any term or provision of this Agreement is determined to be illegal, unenforceable, or invalid in whole or in part for any reason, such illegal, unenforceable, or invalid provisions or part thereof shall be stricken from this Agreement, any such provision shall not be affected by the legality, enforceability, or validity of the remainder of this Agreement. If any provision or part thereof of this Agreement is stricken in accordance with the provisions of this Section, then the stricken provision shall be replaced, to the extent possible, with a legal, enforceable and valid provision this is in keeping with the intent of the Parties as expressed herein. 13.8. Notices. Any delivery of this Agreement, notice, modification of this Agreement, collateral or additional agreement, demand, disclosure, request, consent, approval, waiver, declaration or other communication that either party desires or is required to give to the other party or any other person shall be in writing. Any such communication may be served personally, or by nationally recognized overnight delivery service (i.e., Federal Express) which {S:BRKWD /0001 /AGR/0110543 LDOCX} 9 81 provides a receipt of delivery, or sent by prepaid, first class mail, return receipt requested to the party's address as set forth below: To Buyer: Brookwood Equities LLC One Embarcadero Center, Suite 500 San Francisco, CA 94111 Tel: (415) 402 -0800 Fax: (415) 399 -9367 with a copy to: Leland, Parachini, Steinberg, Matzger & Melnick, LLP Attn: Nina P. Kwan 199 Fremont Street, 21s' Flr. San Francisco, CA 94105 Tel: (415) 957 -1800 Fax: (415) 974 -1520 To Seller: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: City Manager Tel (650) 877 -8501 Fax (650) 829 -6609 with a copy to: Meyers Nave Attn: Jason Rosenberg 575 Market Street, Suite 2080 San Francisco, CA 94105 Tel (415) 421 -3711 Fax (415) 421 -3767 If to Escrow Holder: First American Title Insurance Attn: Marc Bonfigh 101 Mission Street, Suite 1600 San Francisco, CA 94105 Tel (415) 837 -2235 Fax (714) 481 -4597 Any such communication shall be deemed effective upon personal delivery or on the date of first refusal to accept delivery as reflected on the receipt of delivery or return receipt, as applicable. Any party may change its address by notice to the other party. Each party shall make an ordinary, good faith effort to ensure that it will accept or receive notices that are given in accordance with this section and that any person to be given notice actually receives such notice. {S:BRKWD /0001 /AGR/01105431.DOCX} 10 82 13.9. Time. Time is of the essence to the performance of each and every obligation under this Agreement. 13.10. Days of Week. If any date for exercise of any right, giving of any notice, or performance of any provision of this Agreement falls on a Saturday, Sunday or holiday, the time for performance will be extended to 5:00 p.m. on the next business day. 13.11. Reasonable Consent and Approval. Except as otherwise provided in this Agreement, whenever a party is required or permitted to give its consent or approval under this Agreement, such consent or approval shall not be unreasonably withheld or delayed. If a party is required or permitted to give its consent or approval in its sole and absolute discretion or if such consent or approval may be unreasonably withheld, such consent or approval may be unreasonably withheld but shall not be unreasonably delayed. 13.12. Further Assurances. The Parties shall at their own cost and expense execute and deliver such further documents and instruments and shall take such other actions as may be reasonably required or appropriate to carry out the intent and purposes of this Agreement. 13.13. Waivers. Any waiver by any party shall be in writing and shall not be construed as a continuing waiver. No waiver will be implied from any delay or failure to take action on account of any default by any party. Consent by any party to any act or omission by another party shall not be construed to be consent to any other subsequent act or omission or to waive the requirement for consent to be obtained in any future or other instance. 13.14. Signatures /Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Any one of such completely executed counterparts shall be sufficient proof of this Agreement. 13.15. Date and Delivery of Agreement. Notwithstanding anything to the contrary contained in this Agreement, the parties intend that this Agreement shall be deemed effective, and delivered for all purposes under this Agreement, and for the calculation of any statutory time periods based on the date an agreement between parties is effective, executed, or delivered, as of the Effective Date. 13.16. Representation on Authority of Parties. Each person signing this Agreement represents and warrants that he or she is duly authorized and has legal capacity to execute and deliver this Agreement. Each party represents and warrants to the other that the execution and delivery of the Agreement and the performance of such party's obligations hereunder have been duly authorized and that the Agreement is a valid and legal agreement binding on such party and enforceable in accordance with its terms. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above. {S:BRKWD /0001 /AGR/0110543 LDOCX} 11 83 SELLER: CITY OF SOUTH SAN FRANCISCO By: Mike Futrell City Manager ATTEST: By: City Clerk APPROVED AS TO FORM: By: Jason Rosenberg City Attorney BUYER: BROOKWOOD EQUITIES LLC By: APPROVED AS TO FORM: By: Counsel for Buyer {S:BRKWD /0001 /AGR/01105431.DOCX} 12 84 Exhibit A Exhibit B Exhibit C Exhibit D Exhibit E Exhibit F {S:BRKWD /0001 /AGR/01105431.DOCX} LIST OF EXHIBITS Legal Description Grant Deed Permitted Exceptions City Note City Deed of Trust Regulatory Agreement Exhibit A LEGAL DESCRIPTION {S:BRKWD /0001 /AGR/01105431.DOCX} 14 86 Exhibit B GRANT DEED {S:BRKWD /0001 /AGR/01105431.DOCX} 15 87 Exhibit C PERMITTED EXCEPTIONS {S:BRKWD /0001 /AGR/01105431.DOCX} 16 88 Exhibit D CITY NOTE {S:BRKWD /0001 /AGR/0110543 LDOCX} 17 89 Exhibit E CITY DEED OF TRUST {S:BRKWD /0001 /AGR/01105431.DOCX} 18 90 Exhibit F REGULATORY AGREEMENT {S:BRKWD /0001 /AGR/01105431.D0CX} 19 91 DDA Exhibit C -2 Form of Agency Purchase and Sale Agreement 92 PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS ( "this Agreement") is made and entered into as of (the "Effective Date "), by and between the Successor Agency to the Redevelopment Agency of the City of South San Francisco, a public agency (referred to as "Agency ") or (the "Seller ") and Brookwood Equities LLC, ( "Buyer "), which is the date this Agreement was approved by the South San Francisco Oversight Board ( "Oversight Board "). Seller and Buyer are collectively referred to herein as the "Parties." RECITALS A. Agency is the owner of the real property located in the City of South San Francisco at 201 -219 Grand Avenue, known as San Mateo County Assessor's Parcel Nos. 012- 316 -110, 012 - 316 -100, 012 -316 -090 and 012 -316 -080 and more particularly described in Exhibit A -2 attached hereto (the "Grand- Cypress Avenue Property ") or (the "Property "). B. Buyer intends to create or has created a special purpose entity called Brookwood Cypress Venture LLC ( "BCV ") for the Grand - Cypress Avenue Property to serve as the ownership entity for the Project, defined below. For purposes of this Agreement and where the context warrants, a reference to the Buyer shall be to BCV for the Cypress Avenue Property once BCV has been formed and assumed the obligations of Buyer for such Property. C. On June 29, 2011 the legislature of the State of California (the "State ") adopted Assembly Bill xl 26 ( "AB 26 "), which amended provisions of the Redevelopment Law, which together with the California Supreme Court decision in California Redevelopment Association, et al. v. Ana Matosantos, et al., which upheld AB 26 (together with AB 1484 and SB 107, the "Dissolution Law "), the former Redevelopment Agency of the City of South San Francisco was dissolved on February 1, 2012. D. Pursuant to the Dissolution Law, the Agency has prepared a Long Range Property Management Plan ( "LRPMP "), which the Oversight Board to the Agency approved on November 19, 2013, subsequently amended on May 21, 2015, and the DOF approved on October 2, 2015. E. The LRPMP includes development plans for the Grand - Cypress Avenue Property, which are consistent with this Agreement. F. On , 2015, Buyer and Seller entered into that certain Disposition and Development Agreement (the "DDA "), pursuant to which Seller agreed to sell the Property to Buyer for construction of a mixed -use development consisting of approximately 46 multi - family residential units, at least 11 of which will be affordable to low- and moderate - income households (the "Project ") pursuant to the terms set forth therein. G. The Property is subject to the Regulatory Agreement to be concurrently recorded in the official records of San Mateo County. A copy of the Grand - Cypress Regulatory Agreement is attached hereto as Exhibit D. {S:BRKWD /0001 /AGR/01105535.DOCX} 1 93 NOW, THEREFORE, for and in consideration of the mutual covenants and agreements contained in this Agreement, and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged by the parties, Seller and Buyer hereby agree as follows: 1. INCORPORATION OF RECITALS AND EXHIBITS. The Recitals set forth above and the Exhibits attached to this Agreement are each incorporated into the body of this Agreement as if set forth in full. 2. PURCHASE AND SALE. 2.1. Agreement to Buy and Sell. Subject to the terms and conditions set forth herein, Seller agree to sell the Property to Buyer, and Buyer hereby agrees to acquire the Property from Seller. 2.2. Purchase Price. The purchase price for the Grand - Cypress Avenue Property to be paid by Buyer to Agency is Two Million Twenty Thousand Dollars ($2,020,000) ( "Purchase Price "). 2.3. Sale of Grand - Cypress Property. The Purchase Price for the Grand - Cypress Avenue Property shall be paid by execution of a promissory note by Buyer in the principal amount of Two Million Twenty Thousand Dollars ($2,020,000), with annual payments of Forty Thousand Dollars ($40,000), plus interest, commencing one (1) year after the Certificate of Completion of the Grand - Cypress Avenue Property, an interest rate of One (1%) percent and a term of thirty (30) years (the "Agency Note ") in the form attached hereto as Exhibit D. The Agency Note shall be secured by a Deed of Trust on the Grand - Cypress Avenue Property in the form attached hereto as Exhibit E (the "Agency Deed of Trust "). The Agency Note and Deed of Trust shall be subordinated to the permanent and construction financing for the Project and the City shall execute any subordination agreement, if necessary, required by the Buyer and the lender providing the permanent or construction financing for the Project. 2.4. Assignment and Assumption by Buyer Entities. For purposes of this Agreement and where the context warrants, a reference to the Buyer shall be to BCV for the Grand- Cypress Avenue Property and a reference to the Buyer shall be to BLV for the Linden Avenue Property once such entities have been formed and assumed the obligations of Buyer for such Property. Upon execution of an assignment and assumption agreement between Buyer, as assignor, and BCV, as assignee, in form and content acceptable to the Agency, Buyer shall be released from all obligations under this DDA, the Purchase and Sale Agreement, and the Agency Documents. Upon execution of an assignment and assumption agreement between Buyer, as assignor, and BLV, as assignee, in form and content acceptable to the City, Buyer shall be released from all obligations under this DDA, the Purchase and Sale Agreement, and the City Documents. ESCROW. 3.1. Escrow Account. Seller have opened an escrow account (the "Escrow ") maintained by First American Title Insurance Company (the "Escrow Holder "). Escrow Holder shall perform all escrow and title services in connection with this Agreement. {S:BRKWD /0001 /AGR/01105535.DOCX} 2 94 3.2. Opening of Escrow. Within seven (7) business days after the Effective Date, the Parties will deposit into Escrow the fully executed Agreement, or executed counterparts thereto. The date such fully executed Agreement is received by Escrow Holder will be deemed the "Opening of Escrow." 4. PROPERTY DISCLOSURE REQUIREMENTS. 4.1. Condition of Title /Preliminary Title Report. Escrow Holder has delivered a Preliminary Title Report for the Property (the "Preliminary Report ") to Buyer. Buyer has reviewed the Preliminary Report and approved all of the following exceptions to title, (the "Permitted Exceptions "): (a) standard printed exceptions in the Preliminary Report; (b) general and special real property taxes and assessments constituting a lien not yet due and payable; and (c) the "Permitted Exceptions" listed on Exhibit C attached hereto. 4.2. Environmental and Natural Hazards Disclosure. California Health & Safety Code section 25359.7 requires owners of non - residential real property who know, or have reasonable cause to believe, that any release of hazardous substances are located on or beneath the real property to provide written notice of same to the buyer of real property. Other applicable laws require Seller to provide certain disclosures regarding natural hazards affecting the Property. Seller agrees to make all necessary disclosures required by law. CLOSING AND PAYMENT OF PURCHASE PRICE. 5.1. Closing. The closing (the "Closing" or "Close of Escrow ") will occur no later than (i) thirty (30) days after the Buyer has received firm financing commitments for the financing and construction of the Project (provided Buyer has finalized and is ready to enter into the final design and construction contracts for the Project) ( "Closing Date ") or such other date as the Parties agree in writing. 5.2. Buyer's Conditions to Closing. Buyer's obligation to purchase the Property is subject to the satisfaction of all of the following conditions or Buyer's written waiver thereof (in Buyer's sole discretion) on or before the Closing Date: (a) Buyer has approved the condition of the Property. Buyer will have forty -five (45) calendar days from Opening of Escrow (the "Due Diligence Contingency Period ") to complete physical inspections of the Property and due diligence related to the purchase of the Property. Seller shall provide to Buyer copies of all reasonably available and known documents relating to the ownership and operation of the Property, including but not limited to plans, permits and reports (environmental, structural, mechanical, engineering and land surveys) that Seller have in its possession not later than two (2) business days following the execution and delivery of this Agreement. All physical inspections must be coordinated with Seller' representative. Buyer hereby agrees to indemnify and hold Seller harmless for any damage to the Property caused (but not merely revealed) by Buyer's inspections. (b) Seller have performed all obligations to be performed by Seller pursuant to the DDA and this Agreement. {S:BRKWD /0001 /AGR/01105535.DOCX} 3 95 (c) Seller' representations and warranties in the DDA and herein are true and correct in all material respects as of the Closing Date. (d) The Title Company is irrevocably committed to issue a CLTA Title Policy to Buyer, effective as of the Closing Date, insuring title to Buyer in the full amount of the Purchase Price. 5.3. Seller's Conditions to Closing. The Close of Escrow and Seller' obligation to sell and convey the Property to Buyer are subject to the satisfaction of the following conditions or Seller's written waiver (in Seller's sole discretion) of such conditions on or before the Closing Date: (a) Buyer has performed all obligations to be performed by Buyer pursuant to the DDA and this Agreement before Closing Date. (b) Buyer's representations and warranties set forth in the DDA and herein are true and correct in all material respects as of the Closing Date. 5.4. Conveyance of Title. Seller will deliver marketable fee simple title to Buyer at the Closing, subject only to the Permitted Exceptions. The Property will be conveyed by Seller to Buyer in an "as is" condition, with no warranty, express or implied, by Seller as to the physical condition including, but not limited to, the soil, its geology, or the presence of known or unknown faults or Hazardous Materials or hazardous waste (as defined by Section 12); provided, however, that the foregoing shall not relieve Seller from disclosure of any such conditions of which Seller have actual knowledge. 5.5 Deliveries at Closing. (a) Deliveries by Seller. Seller shall deposit into the Escrow for delivery to Buyer at Closing: (i) a grant deed, substantially in the form attached hereto as Exhibit B ( "Grant Deed "); (ii) an affidavit or qualifying statement which satisfies the requirements of paragraph 1445 of the Internal Revenue Code of 1986, as amended, any regulations thereunder (the "Non- Foreign Affidavit "); (iii) a California Franchise Tax Board form 590 to satisfy the requirements of California Revenue and Taxation Code Section 18805(b) and 26131, and (iv) immediately available funds to cover Seller's share of escrow fees, closing costs, and any other costs that are the responsibility of Seller under this Agreement. (b) Deliveries by Buyer. No less than one (1) business day prior to the close of escrow, Buyer shall deposit into escrow the Promissory Notes and the Deeds of Trust for the Property and immediately available funds to cover (i) the escrow fees and recording fees; and (ii) the cost of the Title Policy, and (iii) any other costs that are the responsibility of Buyer under this Agreement. (c) Closing. Upon Closing, Escrow Holder shall: (i) record the Grant Deed; (ii) deliver to Seller the Agency Note and Agency Deed of Trust; (iii) the Non - Foreign Affidavit, the California Certificate and the original recorded Grant Deed; (iv) pay any commissions and other expenses payable through escrow; and (vi) distribute to itself the payment of escrow fees and expenses required hereunder. {S:BRKWD /0001 /AGR/01105535.DOCX} 4 96 (d) Closing Costs. Buyer will pay all escrow fees (including the costs of preparing documents and instruments), and recording fees. Buyer will also pay title insurance, title report costs and all transfer taxes. Seller will pay all governmental conveyance fees, where applicable. (e) Pro - Rations. At the close of escrow, the Escrow Agent shall make the following prorations: (i) property taxes will be prorated as of the close of escrow based upon the most recent tax bill available, including any property taxes which may be assessed after the close of escrow but which pertain to the period prior to the transfer of title to the Property to Buyer, regardless of when or to whom notice thereof is delivered; and (ii) any bond or assessment that constitutes a lien on the Property at the close of escrow will be assumed by Buyer. Seller does not pay ad valorem taxes. 6. REPRESENTATIONS, WARRANTIES AND COVENANTS. 6.1. Seller' Representations, Warranties and Covenants. In addition to the representations, warranties and covenants of Seller contained in the DDA and other sections of this Agreement, Seller hereby represents, warrants and covenants to Buyer that the statements below in this Section 6.1 are each true and correct as of the Closing Date provided however, if to Seller' actual knowledge any such statement becomes untrue prior to Closing, Seller will notify Buyer in writing and Buyer will have three (3) business days thereafter to determine if Buyer wishes to proceed with Closing. If Buyer determines it does not wish to proceed, then the terms of Section 8.2 will apply. (a) Authority. Seller is a public agency, lawfully formed, in existence and in good standing under the laws of the State of California. Seller has the full right, capacity, power and authority to enter into and carry out the terms of this Agreement. This Agreement has been duly executed by Seller, and upon delivery to and execution by Buyer is a valid and binding agreement of Seller. (b) Encumbrances. [Other than ,] Seller has not alienated, encumbered, transferred, mortgaged, assigned, pledged, or otherwise conveyed its interest in the Property or any portion thereof, nor entered into any Agreement to do so, and there are no liens, encumbrances, mortgages, covenants, conditions, reservations, restrictions, easements or other matters affecting the Property, except as disclosed in the Preliminary Report. Seller will not, directly or indirectly, alienate, encumber, transfer, mortgage, assign, pledge, or otherwise convey its interest prior to the Close of Escrow, as long as this Agreement is in force. (c) There are no agreements affecting the Property except those which have been disclosed by Seller. There are no agreements which will be binding on the Buyer or the Property after the Close of Escrow. The truth and accuracy of each of the representations and warranties, and the performance of all covenants of Seller contained in this Agreement are conditions precedent to Buyer's obligation to proceed with the Closing hereunder. The foregoing representations and warranties shall survive the expiration, termination, or close of escrow of this Agreement and shall not be deemed merged into the deed upon closing. {S:BRKWD /0001 /AGR/01105535.DOCX} 5 97 6.2. Buyer's Representations and Warranties. In addition to the representations, warranties and covenants of Buyer contained in the DDA and other sections of this Agreement, Buyer hereby represents, warrants and covenants to Seller that the statements below in this Section 6.2 are each true as of the Effective Date, and, if to Buyer's actual knowledge any such statement becomes untrue prior to Closing, Buyer shall so notify Seller in writing and Seller shall have at least three (3) business days thereafter to determine if Seller wishes to proceed with Closing. (a) Buyer is an individual investor or entity. Buyer has the full right, capacity, power and authority to enter into and carry out the terms of this Agreement. This Agreement has been duly executed by Buyer, and upon delivery to and execution by Seller shall be a valid and binding agreement of Buyer. (b) Buyer is not bankrupt or insolvent under any applicable federal or state standard, has not filed for protection or relief under any applicable bankruptcy or creditor protection statute, and has not been threatened by creditors with an involuntary application of any applicable bankruptcy or creditor protection statute. The truth and accuracy of each of the representations and warranties, and the performance of all covenants of Buyer contained in this Agreement are conditions precedent to Seller' obligation to proceed with the Closing hereunder. 7. DEFAULT, REMEDIES, TERMINATION. Either Party shall be in default of this Agreement ( "Default ") if such Party 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, unless a different time period is specified herein, after written notice thereof from the non - defaulting Party to the defaulting Party, or in the case of a Default that cannot with due diligence be cured within thirty (30) days or other time specified for herein, the defaulting Party fails to prosecute the curing of such Default with due diligence and in good faith to completion. Either Party shall have the right to terminate this Agreement upon a Default and expiration of any applicable cure period, and in accordance with the terms of this Agreement, in addition to pursuing all remedies available under law or equity. Except as otherwise provided herein, the rights and remedies of the Parties shall be cumulative; provided, however, that neither Party shall have a right to recover consequential or punitive damages. 8. BROKERS. Seller represents that no real estate broker has been retained by Seller in the sale of the Property or the negotiation of this Agreement. Buyer represents that no real estate broker has been retained by Buyer in the procurement of the Property or negotiation of this Agreement. Buyer shall indemnify, hold harmless and defend Seller from any and all claims, actions and liability for any breach of the preceding sentence, and any commission, finder's fee, or similar charges arising out of Buyer's conduct. 9. ASSIGNMENT. Absent an express signed written agreement between the Parties to the contrary, neither Seller nor Buyer may assign its rights or delegate its duties under this Agreement without the express written consent of the other, which consent may be withheld for any reason. No permitted assignment of any of the rights or obligations under this Agreement {S:BRKWD /0001 /AGR/01105535.DOCX} 6 98 shall result in a novation or in any other way release the assignor from its obligations under this Agreement. 10. ENVIRONMENTAL INDEMNITY. To the fullest extent allowed by law, Buyer agrees to unconditionally and fully indemnify, protect, defend (with counsel satisfactory to Seller), and hold Seller, and their respective elected and appointed officers, officials, employees, agents, consultants and contractors harmless from and against any and all claims (including without limitation third party claims for personal injury, real or personal property damage, or damages to natural resources), actions, administrative proceedings (including without limitation both formal and informal proceedings), judgments, damages, punitive damages, penalties, fines, costs (including without limitation any and all costs relating to investigation, assessment, analysis or clean -up of the Property), liabilities (including without limitation sums paid in settlements of claims), interest, or losses, including reasonable attorneys' and paralegals' fees and expenses (including without limitation any such fees and expenses incurred in enforcing this Agreement or collecting any sums due hereunder), together with all other costs and expenses of any kind or nature (collectively, the "Costs ") that arise directly or indirectly from or in connection with the presence, suspected presence, release, or suspected release, of any Hazardous Materials in, on or under the Property or in or into the air, soil, soil gas, groundwater, or surface water at, on, about, around, above, under or within the Property, or any portion thereof, except those Costs that arise solely as a result of actions by Seller or actions by the City. The indemnification provided pursuant to this Section shall specifically apply to and include claims or actions brought by or on behalf of employees of Buyer or any of its predecessors in interest and Buyer hereby expressly waives any immunity to which Buyer may otherwise be entitled under any industrial or worker's compensation laws. In the event the Seller suffers or incurs any Costs, Buyer shall pay to Seller the total of all such Costs suffered or incurred by the Seller upon demand therefore by Seller. The indemnification provided pursuant to this Section shall include, without limitation, all loss or damage sustained by the Seller due to any Hazardous Materials: (a) that are present or suspected by a governmental agency having jurisdiction to be present in the Property or in the air, soil, soil gas, groundwater, or surface water at, on, about, above, under, or within the Property (or any portion thereof) or to have emanated from the Property, or (b) that migrate, flow, percolate, diffuse, or in any way move onto, into, or under the air, soil, soil gas, groundwater, or surface water at, on, about, around, above, under, or within the Property (or any portion thereof) after the date of this Agreement as a result of Seller' or its predecessors' activities on the Property. The provisions of this Section 10 shall survive the termination of this Agreement and the Close of Escrow. 11. RELEASE BY BUYER. Effective upon the Close of Escrow, and subject to Seller' representations under this Agreement and the DDA and any obligations arising under such agreements or applicable law, Buyer waives releases, remises, acquits and forever discharges Seller, and its officers, directors, board members, managers, employees and agents, and any other person acting on behalf of Seller, from any and all claims, actions, causes of action, demands, rights, damages, costs, expenses and compensation whatsoever, direct or indirect, known or unknown, foreseen or unforeseen, which Buyer now has or which may arise in the future on account of or in any way arising from or in connection with the physical condition of the Property or any law or regulation applicable thereto including, without limiting the generality of the foregoing, any federal, state or local law, ordinance or regulation pertaining to Hazardous {S:BRKWD /0001 /AGR/01105535.DOCX} 7 99 Materials. This Section 11 shall survive the termination of this Agreement and the Close of Escrow. BUYER ACKNOWLEDGES THAT BUYER IS FAMILIAR WITH SECTION 1542 OF THE CALIFORNIA CIVIL CODE, WHICH PROVIDES AS FOLLOWS: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. BY INITIALING BELOW, BUYER EXPRESSLY WAIVES THE BENEFITS OF SECTION 1542 OF THE CALIFORNIA CIVIL CODE WITH RESPECT TO THE FOREGOING RELEASE: Buyer's initials: 12. HAZARDOUS MATERIALS, DEFINITIONS. 12.1. Hazardous Materials. As used in this Agreement, "Hazardous Materials" means any chemical, compound, material, mixture, or substance that is now or may in the future be defined or listed in, or otherwise classified pursuant to any Environmental Laws (defined below) as a "hazardous substance ", "hazardous material ", "hazardous waste ", "extremely hazardous waste ", infectious waste ", toxic substance ", toxic pollutant ", or any other formulation intended to define, list or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, or toxicity. The term "Hazardous Materials" shall also include asbestos or asbestos - containing materials, radon, chrome and /or chromium, polychlorinated biphenyls, petroleum, petroleum products or by- products, petroleum components, oil, mineral spirits, natural gas, natural gas liquids, liquefied natural gas, and synthetic gas usable as fuel, perchlorate, and methyl tert butyl ether, whether or not defined as a hazardous waste or hazardous substance in the Environmental Laws. 12.2. Environmental Laws. As used in this Agreement, "Environmental Laws" means any and all federal, state and local statutes, ordinances, orders, rules, regulations, guidance documents, judgments, governmental authorizations or directives, or any other requirements of governmental authorities, as may presently exist, or as may be amended or supplemented, or hereafter enacted, relating to the presence, release, generation, use, handling, treatment, storage, transportation or disposal of Hazardous Materials, or the protection of the environment or human, plant or animal health, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C. § 9601), the Hazardous Materials Transportation Act (49 U.S.C. § 1801 el seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. § 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), the Oil Pollution Act (33 U.S.C. § 2701 et seq.), the Emergency {S:BRKWD /0001 /AGR/01105535.DOCX} 8 100 Planning and Community Right -to -Know Act (42 U.S.C. § 11001 et seq.), the Porter - Cologne Water Quality Control Act (Cal. Water Code § 13000 et seq.), the Toxic Mold Protection Act (Cal. Health & Safety Code § 26100, et seq.), the Safe Drinking Water and Toxic Enforcement Act of 1986 (Cal. Health & Safety Code § 25249.5 et seq.), the Hazardous Waste Control Act (Cal. Health & Safety Code § 25100 et seq.), the Hazardous Materials Release Response Plans & Inventory Act (Cal. Health & Safety Code § 25500 et seq.), and the Carpenter - Presley- Tanner Hazardous Substances Account Act (Cal. Health and Safety Code, Section 25300 et seq.). 13. MISCELLANEOUS. 13.1. Attorneys' Fees. If any party employs counsel to enforce or interpret this Agreement, including the commencement of any legal proceeding whatsoever (including insolvency, bankruptcy, arbitration, mediation, declaratory relief or other litigation), the prevailing party shall be entitled to recover its reasonable attorneys' fees and court costs (including the service of process, filing fees, court and court reporter costs, investigative fees, expert witness fees, and the costs of any bonds, whether taxable or not) and shall include the right to recover such fees and costs incurred in any appeal or efforts to collect or otherwise enforce any judgment in its favor in addition to any other remedy it may obtain or be awarded. Any judgment or final order issued in any legal proceeding shall include reimbursement for all such attorneys' fees and costs. In any legal proceeding, the "prevailing party" shall mean the party determined by the court to most nearly prevail and not necessarily the party in whose favor a judgment is rendered. 13.2. Interpretation. This Agreement has been negotiated at arm's length and each party has been represented by independent legal counsel in this transaction and this Agreement has been reviewed and revised by counsel to each of the Parties. Accordingly, each party hereby waives any benefit under any rule of law (including Section 1654 of the California Civil Code) or legal decision that would require interpretation of any ambiguities in this Agreement against the drafting party. 13.3. Survival. All indemnities, covenants, representations and warranties contained in this Agreement shall survive Close of Escrow. 13.4. Successors. Except as provided to the contrary in this Agreement, this Agreement shall be binding on and inure to the benefit of the Parties and their successors and assigns. 13.5. Governing g Law. This Agreement shall be construLaw. This Agreement shall be construed and interpreted in accordance with the laws of the State of California. 13.6. Integrated Agreement, Modifications. This Agreement contains all the agreements of the Parties concerning the subject hereof any cannot be amended or modified except by a written instrument executed and delivered by the parties. There are no representations, agreements, arrangements or understandings, either oral or written, between or among the parties hereto relating to the subject matter of this Agreement that are not fully expressed herein. In addition there are no representations, agreements, arrangements or {S:BRKWD /0001 /AGR/01105535.DOCX} 9 101 understandings, either oral or written, between or among the Parties upon which any party is relying upon in entering this Agreement that are not fully expressed herein. 13.7. Severability. If any term or provision of this Agreement is determined to be illegal, unenforceable, or invalid in whole or in part for any reason, such illegal, unenforceable, or invalid provisions or part thereof shall be stricken from this Agreement, any such provision shall not be affected by the legality, enforceability, or validity of the remainder of this Agreement. If any provision or part thereof of this Agreement is stricken in accordance with the provisions of this Section, then the stricken provision shall be replaced, to the extent possible, with a legal, enforceable and valid provision this is in keeping with the intent of the Parties as expressed herein. 13.8. Notices. Any delivery of this Agreement, notice, modification of this Agreement, collateral or additional agreement, demand, disclosure, request, consent, approval, waiver, declaration or other communication that either party desires or is required to give to the other party or any other person shall be in writing. Any such communication may be served personally, or by nationally recognized overnight delivery service (i.e., Federal Express) which provides a receipt of delivery, or sent by prepaid, first class mail, return receipt requested to the party's address as set forth below: To Buyer: Brookwood Equities LLC One Embarcadero Center, Suite 500 San Francisco, CA 94111 Tel: (415) 402 -0800 Fax: (415) 399 -9367 with a copy to: Leland, Parachini, Steinberg, Matzger & Melnick, LLP Attn: Nina P. Kwan 199 Fremont Street, 21s' Mr. San Francisco, CA 94105 Tel: (415) 957 -1800 Fax: (415) 974 -1520 To Seller: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: City Manager Tel (650) 877 -8501 Fax (650) 829 -6609 with a copy to: Meyers Nave Attn: Steve Mattas 575 Market Street, Suite 2080 San Francisco, CA 94105 Tel (415) 421 -3711 Fax (415) 421 -3767 {S:BRKWD /0001 /AGR/01105535.DOCX} 10 102 If to Escrow Holder: First American Title Insurance Attn: Marc Bonfigh 101 Mission Street, Suite 1600 San Francisco, CA 94105 Tel (415) 837 -2235 Fax (714) 481 -4597 Any such communication shall be deemed effective upon personal delivery or on the date of first refusal to accept delivery as reflected on the receipt of delivery or return receipt, as applicable. Any party may change its address by notice to the other party. Each party shall make an ordinary, good faith effort to ensure that it will accept or receive notices that are given in accordance with this section and that any person to be given notice actually receives such notice. 13.9. Time. Time is of the essence to the performance of each and every obligation under this Agreement. 13.10. Days of Week. If any date for exercise of any right, giving of any notice, or performance of any provision of this Agreement falls on a Saturday, Sunday or holiday, the time for performance will be extended to 5:00 p.m. on the next business day. 13.11. Reasonable Consent and Approval. Except as otherwise provided in this Agreement, whenever a party is required or permitted to give its consent or approval under this Agreement, such consent or approval shall not be unreasonably withheld or delayed. If a party is required or permitted to give its consent or approval in its sole and absolute discretion or if such consent or approval may be unreasonably withheld, such consent or approval may be unreasonably withheld but shall not be unreasonably delayed. 13.12. Further Assurances. The Parties shall at their own cost and expense execute and deliver such further documents and instruments and shall take such other actions as may be reasonably required or appropriate to carry out the intent and purposes of this Agreement. 13.13. Waivers. Any waiver by any party shall be in writing and shall not be construed as a continuing waiver. No waiver will be implied from any delay or failure to take action on account of any default by any party. Consent by any party to any act or omission by another party shall not be construed to be consent to any other subsequent act or omission or to waive the requirement for consent to be obtained in any future or other instance. 13.14. Signatures /Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Any one of such completely executed counterparts shall be sufficient proof of this Agreement. 13.15. Date and Delivery of Agreement. Notwithstanding anything to the contrary contained in this Agreement, the parties intend that this Agreement shall be deemed {S:BRKWD /0001 /AGR/01105535.DOCX} 11 103 effective, and delivered for all purposes under this Agreement, and for the calculation of any statutory time periods based on the date an agreement between parties is effective, executed, or delivered, as of the Effective Date. 13.16. Representation on Authority of Parties. Each person signing this Agreement represents and warrants that he or she is duly authorized and has legal capacity to execute and deliver this Agreement. Each party represents and warrants to the other that the execution and delivery of the Agreement and the performance of such party's obligations hereunder have been duly authorized and that the Agreement is a valid and legal agreement binding on such party and enforceable in accordance with its terms. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above. SELLER: SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO By: Mike Futrell Executive Director ATTEST: By: Agency Clerk APPROVED AS TO FORM: By: Jason Rosenberg Agency Counsel BUYER: BROOKWOOD EQUITIES LLC By: APPROVED AS TO FORM: By: Counsel for Buyer {S:BRKWD /0001 /AGR/01105535.DOCX} 12 104 Exhibit A Exhibit B Exhibit C Exhibit D Exhibit E Exhibit F {S:BRKWD /0001 /AGR/01105535.DOCX} LIST OF EXHIBITS Legal Description Grant Deed Permitted Exceptions Agency Note Agency Deed of Trust Regulatory Agreement 13 105 Exhibit A LEGAL DESCRIPTION {S:BRKWD /0001 /AGR/01105535.DOCX} 14 106 Exhibit B GRANT DEED {S:BRKWD /0001 /AGR/01105535.DOCX} 15 107 Exhibit C PERMITTED EXCEPTIONS {S:BRKWD /0001 /AGR/01105535.DOCX} 16 108 Exhibit D AGENCY NOTE {S:BRKWD /0001 /AGR/01105535.DOCX} 17 109 Exhibit E AGENCY DEED OF TRUST {S:BRKWD /0001 /AGR/01105535.DOCX} 18 110 Exhibit F REGULATORY AGREEMENT {S:BRKWD /0001 /AGR/01105535.DOCX} 19 111 DDA Exhibit D -1 Form of City Note 112 SECURED PROMISSORY NOTE (City Note) $1,388,000 South San Francisco, CA 2015 FOR VALUE RECEIVED, Brookwood Equities LLC, a Delaware limited liability company ( "Borrower "), promises to pay to the City of South San Francisco, a municipal corporation ( "City "), in lawful money of the United States of America, the principal sum of One Million Three Hundred Eighty Eight Thousand Dollars ($1,388,000), 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 a Disposition and Development Agreement dated as of , 2015 by and between Borrower, the Successor Agency to the Redevelopment Agency of the City of South San Francisco (the "Agency') and City (the "DDA ") and a Purchase and Sale Agreement of even date therewith ( "Purchase and Sale Agreement ") pursuant to which the City has agreed to provide a loan to Borrower in the amount of One Million Three Hundred Eighty Eight Thousand Dollars ($1,388,000) (the "Loan ") for the purchase of certain property owned by the City, and is subject to the terms and conditions of the DDA and Purchase and Sale 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 DDA. If there is a conflict between the terms of the DDA and the Purchase and Sale Agreement, the terms of the DDA shall prevail. 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 City and encumbering the property described therein. City shall be entitled to the benefits of the security provided by the Deed of Trust and shall have the right to enforce the covenants and agreements contained herein, in the Deed of Trust, the DDA and the Regulatory Agreement. The Regulatory Agreement shall remain effective for the full term thereof and shall survive repayment of this Note. 1. INTEREST RATE. Interest shall accrue on the outstanding principal balance of this Note at the rate of one percent (I%) simple interest per annum, commencing upon the first anniversary of the Certificate of Completion for the Linden Avenue Property. Interest shall be calculated on the basis of a year of 365 days, and charged for the actual number of days elapsed. 2. PAYMENT DATES, MATURITY DATE. Commencing upon the first anniversary of the Certificate of Completion, as defined in the Grant Deed, for the property described herein, and on each anniversary thereafter, Borrower shall make annual payments of Twenty -Seven Thousand Seven Hundred Fifty Dollars ($27,750) until the entire indebtedness evidenced hereby is fully paid, except that all remaining indebtedness, if not sooner paid, shall be due and payable upon the Maturity Date (defined below). The entire outstanding principal balance of this Note, together with accrued interest and all other sums accrued hereunder shall be {S:BRKWD /0001 /NOTE/01105858.DOCX} 1 113 payable in full on the thirtieth (30th) anniversary of the date of this Note (the "Maturity Date "). Payments made under this Note will be applied to the principal amount outstanding in accordance with the amortization schedule attached hereto and incorporated by reference. 3. DUE ON SALE OR DEFAULT. The entire unpaid principal balance and all sums accrued hereunder and under the DDA and the City Documents shall be immediately due and payable upon the sale or Transfer (as defined in Section 8.2 of the DDA) absent City consent, of all or any part of the Linden Avenue Property or the Project as it relates to the Linden Avenue Property, or any interest therein, the conversion of the Linden Avenue Property to condominium ownership in accordance with Section 4.3 of the DDA, or upon the occurrence of an Event of Default under the DDA or the City Documents, subject to expiration of any applicable cure period. Without limiting the generality of the foregoing, except as provided in the DDA, this Note shall not be assumable without City's prior written consent, which consent may be granted or denied in City's sole discretion. 4. PREPAYMENT. Borrower may, without premium or penalty, at any time and from time to time, prepay all or any portion of the outstanding principal balance due under this Note provided that each such repayment is accompanied by accrued interest on the amount of principal prepaid calculated to the date of such repayment. Prepayment of this Note shall not affect the term of the Regulatory Agreement. Prepayments shall be applied first to principal and then to any unpaid late charges and other costs and fees then due, then to accrued but unpaid interest. 5. MANNER OF PAYMENT. All payments on this Note shall be made to City at 400 Grand Avenue, South San Francisco, CA 94080 or such other place as City shall designate to Borrower in writing, or by wire transfer of immediately available funds to an account designated by City in writing. 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 "): 6.1 Borrower fails to pay when due the principal and interest payable hereunder and such failure continues for ten (10) days after receipt of written notice from the City to Borrower. 6.2 Borrower fails to maintain insurance on the Property and the Project as required pursuant to the City Documents and Borrower fails to cure such default within 10 days after receipt of written notice from the City to Borrower. 6.3 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. 6.4 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 {S:BRKWD /0001 /NOTE/01105858.DOCX} 2 114 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 Improvements, and in each case the order or decree is not released, vacated, dismissed or fully bonded within 60 days after its issuance. 6.5 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) or prior to any sooner sale pursuant to such sequestration, attachment, or execution; 6.6 Borrower shall have voluntarily suspended its business without curing such suspension within thirty (30) days of notice from the City or applicable governing entity or Borrower shall have been dissolved or terminated; 6.7 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. 6.8 Subject to Borrower's right to contest the following charges pursuant to the City Documents, if Borrower fails to pay prior to delinquency taxes or assessments due on the Property or the Project or fails to pay when due any other charge that may result in a lien on the Property or the Project, and 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. 6.9 Any representation or warranty contained in the DDA or any application, financial statement, certificate or report furnished in connection with the Loan proves to have been false or misleading in any material adverse respect when made. 6.10 An event of default shall have been declared under any other City Document related to the Linden Avenue Property subject to the applicable cure periods set forth in such documents. 6.11 Borrower defaults in 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 City Document related to the Linden Avenue Property, 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 City shall have given written notice of the default to Borrower (or such longer time as City 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, City may, at its option (i) by written notice to Borrower, declare the entire unpaid principal balance of this {S:BRKWD /0001 /NOTE/01105858.DOCX} 3 115 Note, together with all accrued interest thereon and all sums due hereunder, immediately due and payable regardless of any prior forbearance, (ii) exercise any and all rights and remedies available to it under applicable law, and (iii) exercise any and all rights and remedies available to City under this Note and the other City Documents, including without limitation the right to pursue foreclosure under the Deed of Trust. Borrower shall pay all reasonable costs and expenses incurred by or on behalf of City including, without limitation, reasonable attorneys' fees, incurred in connection with City's enforcement of this Note and the exercise of any or all of its rights and remedies hereunder and all such sums shall be a part of the indebtedness secured by the Deed of Trust. 8. DEFAULT RATE. Upon the occurrence of an Event of Default, interest shall automatically be increased without notice to the rate of six percent (6 %) 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 Section 1 of this Note. Notwithstanding the foregoing provisions, if the interest rate charged exceeds the maximum legal rate of interest, the rate shall be the maximum rate permitted by law. The imposition or acceptance of the Default Rate shall in no event constitute a waiver of a default under this Note or prevent City from exercising any of its other rights or remedies. 9. MISCELLANEOUS 9.1 WAIVER. The rights and remedies of City under this Note shall be cumulative and not alternative. No waiver by City of any right or remedy under this Note shall be effective unless in a writing signed by City. Neither the failure nor any delay in exercising any right, power or privilege under this Note will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege by City will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege. To the maximum extent permitted by applicable law (a) no claim or right of City arising out of this Note can be discharged by City, in whole or in part, by a waiver or renunciation of the claim or right unless in a writing, signed by City; (b) no waiver that may be given by City 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 the right of City 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 12.3 of the DDA. 9.3 SEVERABIL,ITY. If any provision in this Note is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Note will remain in full force and effect. Any provision of this Note held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable. {S:BRKWD /0001 /NOTE/01105858.DOCX} 4 116 9.4 GOVERNING LAW, VENUE. This Note shall be governed by the laws of the State of California without regard to principles of conflicts of laws. 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 which the Property is located (the "Property Jurisdiction "). Borrower agrees that any controversy arising under or in relation to the Note or any other City Document shall be litigated exclusively in the Property Jurisdiction. The state and federal courts and authorities with jurisdiction in the Property Jurisdiction shall have exclusive jurisdiction over all controversies which shall arise under or in relation to this Note and any other City Document. Borrower 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. 9.5 PARTIES IN INTEREST. This Note shall bind Borrower and its successors and assigns and shall accrue to the benefit of City and its successors and assigns. 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 OF THE PARTIES. The relationship of Borrower and City under this Note is solely that of borrower and lender, and the loan evidenced by this Note and secured by the Deed of Trust will in no manner make City the partner or joint venturer of Borrower. 9.8 TIME IS OF THE ESSENCE. 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. IN WITNESS WHEREOF, Borrower has executed and delivered this Note as of the date first written above. BORROWER BROOKWOOD EQUITIES LLC, a Delaware limited liability company By: BROOKWOOD GROUP, INC., a California corporation, its Manager an Shepherd Heery Chairman and Chief Executive Officer 2551563.1 {S:BRKWD /0001 /NOTE/01105858.DOCX} 5 117 � r in Z a � Vw D � Z Q Q r °C z t7 w D QO Z � D � Z p r 0 Q O F O a D 0 m X W d 7 d S V N r O M N i+ E Q r M M J O N � rda 3 C •Y O O F E d Z R� W d d C r 3 J M Q O N ^ 0 W vMl n O mo O "1 Inam NIO N D7 � N N N NI a Ifl Ifl n N VT a N N m N m W OM1 N ^ m N m ^ N N N b N m V W b mm -o VTN N N N I N � a O O o n m N N N O O M O N N ^ N .ti ^ a n N o ti VT N n `i o o N t\ N O v � e�•I N N <D W o m m a O O m m NI m "� OI o ° vl o a O ti of 16 of VT N v � N N N VT N M O N ^ O W N N O ^ m I v^1 b a M O � O VT ti lD lD M N v � N N N VT �� N m O O N O m m NI N NI 001 M O ti M N moo� m" " V N e•I N m M NI 0 0 NI O N O1 M N e•I N GI m o m^ b NIO 0 n t°D a n N� O� O r-- N N Ifl N� m N e•I N oow ^N� NI �00 aN NI �°� r-I D7 n n N N M D O Oil vl m m N W D O to n O N ^ N m N ^ 0 N N n m ^ O VT N M N VT VT N N m N D O O m^ m N N O O m m N N O ^ to O ^ m NI NI N N N D O O° O m tD O D O- n ti O n ea•I ^ lD m N VT V m N N N D N o -m ow aomow N� �00m N °mmm m Ifl .mi m Om mm W N N N m N N �� � O I N N O m N m N M O mm o o I l N ^o�mm� N r. o n� � N ti 1D m N ai � io m m VT D7 o N N N 0 m 0 0 m m 0 W 0 t N Rio io ioN N mmaac r N N oo GI I °m N m p0 m ✓r o0 M W m � I I s N d Y O d 0 QY d m d Y d 0 QY d m � m m m �s d i d Y 0 £ s Y E lo a - d � lo lo DDA Exhibit D -2 Form of Agency Note 119 SECURED PROMISSORY NOTE (Agency Note) $2,020,000 South San Francisco, CA 2015 FOR VALUE RECEIVED, Brookwood Equities LLC, a Delaware limited liability company ( "Borrower "), promises to pay to the Successor Agency to the Redevelopment Agency of the City of South San Francisco, a municipal corporation ( "Agency "), in lawful money of the United States of America, the principal sum of Two Million Twenty Thousand Dollars ($2,020,000), 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 a Disposition and Development Agreement dated as of , 2015 by and between Borrower, the Successor Agency to the Redevelopment Agency of the City of South San Francisco (the "Agency') and City (the "DDA ") and a Purchase and Sale Agreement of even date therewith ( "Purchase and Sale Agreement ") pursuant to which the Agency has agreed to provide a loan to Borrower in the amount of Two Million Twenty Thousand Dollars ($2,020,000) (the "Loan ") for the purchase of certain property owned by the Agency, and is subject to the terms and conditions of the DDA and Purchase and Sale 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 DDA. If there is a conflict between the terms of the DDA and the Purchase and Sale Agreement, the terms of the DDA shall prevail. 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 benefits of the security provided by the Deed of Trust and shall have the right to enforce the covenants and agreements contained herein, in the Deed of Trust, the DDA and the Regulatory Agreement. The Regulatory Agreement shall remain effective for the full term thereof and shall survive repayment of this Note. 1. INTEREST RATE. Interest shall accrue on the outstanding principal balance of this Note at the rate of one percent (I%) simple interest per annum, commencing upon the first anniversary of the Certificate of Completion for the Grand - Cypress Avenue Property. Interest shall be calculated on the basis of a year of 365 days, and charged for the actual number of days elapsed. 2. PAYMENT DATES, MATURITY DATE. Commencing upon the first anniversary of the Certificate of Completion, as defined in the Grant Deed, for the property described herein, and on each anniversary thereafter, Borrower shall make annual payments of Forty Thousand Dollars ($40,000) until the entire indebtedness evidenced hereby is fully paid, except that all remaining indebtedness, if not sooner paid, shall be due and payable upon the {S:BRKWD /0001 /NOTE/01105879.DOCX} 1 120 Maturity Date (defined below). 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 made under this Note will be applied to the principal amount outstanding in accordance with the amortization schedule attached hereto and incorporated by reference. 3. DUE ON SALE OR DEFAULT. The entire unpaid principal balance and all sums accrued hereunder and under the DDA and the Agency Documents shall be immediately due and payable upon the sale or Transfer (as defined in Section 8.2 of the DDA) absent Agency consent, of all or any part of the Grand - Cypress Avenue Property or the Project as it relates to Grand - Cypress Avenue Property, or any interest therein, the conversion of the Grand - Cypress Avenue Property to condominium ownership in accordance with Section 4.3 of the DDA, or upon the occurrence of an Event of Default under the DDA or the Agency Documents, subject to expiration of any applicable cure period. Without limiting the generality of the foregoing, except as provided in the DDA, this Note shall not be assumable without Agency's prior written consent, which consent may be granted or denied in Agency's sole discretion. 4. PREPAYMENT. Borrower may, without premium or penalty, at any time and from time to time, prepay all or any portion of the outstanding principal balance due under this Note provided that each such repayment is accompanied by accrued interest on the amount of principal prepaid calculated to the date of such repayment. Prepayment of this Note shall not affect the term of the Regulatory Agreement. Prepayments shall be applied first to principal and then to any unpaid late charges and other costs and fees then due, then to accrued but unpaid interest. 5. MANNER OF PAYMENT. All payments on this Note shall be made to Agency at 400 Grand Avenue, South San Francisco, 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 "): 6.1 Borrower fails to pay when due the principal and interest payable hereunder and such failure continues for ten (10) days after receipt of written notice from the Agency to Borrower. 6.2 Borrower fails to maintain insurance on the Property and the Project as required pursuant to the Agency Documents and Borrower fails to cure such default within 10 days after receipt of written notice from the Agency to Borrower. 6.3 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. {S:BRKWD /0001 /NOTE/01105879.DOCX} 2 121 6.4 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 Improvements, and in each case the order or decree is not released, vacated, dismissed or fully bonded within 60 days after its issuance. 6.5 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) or prior to any sooner sale pursuant to such sequestration, attachment, or execution; 6.6 Borrower shall have voluntarily suspended its business without curing such suspension within thirty (30) days of notice from the Agency or applicable governing entity or Borrower shall have been dissolved or terminated; 6.7 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. 6.8 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 Project or fails to pay when due any other charge that may result in a lien on the Property or 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. 6.9 Any representation or warranty contained in the DDA or any application, financial statement, certificate or report furnished in connection with the Loan proves to have been false or misleading in any material adverse respect when made. 6.10 An event of default shall have been declared under any other Agency Document related to the Grand - Cypress Avenue Property subject to the applicable cure periods set forth in such documents. 6.11 Borrower defaults in 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 Agency Document related to the Grand - Cypress Avenue Property, 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. {S:BRKWD /0001 /NOTE/01105879.DOCX} 3 122 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 with all accrued interest thereon and all sums due hereunder, immediately due and payable regardless of any prior forbearance, (ii) exercise any and all rights and remedies available to it under applicable law, and (iii) exercise any and all rights and remedies available to Agency under this Note and the other Agency Documents, including without limitation the right to pursue foreclosure under the Deed of Trust. Borrower shall pay all reasonable costs and expenses incurred by or on behalf of Agency 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 six percent (6 %) 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 Section 1 of this Note. Notwithstanding the foregoing provisions, if the interest rate charged exceeds the maximum legal rate of interest, the rate shall be the maximum rate permitted by law. The imposition or acceptance of the Default Rate shall in no event constitute a waiver of a default under this Note or prevent 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. No 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 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 applicable 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 the 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 12.3 of the DDA. 9.3 SEVERABIL,ITY. If any provision in this Note is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Note will {S:BRKWD /0001 /NOTE/01105879.DOCX} 4 123 remain in full force and effect. Any provision of this Note held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable. 9.4 GOVERNING LAW, VENUE. This Note shall be governed by the laws of the State of California without regard to principles of conflicts of laws. 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 which the Property is located (the "Property Jurisdiction "). Borrower agrees that any controversy arising under or in relation to the Note or any other Agency Document shall be litigated exclusively in the Property Jurisdiction. The state and federal courts and authorities with jurisdiction in the Property Jurisdiction shall have exclusive jurisdiction over all controversies which shall arise under or in relation to this Note and any other Agency Document. Borrower 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. 9.5 PARTIES IN INTEREST. 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 OF 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 ESSENCE. 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. IN WITNESS WHEREOF, Borrower has executed and delivered this Note as of the date first written above. BORROWER BROOKWOOD EQUITIES LLC, a Delaware limited liability company By: BROOKWOOD GROUP, INC., a California corporation, its Manager Shepherd Heery Chairman and Chief Executive Officer 2554807.1 {S:BRKWD /0001 /NOTE/01105879.DOCX} 5 124 .n r in Z a � uw o � Z Q Q r °C z t7 w p � Q Q Z � p � Z p r p Q O r O a D fV 0 m X W d 3 d t V N r O m N i+ E Q r m J r m J N W a } V d s� Z O O NI0000 O O O G NI 0000 O O O G o o ti l vi O o m o o N N N N N N o o o o O m, o 0 o o o o O m N o o N o o O o - lOD N N N N^ N N N N m N N N O O ON O O ON NI O N NI 00 N m O D Oo N O M �o�oo N N N N o M N N O ON a0000 O` ON NI O H N OI c N o °� ti'-'ri o °�m� v � ri N ri N O W W OI O W W NI c o Go 0 0w ti vi do m � mm v � ri N ri N O O NI O O O o NI O O O G O O ON o ^ I O W N N O W NI O l00 I NI O l Go N `° `^ ✓, °NO O `^ ,m O O ON N N O O ON NI O N OI c N Doti ^n o o n o ON N N O O NI o N NI o N O O ti O O O O r-i M m O m m N N O W W NI o NI c Go O ^y ti N O m `i m N O N O N oo NI O O O G NI O O O G O ON o6 m VT VT Vf O ti O N VT W m N m N N N N 0 0 0 0 O m 0 tD 0 0 0 0 0 O W o o N l00 D ^NO O o6 lD O n O N W VT VT O1 N N N V1 O O ON N N O O O NI O N NI o N O O Oil m o W O O m- mm, Vf VT VT N m N N N N h ON N N O O NI o o N NI c N O O Oil Ol Of O O ti N N �ry �m.n .miim �m.n � N O O O O N o M N O O O O o N 000�o�� N o0 o�o�Go O W m m N Ol VT VT m � m VT N � N o N oo lo O o N O N N N o O N G N N d N d d d M O O d Y C d O Q q d d Y q d O Q d • d N L d C W ca C fL v � 3 O R 3 yi C m �s R 3 m �s O F £ d d £ d d Q ¢ m a d d g J q 3 V q J q 3 V p M Q C C 3 Q V Q V 0 r C C 3 0 Q V Q V r d s� Z DDA Exhibit E -1 Form of City Deed of Trust 126 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: City Manager EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE §§6103,27383 Space above this line for Recorder's use DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (CITY DEED OF TRUST) THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING ( "Deed of Trust ") is made as of , 2015, by Brookwood Equities LLC, a Delaware limited liability company ( "Trustor ") to Title Company as trustee ( "Trustee "), for the benefit of the City of South San Francisco, a municipal corporation (`Beneficiary "). RECITALS A. Trustor owns or will own fee simple title to the land located at 418 Linden Avenue, known as San Mateo County Assessor's Parcel Nos. 012 - 314 -010 and more particularly described in Exhibit A attached hereto and incorporated herein by this reference (the "Land "). Trustor intends to construct, own and operate a mixed -use, multifamily residential development on the Land (the "Project "). B. Beneficiary, Trustor and the Successor Agency to the Redevelopment Agency of the City of South San Francisco ( "Agency ") have entered into a Disposition and Development Agreement dated as of , 2015 (the "DDA ") and a Purchase and Sale Agreement of even date therewith (the "Purchase and Sale Agreement ") pursuant to which Beneficiary will provide a loan to Trustor in the amount of One Million Three Hundred Eighty Eight Thousand Dollars ($1,388,000) for purchase of the Land ( "Loan "). Trustor has issued to Beneficiary a secured promissory note dated as of the date hereof in the amount of the Loan to evidence Trustor's obligation to repay the Loan ( "Note "). A Memorandum of the DDA 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 DDA and under the Loan Document (defined below). {S:BRKWD /0001 /DED /01100666.DOCX {S:BRKWD /0001 /DED /01106470.DOCX} 1 127 NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed as follows. 1. Grant in Trust. In consideration of the foregoing and for the purpose of securing payment and performance of the Secured Obligations defined and described in Section 2, Trustor hereby irrevocably and unconditionally grants, conveys, transfers and assigns to Trustee, in trust for the 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, equipment, fixtures, goods and other personal property of the Trustor, whether moveable or not, now owned or hereafter acquired by the Trustor and now or hereafter located at or used in connection with the Land, the Improvements or Appurtenances, and all improvements, restorations, replacements, repairs, additions or substitutions thereto (collectively, "Equipment"); (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 "); {S:BRKWD /0001 /DED /01106470.DOCX} 2 {S:BRKWD /0001 /DED /01100666.DOCX 128 (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, "Plans "); and (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, Proceeds, Gross Revenues, Plans and Financing as hereby conveyed to Trustee or made subject to the security interest herein described are collectively referred to herein as the "Property." 2. Obligations Secured. This Deed of Trust is given for the purpose of securing payment and performance of the following (collectively, the "Secured Obligations "): (i) all present and future indebtedness evidenced by the Note and any amendment thereof, including principal, interest and all other amounts payable under the terms of the Note; (ii) all present and future obligations of Trustor to Beneficiary under the Loan 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 by new or additional documents; and (v) reimbursement of all amounts advanced by or on behalf of Beneficiary to protect Beneficiary's interests under this Deed of Trust or any other Loan Document as such may be modified, supplemented, amended, renewed or extended. The Note, the DDA, 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, Agency 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. Upon the occurrence of any such Event of Default, Beneficiary may terminate such license without notice to or demand upon Trustor and without regard to the adequacy of any security for the indebtedness hereby secured, and may either in person, by agent, or by a receiver to be appointed by a court, enter upon and take possession of the Property or any part thereof, and sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorneys' fees, to any indebtedness secured hereby, and in such order as Beneficiary may determine. Beneficiary's right to the rents, royalties, issues, profits, revenue, income and proceeds of the Property does not depend upon whether or not Beneficiary takes possession of the Property. The entering upon and taking possession of the Property, the collection of such rents, issues, and profits, and the application thereof as aforesaid, shall not {S:BRKWD /0001 /DED /01100666.DOCX {S:BRKWD /0001 /DED /01106470.DOCX} 3 129 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 right and remedy afforded any of them under this Deed of Trust and at law or in equity, including the right to exercise the power of sale granted hereunder. Regardless of whether or not Beneficiary, in person or by agent, takes actual possession of the Land or the Improvements, Beneficiary shall not be deemed to be a "mortgagee in possession," shall not be responsible for performing any obligation of Trustor under any Lease, shall not be liable in any manner for the Property, or the use, occupancy, enjoyment or operation of any part of it, and shall not be responsible for any waste committed by Trustor, lessees or any third parties, or for dangerous or defective condition of the Property or any negligence in the management, repair or control of the Property. Absent Beneficiary's written consent, Trustor shall not accept prepayment of Rents for any rental period exceeding one month. 4. Security Agreement. The parties intend for this Deed of Trust to create a lien on the Property, and an absolute assignment of the Rents and Leases, all in favor of Beneficiary. The parties acknowledge that some of the Property may be determined under applicable law to be personal property or fixtures. To the extent that any Property may be or be determined to be personal property, Trustor as debtor hereby grants to Beneficiary as secured party a security interest in all such Property to secure payment and performance of the Secured Obligations. This Deed of Trust constitutes a security agreement under the California Uniform Commercial Code, as amended or recodified from time to time (the "UCC "), covering all such Property. To the extent such Property is not real property encumbered by the lien granted above, and is not absolutely assigned by the assignment set forth above, it is the intention of the parties that such Property shall constitute "proceeds, products, offspring, rents, or profits" (as defined in and for the purposes of Section 552(b) of the United States Bankruptcy Code, as such section may be modified or supplemented) of the Land and Improvements. 5. Financing Statements. Pursuant to the UCC, Trustor, as debtor, hereby authorizes Beneficiary, as secured party, to file such financing statements and amendments thereof and such continuation statements with respect thereto as Beneficiary may deem appropriate to perfect and preserve Beneficiary's security interest in the Property and Rents, without requiring any signature or further authorization by Trustor. If requested by Beneficiary, Trustor shall pay all fees and costs that Beneficiary may incur in filing such documents in public offices and in obtaining such record searches as Beneficiary may reasonably require. If any financing statement or other document is filed in the records normally pertaining to personal property, that filing shall not be construed as in any way derogating from or impairing this Deed of Trust or the rights or obligations of the parties under it. Everything used in connection with the Property and /or adapted for use therein and /or which is described or reflected in this Deed of Trust is, and at all times and for all purposes and in all proceedings both legal or equitable shall be regarded as part of the estate encumbered by this Deed of Trust irrespective of whether (i) any such item is physically attached to the Improvements, (ii) serial numbers are used for the better identification of certain equipment items capable of being thus identified in a recital contained herein or in any list filed with Beneficiary, or (iii) any such item is referred to or reflected in any such financing statement so {S:BRKWD /0001 /DED /01100666.DOCX {S:BRKWD /0001 /DED /01106470.DOCX} 4 130 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 lessening of value, or (3) Trustor's interest as lessor in any present or future lease or rights to income growing out of the use and /or occupancy of the property conveyed hereby, whether pursuant to lease or otherwise, shall not be construed as in any way altering any of the rights of Beneficiary as determined by this instrument or impugning the priority of Beneficiary's lien granted hereby or by any other recorded document. Such mention in any financing statement is declared to be solely for the protection of Beneficiary in the event any court or judge shall at any time hold, with respect to the matters set forth in the foregoing clauses (1), (2), and (3), that notice of Beneficiary's priority of interest is required in order to be effective against a particular class of persons, including but not limited to the federal government and any subdivisions or entity of the federal government. 6. Fixture Filing. This Deed of Trust is intended to be and constitutes a fixture filing pursuant to the provisions of the UCC with respect to all of the Property constituting fixtures, is being recorded as a fixture financing statement and filing under the UCC, and covers property, goods and equipment which are or are to become fixtures related to the Land and the Improvements. Trustor covenants and agrees that this Deed of Trust is to be filed in the real estate records of 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 accounts subject to the UCC, as amended. Trustor shall be deemed to be the "debtor" and Beneficiary shall be deemed to be the "secured party" for all purposes under the UCC. 7. Trustor's Representations, Warranties and Covenants, Rights and Duties of the Parties. 7.1 Representations and Warranties. Trustor represents and warrants that: (i) Trustor lawfully possesses and holds 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 and unlimited power, right and authority to encumber the Property and assign the Rents; (iv) subject only to encumbrances of record and senior liens permitted pursuant to the 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. Beneficiary agrees that it will not withhold consent to reasonable requests for subordination of this Deed of Trust to deeds of trust provided for the benefit of lenders identified in the Financing Plan approved in connection with the DDA provided that the subordination agreement includes reasonable protections to the Beneficiary in the event of default. 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 {S:BRKWD /0001 /DED /01100666.DOCX {S:BRKWD /0001 /DED /01106470.DOCX} 5 131 code violation or violation of other governmental regulations concerning the Property that has not previously been corrected, and to Trustor's best knowledge, no condition on the Land violates any health, safety, fire, environmental, sewage, building, or other federal, state or local law, ordinance or regulation; (ii) no contracts, licenses, leases or commitments regarding the maintenance or use of the Property or allowing any third party rights to use the Property are in force; (iii) there are no threatened or pending actions, suits, or administrative proceedings against or affecting the Property or any portion thereof or the interest of Trustor in the Property; (iv) there are no threatened or pending condemnation, eminent domain, or similar proceedings affecting the Property or any portion thereof, (v) Trustor has not received any notice from any insurer of defects of the Property which have not been corrected; (vi) to Trustor's best knowledge 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 Performance of Secured Obligations. Trustor shall promptly pay when due the principal and any interest due on the indebtedness evidenced by the Note, and shall promptly pay and perform all other obligations of Trustor arising in connection with the Secured Obligations or the Loan Documents in accordance with the respective terms thereof. 7.5 Use of Loan Proceeds, Preservation and Maintenance of Property, Compliance with Laws. Trustor covenants that it shall use the proceeds of the Loan 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 and local laws, regulations, ordinances and rules applicable to the Property and the Project, including without limitation all applicable requirements of state and local building codes and regulations, and all applicable statutes and regulations relating to accessibility for the disabled. Trustor shall not remove, demolish or materially alter any Improvement without Beneficiary's consent, shall complete or restore promptly and in good and workmanlike manner any building, fixture or other improvement which may be constructed, damaged, or destroyed thereon, and shall pay when due all claims for labor performed and materials furnished therefor. Trustor shall use the Land and 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 {S:BRKWD /0001 /DED /01100666.DOCX {S:BRKWD /0001 /DED /01106470.DOCX} 6 132 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 DDA) 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 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 proceeds of the Loan 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, Taxes and Assessments. Trustor shall pay before delinquency all taxes, levies, assessments and other charges affecting the Property that are (or if not paid may become) a lien on all or part of the Property. Trustor may, at Trustor's expense, contest the validity or application of any tax, levy, assessment or charge affecting the Property by appropriate legal proceedings promptly initiated and conducted in good faith and with due diligence, provided that (i) Beneficiary is reasonably satisfied that neither the Property nor any part thereof or interest therein will be in danger of being sold, forfeited, or lost as a result of such contest, and (ii) Trustor shall have posted a bond or furnished other security as may reasonably be required from time to time by Beneficiary; and provided further that Trustor shall timely make any payment necessary to prevent a lien foreclosure, sale, forfeiture or loss of the Property. 7.9 Subrogation. Beneficiary shall be subrogated to the liens of all encumbrances, whether released of record or not, which are discharged in whole or in part by Beneficiary in accordance with this Deed of Trust. 7.10 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 {S:BRKWD /0001 /DED /01100666.DOCX {S:BRKWD /0001 /DED /01106470.DOCX} 7 133 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 of default hereunder or invalidate any act done pursuant to such notice. Notwithstanding anything 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 City 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 Beneficiary as an additional insured. Trustor shall maintain workers' compensation insurance as required by law. 7.10.2 Trustor shall file 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 policies) 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 in coverage under each such policy. 7.10.3 If any insurance 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 to 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. {S:BRKWD /0001 /DED /01100666.DOCX {S:BRKWD /0001 /DED /01106470.DOCX} 8 134 7.11 Hazardous Materials. Trustor represents and warrants that except as disclosed to Beneficiary in writing, as of the date hereof to the best knowledge of Trustor: (i) the Land is free and has always been free of Hazardous Materials (as defined below) and is not and has never been in violation of any Environmental Law (as defined below); (ii) there are no buried or partially buried storage tanks located on the Land; (iii) Trustor has received no notice, warning, notice of violation, administrative complaint, judicial complaint, or other formal or informal notice alleging that conditions on the Land are or have ever been in violation of any Environmental Law or informing Trustor that the Land is subject to investigation or inquiry regarding Hazardous Materials on the Land or the potential violation of any Environmental Law; (iv) there is no monitoring program required by the Environmental Protection Agency or any other governmental agency concerning the Land; (v) no toxic or hazardous chemicals, waste, or substances of any kind have ever been spilled, disposed of, or stored on, under or at the Land, whether by accident, burying, drainage, or storage in containers, tanks, holding areas, or any other means; (vi) the Land has never been used as a dump or landfill; and (vii) Trustor has disclosed to Beneficiary all information, records, and studies in Trustor's possession or reasonably available to Trustor relating to the Land concerning Hazardous Materials. Trustor shall not cause or permit any Hazardous Material (as defined 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 residential developments and in compliance with all applicable laws, and shall not cause any release of Hazardous Materials into, onto, under or through the Land. If any Hazardous Material is discharged, released, dumped, or spilled in, on, under, or about the Land and results in any contamination of the Land or adjacent property, or otherwise results in the release or discharge of Hazardous Materials in, on, under or from the Land, Trustor shall promptly take all actions at its sole expense as are necessary to comply with all Environmental Laws (as defined below). To the fullest extent permitted by law, Trustor shall indemnify, defend (with counsel reasonably acceptable to Beneficiary), and hold Beneficiary and its elected and appointed officials, officers, agents and employees (collectively, "Indemnitees ") harmless from and against any and all loss, claim, liability, damage, demand, judgment, order, penalty, fine, injunctive or other relief, cost, expense (including reasonable fees and expenses of attorneys, expert witnesses, and other professionals advising or assisting Beneficiary), action, or cause of action (all of the foregoing, hereafter individually "Claim" and collectively "Claims ") arising in connection with the breach of Trustor's covenants and obligations set forth in this Section 7.11 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 disposal of Hazardous Materials, all costs of determining whether the Land is in compliance with Environmental Laws, all costs associated with bringing the Land into compliance with all applicable Environmental Laws, and all costs associated with claims for damages or injury to persons, property, or natural resources. Without limiting the generality of the foregoing, Trustor shall, at Trustor's own cost and expense, do all of the following: {S:BRKWD /0001 /DED /01100666.DOCX {S:BRKWD /0001 /DED /01106470.DOCX} 9 135 a. pay or satisfy any judgment or decree that may be entered against any Indemnitee or Indemnitees in any legal or administrative proceeding incident to any matters against which Indemnitees are entitled to be indemnified under this Deed of Trust; b. reimburse Indemnitees for any expenses paid or incurred in connection with any matters against which Indemnitees are entitled to be indemnified under this Deed of Trust; and C. reimburse Indemnitees for any and all expenses, including without limitation 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 of 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 Section 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 736(f)(2) of the California Code of Civil Procedure) made by Trustor relating to real property security (the "Environmental Provisions "), and that Trustor's failure to comply with any of the Environmental Provisions will be a breach of contract that will entitle Beneficiary to pursue the remedies provided by Section 736 of the California Code of Civil Procedure ( "Section 736 ") for the recovery of damages and for the enforcement of the Environmental Provisions. Pursuant to Section 736, Beneficiary's action for recovery of damages or enforcement of the Environmental Provisions shall not constitute an action within the meaning of Section 726(a) of the California Code of Civil Procedure or constitute a money judgment for a deficiency or a deficiency judgment within the meaning of Sections 580a, 580b, 5804, or 726(b) of the California Code of Civil Procedure. {S:BRKWD /0001 /DED /01100666.DOCX {S:BRKWD /0001 /DED /01106470.DOCX} 10 136 "Hazardous Materials" means any substance, material or waste which is or becomes regulated by any federal, state or local governmental authority, and includes without limitation (i) petroleum or oil or gas or any direct or indirect product or by- product thereof, (ii) asbestos and any material containing asbestos; (iii) any substance, material or waste regulated by or listed (directly or by reference) as a "hazardous substance ", "hazardous material ", "hazardous waste ", "toxic waste ", "toxic pollutant ", "toxic substance ", "solid waste" or "pollutant or contaminant" in or pursuant to, or similarly identified as hazardous to human health or the environment in or pursuant to, the Toxic Substances Control Act [15 U.S.C. Section 2601, et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, el 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 - 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 operating authorizations regulating, or relating to, or imposing liability or standards of conduct concerning (i) pollution or protection of the environment, including natural resources; (ii) exposure of persons, including employees and agents, to any Hazardous Material (as defined above) or other products, raw materials, chemicals or other substances; (iii) protection of the public health or welfare from the effects of by- products, wastes, emissions, discharges or releases of chemical substances from industrial or commercial activities; (iv) the manufacture, use or introduction into commerce of chemical substances, including without limitation, their manufacture, formulation, labeling, distribution, transportation, handling, storage and disposal; or (iv) the use, release or disposal of toxic or hazardous substances or Hazardous Materials or the remediation of air, surface waters, groundwaters or soil, as now or may at any later time be in effect, including but not limited to the Toxic Substances Control Act [15 U.S.C. 2601, et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, et seq.], the Hazardous Materials Transportation Authorization Act [49 U.S.C. Section 5 10 1, 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 {S:BRKWD /0001 /DED /01100666.DOCX {S:BRKWD /OOOIBED /01106470.DOCX} 11 137 [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 and the location of any Property, including books and records pertaining to the Property. 7.13 Indemnification. To the fullest extent permitted by law, Trustor shall indemnify, defend (with counsel reasonably acceptable to Beneficiary), and hold 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 by 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 the Land or in any improvement located thereon, whether caused by the negligence or any other act or omission of Trustor or any other person or by negligent, faulty, inadequate or defective design, building, {S:BRKWD /0001 /DED /01100666.DOCX {S:BRKWD /0001 /DED /01106470.DOCX} 12 138 construction or maintenance or any other condition or otherwise, (d) any claim, demand or cause of action, or any action or other proceeding, whether meritorious or not, brought or asserted against any Indemnitee which relates to or arises out of the Property, or any 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 refusal to perform or discharge any obligation or liability of Trustor under any agreement related to the Property or under this Deed of Trust; (iii) any waste committed by Trustor, the lessees of the Property or any third parties, or any dangerous or defective condition of the Property; or (iv) any loss sustained by Trustor or any third party resulting from any act or omission of Beneficiary in managing the Property after an Event of Default, unless the loss is caused by the willful misconduct, gross negligence, or bad faith of Beneficiary. Trustor hereby expressly waives and releases all liability of the types described in this Section 7.14 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 in 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. {S:BRKWD /0001 /DED /01100666.DOCX {S:BRKWD /0001 /DED /01106470.DOCX} 13 139 7.17 Reconveyance. Upon written request of Beneficiary stating that all of the Secured Obligations have been paid and performed in full, and upon surrender of this Deed of Trust, and the Note, Trustee shall reconvey, without warranty, the Property or so much of it as is then held under this Deed of Trust. The recitals in any reconveyance executed under this Deed of Trust of any matters or facts shall be conclusive proof of the truthfulness thereof. Trustor shall pay all fees of Trustee and all recordation fees related to such reconveyance. 7.18 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 rights or powers of Beneficiary or Trustee under, this Deed of Trust; paying, purchasing, contesting or compromising any encumbrance, charge, lien or claim of lien which in Beneficiary's 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 of Trust. 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 to perform any monetary obligation which arises under this Deed of Trust, and does not cure that failure within ten (10) days following written notice from Beneficiary or Trustee; C. If Trustor's interest in the Property or any part thereof is voluntarily or 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 DDA 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; {S:BRKWD /0001 /DED /01106470.DOCX} 14 {S:BRKWD /0001 /DED /01100666.DOCX 140 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 30 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 to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (`Bankruptcy Law "), Trustor or any general partner thereof (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Trustor or any general partner thereof in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Trustor or any general partner thereof, (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due. h. If a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against Trustor or any general partner thereof in an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for Trustor or any general partner thereof or substantially all of such entity's assets, (iii) orders the liquidation of Trustor or any general partner thereof, or (iv) issues or levies a judgment, writ, warrant of attachment or similar process against the Property or the Project, and in each case the order or decree is not released, vacated, dismissed or fully bonded within 60 days after its issuance. i. The holder of any other debt instrument secured by a mortgage or deed of trust on the Property or part thereof declares an event of default thereunder and exercises a right to declare all amounts due under that debt instrument immediately due and payable, subject to the expiration of any applicable cure period set forth in such holder's documents; or j. Trustor fails to perform any obligation arising under this Deed of Trust other than one enumerated in this Section 8. 1, and does not cure that failure either within ten (10) days after written notice from Beneficiary or Trustee in the event of a monetary default, or within thirty (30) days after such written notice in the event of a nonmonetary default, provided that in the case of a nonmonetary default that in Beneficiary's reasonable judgment cannot reasonably be cured within thirty (30) days, an Event of Default shall not arise hereunder if Trustor commences to cure such default within thirty (30) days and thereafter prosecutes such cure to completion with due diligence and in good faith and in no event later than sixty (60) days following receipt of notice of default. 8.2 Remedies. Subject to the applicable notice and cure provisions set forth herein, at any time after an Event of Default, Beneficiary and Trustee shall be entitled to invoke any and all of the rights and remedies described below, and may exercise any one or more or all, of the remedies set forth in any Loan Document, and any other remedy existing at law or in equity or by statute. All of Beneficiary's rights and remedies shall be cumulative, and the {S:BRKWD /0001 /DED /01100666.DOCX {S:BRKWD /0001 /DED /01106470.DOCX} 15 141 exercise of any one or more of them shall not constitute an election of remedies. Beneficiary shall be entitled to collect all expenses incurred in pursuing the remedies provided hereunder, including without limitation reasonable attorneys' fees and costs. a. Acceleration. Beneficiary may declare any or all of the Secured Obligations, including without limitation all sums payable under the Note and this Deed of Trust, to be due and payable immediately. b. Receiver. Beneficiary may apply to any court of competent jurisdiction for, and obtain appointment of, a receiver for the Property. C. Entry. Beneficiary, in person, by agent or by court - appointed receiver, may enter, take possession of, manage and operate all or any part of the Property, and may also do any and all other things in connection with those actions that Beneficiary may in its sole discretion consider necessary and appropriate to protect the security of this Deed of Trust. Such other things may include: taking and possessing copies of all of Trustor's or the then owner's books and records concerning the Property; entering into, enforcing, modifying, or canceling Leases on such terms and conditions as Beneficiary may consider proper; obtaining and evicting tenants; fixing or modifying Rents; collecting and receiving any payment of money owing to Trustor; completing any unfinished construction; and /or contracting for and making repairs and alterations. If Beneficiary so requests, Trustor shall assemble all of the Property that has been removed from the Land and make all of it available to Beneficiary at the site of the Land. Trustor hereby irrevocably constitutes and appoints Beneficiary as Trustor's attorney -in -fact to perform such acts and execute such documents as Beneficiary in its sole discretion may consider to be appropriate in connection with taking these measures, including endorsement of Trustor's name on any instruments. d. UCC Remedies. Beneficiary may exercise any or all of the remedies granted to a secured party under the UCC. e. Judicial Action. Beneficiary may bring an action in any court of competent jurisdiction to foreclose this Deed of Trust in the manner provided by law for foreclosure of mortgages on real property and /or to obtain specific enforcement of any of the covenants or agreements of this Deed of Trust. f. Power of Sale. Under the power of sale hereby granted, Beneficiary shall have the discretionary right to cause some or all of the Property, including any Property which constitutes personal property, to be sold or otherwise disposed of in any combination and in any 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 of the Recorder of each County wherein the Property or some part thereof is situated as required by law and this Deed of Trust. Prior to publication of the notice of sale, Beneficiary shall deliver to Trustee this Deed of Trust and the Note or other evidence of indebtedness which is secured hereby, together with a {S:BRKWD /0001 /DED /01106470.DOCX} 16 {S:BRKWD /0001 /DED /01100666.DOCX 142 written request for the Trustee to proceed with a sale of the Property, pursuant to the provisions of law and this Deed of Trust. Notice of sale having been given as then required by law, and not less than the time then required by law having elapsed after recordation of such notice of default, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in the notice of sale, either as a whole or in separate parcels and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may, and at Beneficiary's request shall, postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time and place fixed by the preceding postponement. Trustee shall deliver to the purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary, may purchase at such sale. After deducting all costs, fees, and expenses of Trustee and of the trust hereby created, including reasonable attorneys' fees in connection with sale, Trustee shall apply the proceeds of sale to payment of all sums advanced or expended by Beneficiary or Trustee under the terms hereof and all outstanding sums then secured hereby, and the remainder, if any, to the person or persons legally entitled thereto. Without limiting the generality of the foregoing, Trustor acknowledges and agrees that regardless of whether or not a default has occurred hereunder, if an Event of Default has occurred under the 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 Reinstate. Notwithstanding Beneficiary's acceleration of the sums secured by this Deed of Trust, Trustor shall have the right to have any proceedings begun by Beneficiary to enforce this Deed of Trust discontinued at any time prior to five days before sale of the Property pursuant to the power of sale contained in this Deed of Trust or at any {S:BRKWD /0001 /DED /01100666.DOCX {S:BRKWD /0001 /DED /01106470.DOCX} 17 143 time prior to entry of a judgment enforcing this Deed of Trust if: (a) Trustor pays Beneficiary all sums which would be then due under the Loan Documents if the Secured Obligations had no acceleration provision; (b) Trustor cures all breaches of any other covenants or agreements of Trustor contained in this Deed of Trust; (c) Trustor pays all reasonable expenses incurred by Beneficiary and Trustee in enforcing the covenants and agreements of Trustor contained in this Deed of Trust, and in enforcing Beneficiary's and Trustee's remedies as provided herein, including, but not limited to, reasonable attorney's fees; and (d) Trustor takes such action as Beneficiary may reasonably require to assure that the lien of this Deed of Trust, Beneficiary's interest in the Property and Trustor's obligation to pay the sums secured by this Deed of Trust shall continue unimpaired. Upon such payment and cure by Trustor, this Deed of Trust and the obligations secured hereby shall remain in full force and effect as if no acceleration had occurred. 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 the UCC. Except for any notice required under applicable law to be given in another manner, all notices to be sent pursuant to this Deed of Trust shall be made in writing, and sent to the parties at their respective addresses specified below or to such other address as a party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by: a. personal delivery, in which case notice shall be deemed delivered upon receipt; b. certified or registered mail, return receipt requested, in which case notice shall be deemed delivered two (2) business days after deposit, postage prepaid in the United States mail; C. nationally recognized overnight courier, in which case notice shall be deemed delivered one (1) day after deposit with such courier; or {S:BRKWD /0001 /DED /01100666.DOCX {S:BRKWD /0001 /DED /01106470.DOCX} 18 144 d. facsimile transmission, in which case notice shall be deemed delivered on transmittal, provided that a transmission report is generated reflecting the accurate transmission thereof. Beneficiary: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attention: City Manager Trustor: Brookwood Equities LLC One Embarcadero Center, Suite 500 San Francisco, CA 94111 Tel: (415) 402 -0800 Fax: 415- 399 -9367 Trustee: Attn: 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 appointment of such trustee or trustees, and such new trustee or trustees shall succeed to all of the powers and duties of the Trustee named herein. 10.5 Attorneys' Fees and Costs. In any action or proceeding to foreclose this Deed of Trust or to enforce any right of Beneficiary or of Trustee, Trustor shall pay to Beneficiary and Trustee all costs of such action or proceeding, including reasonable attorneys' fees. 10.6 Governing Law, Severability; Interpretation. This Deed of Trust shall be governed by the laws of the State of California without regard to principles of conflicts of laws. Trustor agrees that any controversy arising under or in relation to this Deed of Trust shall be litigated exclusively in the jurisdiction where the Land is located (the "Property Jurisdiction "). The state and federal courts and authorities with jurisdiction in the Property Jurisdiction shall have exclusive jurisdiction over all controversies which shall arise under or in relation to the 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 {S:BRKWD /0001 /DED /01100666.DOCX {S:BRKWD /0001 /DED /01106470.DOCX} 19 145 domicile, habitual residence or otherwise. If any provision of this Deed of Trust is held unenforceable or void, that provision shall be deemed severable from the remaining provisions, and shall in no way affect the validity of this Deed of Trust. The captions used in this Deed of Trust are for convenience only and are not intended to affect the interpretation or construction of the provisions herein contained. In this Deed of Trust, whenever the context so requires, the singular number includes the plural. 10.7 Waiver, Modification and Amendment. Any waiver by Beneficiary of any obligation of Trustor hereunder must be in writing, and no waiver shall be construed as a continuing waiver. No waiver shall be implied from any delay or failure by Beneficiary or Trustee to take action on account of any default of Trustor. Consent by Beneficiary or Trustee to any act or omission by Trustor shall not be construed as a consent to any other or subsequent act or omission or to waive the requirement for Beneficiary's or Trustee's consent to be obtained in any future or other instance. No amendment to or modification of this Deed of Trust shall be effective unless and until such amendment or modification is in writing, executed by Trustor and Beneficiary. Without limiting the generality of the foregoing, Beneficiary's acceptance of payment of any sum secured hereby after its due date shall not constitute a waiver by Beneficiary of its right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. 10.8 Action by Beneficiary. Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, or consent by the Beneficiary is required or permitted under this Agreement, such action shall be in writing, and such action may be given, made or taken by Beneficiary's City Manager or by any person who shall have been designated by Beneficiary's City Manager, without further approval by the governing board of Beneficiary. 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. IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the date first written above. TRUSTOR: BROOKWOOD EQUITIES LLC, a Delaware limited liability company By: BROOKWOOD GROUP, INC., a California corporation, its Manager Shepherd Heery Chairman and Chief Executive Officer {S:BRKWD /0001 /DED /01100666.DOCX {S:BRKWD /0001 /DED /01106470.DOCX} 2 0 146 SIGNATURES MUST BE NOTARIZED STATE OF CALIFORNIA ) COUNTY OF SAN MATEO ) On , 2015, 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 STATE OF CALIFORNIA ) COUNTY OF SAN MATEO ) (Seal) On , 2015, 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) {S:BRKWD /0001 /DED /01106470.DOCX} 21 {S:BRKWD /0001 /DED /01100666.DOCX 147 {S:BRKWD /0001 /DED /01100666.DOCX Exhibit A LAND (Attach legal description.) { S :BRKWD /OOOIBED /01106470.DOCX}22 E• DDA Exhibit E -2 Form of Agency Deed of Trust 149 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: City Manager EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE §§6103,27383 Space above this line for Recorder's use DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (AGENCY DEED OF TRUST) THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING ( "Deed of Trust ") is made as of , 2015, by Brookwood Equities LLC, a Delaware limited liability company ( "Trustor ") to Title Company as trustee ( "Trustee "), for the benefit of the South San Francisco Successor Agency , a municipal corporation ( "Beneficiary "). RECITALS A. Trustor owns or will own fee simple title to the land located at 201 -219 Grand Avenue known as San Mateo Assessor's Parcel Nos. 012 -316 -110, 012 - 316 -100, 012 -316 -090 and 012 -316 -080, and more particularly described in Exhibit A attached hereto and incorporated herein by this reference (the "Land "). Trustor intends to construct, own and operate a mixed - use, multifamily residential development on the Land (the "Project "). B. Beneficiary, Trustor and the City of South San Francisco ( "City ") have entered into a Disposition and Development Agreement dated as of , 2015 (the "DDA ") and a Purchase and Sale Agreement of even date therewith (the "Purchase and Sale Agreement ") pursuant to which Beneficiary will provide a loan to Trustor in the amount of Two Million Twenty Thousand Dollars ($2,020,000) for purchase of the Land ( "Loan "). Trustor has issued to Beneficiary a secured promissory note dated as of the date hereof in the amount of the Loan to evidence Trustor's obligation to repay the Loan ( "Note "). A Memorandum of the DDA 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 DDA and under the Loan Document (defined below). NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed as follows. {S:BRKWD /0001 /DED /01106472.DOCX} 1 150 I . Grant in Trust. In consideration of the foregoing and for the purpose of securing payment and performance of the Secured Obligations defined and described in Section 2, Trustor hereby irrevocably and unconditionally grants, conveys, transfers and assigns to Trustee, in trust for the 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, equipment, fixtures, goods and other personal property of the Trustor, whether moveable or not, now owned or hereafter acquired by the Trustor and now or hereafter located at or used in connection with the Land, the Improvements or Appurtenances, and all improvements, restorations, replacements, repairs, additions or substitutions thereto (collectively, "Equipment"); (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, "Plans "); and {S:BRKWD /0001 /DED /01106472.DOCX} 2 151 (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, Proceeds, Gross Revenues, Plans and Financing as hereby conveyed to Trustee or made subject to the security interest herein described are collectively referred to herein as the "Property." 2. Obligations Secured. This Deed of Trust is given for the purpose of securing payment and performance of the following (collectively, the "Secured Obligations "): (i) all present and future indebtedness evidenced by the Note and any amendment thereof, including principal, interest and all other amounts payable under the terms of the Note; (ii) all present and future obligations of Trustor to Beneficiary under the Loan 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 by new or additional documents; and (v) reimbursement of all amounts advanced by or on behalf of Beneficiary to protect Beneficiary's interests under this Deed of Trust or any other Loan Document as such may be modified, supplemented, amended, renewed or extended. The Note, the DDA, 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 Agency, City 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. Upon the occurrence of any such Event of Default, Beneficiary may terminate such license without notice to or demand upon Trustor and without regard to the adequacy of any security for the indebtedness hereby secured, and may either in person, by agent, or by a receiver to be appointed by a court, enter upon and take possession of the Property or any part thereof, and sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorneys' fees, to any indebtedness secured hereby, and in such order as Beneficiary may determine. Beneficiary's right to the rents, royalties, issues, profits, revenue, income and proceeds of the Property does not depend upon whether or not Beneficiary takes possession of the Property. The entering upon and taking possession of the Property, the collection of such rents, issues, and profits, and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. If an Event of Default occurs while Beneficiary is in possession of all or part of the Property and /or is collecting and applying Rents as permitted under this Deed of Trust, Beneficiary, Trustee and any receiver shall nevertheless be entitled to exercise and invoke every {S:BRKWD /0001 /DED /01106472.DOCX} 3 152 right and remedy afforded any of them under this Deed of Trust and at law or in equity, including the right to exercise the power of sale granted hereunder. Regardless of whether or not Beneficiary, in person or by agent, takes actual possession of the Land or the Improvements, Beneficiary shall not be deemed to be a "mortgagee in possession," shall not be responsible for performing any obligation of Trustor under any Lease, shall not be liable in any manner for the Property, or the use, occupancy, enjoyment or operation of any part of it, and shall not be responsible for any waste committed by Trustor, lessees or any third parties, or for dangerous or defective condition of the Property or any negligence in the management, repair or control of the Property. Absent Beneficiary's written consent, Trustor shall not accept prepayment of Rents for any rental period exceeding one month. 4. Security Agreement. The parties intend for this Deed of Trust to create a lien on the Property, and an absolute assignment of the Rents and Leases, all in favor of Beneficiary. The parties acknowledge that some of the Property may be determined under applicable law to be personal property or fixtures. To the extent that any Property may be or be determined to be personal property, Trustor as debtor hereby grants to Beneficiary as secured party a security interest in all such Property to secure payment and performance of the Secured Obligations. This Deed of Trust constitutes a security agreement under the California Uniform Commercial Code, as amended or recodified from time to time (the "UCC "), covering all such Property. To the extent such Property is not real property encumbered by the lien granted above, and is not absolutely assigned by the assignment set forth above, it is the intention of the parties that such Property shall constitute "proceeds, products, offspring, rents, or profits" (as defined in and for the purposes of Section 552(b) of the United States Bankruptcy Code, as such section may be modified or supplemented) of the Land and Improvements. 5. Financing Statements. Pursuant to the UCC, Trustor, as debtor, hereby authorizes Beneficiary, as secured party, to file such financing statements and amendments thereof and such continuation statements with respect thereto as Beneficiary may deem appropriate to perfect and preserve Beneficiary's security interest in the Property and Rents, without requiring any signature or further authorization by Trustor. If requested by Beneficiary, Trustor shall pay all fees and costs that Beneficiary may incur in filing such documents in public offices and in obtaining such record searches as Beneficiary may reasonably require. If any financing statement or other document is filed in the records normally pertaining to personal property, that filing shall not be construed as in any way derogating from or impairing this Deed of Trust or the rights or obligations of the parties under it. Everything used in connection with the Property and /or adapted for use therein and /or which is described or reflected in this Deed of Trust is, and at all times and for all purposes and in all proceedings both legal or equitable shall be regarded as part of the estate encumbered by this Deed of Trust irrespective of whether (i) any such item is physically attached to the Improvements, (ii) serial numbers are used for the better identification of certain equipment items capable of being thus identified in a recital contained herein or in any list filed with Beneficiary, or (iii) any such item is referred to or reflected in any such financing statement so filed at any time. Similarly, the mention in any such financing statement of (1) rights in or to the proceeds of any fire and /or hazard insurance policy, or (2) any award in eminent domain proceedings for a taking or for lessening of value, or (3) Trustor's interest as lessor in any present or future lease or rights to income growing out of the use and /or occupancy of the property {S:BRKWD /0001 /DED /01106472.DOCX} 4 153 conveyed hereby, whether pursuant to lease or otherwise, shall not be construed as in any way altering any of the rights of Beneficiary as determined by this instrument or impugning the priority of Beneficiary's lien granted hereby or by any other recorded document. Such mention in any financing statement is declared to be solely for the protection of Beneficiary in the event any court or judge shall at any time hold, with respect to the matters set forth in the foregoing clauses (1), (2), and (3), that notice of Beneficiary's priority of interest is required in order to be effective against a particular class of persons, including but not limited to the federal government and any subdivisions or entity of the federal government. 6. Fixture Filing. This Deed of Trust is intended to be and constitutes a fixture filing pursuant to the provisions of the UCC with respect to all of the Property constituting fixtures, is being recorded as a fixture financing statement and filing under the UCC, and covers property, goods and equipment which are or are to become fixtures related to the Land and the Improvements. Trustor covenants and agrees that this Deed of Trust is to be filed in the real estate records of 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 accounts subject to the UCC, as amended. Trustor shall be deemed to be the "debtor" and Beneficiary shall be deemed to be the "secured party" for all purposes under the UCC. 7. Trustor's Representations, Warranties and Covenants, Rights and Duties of the Parties. 7.1 Representations and Warranties. Trustor represents and warrants that: (i) Trustor lawfully possesses and holds 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 and unlimited power, right and authority to encumber the Property and assign the Rents; (iv) subject only to encumbrances of record and senior liens permitted pursuant to the 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. Beneficiary agrees that it will not withhold consent to reasonable requests for subordination of this Deed of Trust to deeds of trust provided for the benefit of lenders identified in the Financing Plan approved in connection with the DDA provided that the subordination agreement includes reasonable protections to the Beneficiary in the event of default. 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 governmental regulations concerning the Property that has not previously been corrected, and to Trustor's best knowledge, no condition on the Land violates any health, safety, fire, environmental, sewage, building, or other federal, state or local law, ordinance or regulation; (ii) no contracts, licenses, leases or commitments regarding the {S:BRKWD /0001 /DED /01106472.DOCX} 5 154 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 thereof, (v) Trustor has not received any notice from any insurer of defects of the Property which have not been corrected; (vi) to Trustor's best knowledge 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 Performance of Secured Obligations. Trustor shall promptly pay when due the principal and any interest due on the indebtedness evidenced by the Note, and shall promptly pay and perform all other obligations of Trustor arising in connection with the Secured Obligations or the Loan Documents in accordance with the respective terms thereof. 7.5 Use of Loan Proceeds, Preservation and Maintenance of Property, Compliance with Laws. Trustor covenants that it shall use the proceeds of the Loan 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 and local laws, regulations, ordinances and rules applicable to the Property and the Project, including without limitation all applicable requirements of state and local building codes and regulations, and all applicable statutes and regulations relating to accessibility for the disabled. Trustor shall not remove, demolish or materially alter any Improvement without Beneficiary's consent, shall complete or restore promptly and in good and workmanlike manner any building, fixture or other improvement which may be constructed, damaged, or destroyed thereon, and shall pay when due all claims for labor performed and materials furnished therefor. Trustor shall use the Land and 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, {S:BRKWD /0001 /DED /01106472.DOCX} 6 155 assigned, conveyed, transferred, hypothecated, leased, licensed, or encumbered in violation of the Loan Documents or if any other Transfer (as defined in the DDA) 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 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 proceeds of the Loan 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, Taxes and Assessments. Trustor shall pay before delinquency all taxes, levies, assessments and other charges affecting the Property that are (or if not paid may become) a lien on all or part of the Property. Trustor may, at Trustor's expense, contest the validity or application of any tax, levy, assessment or charge affecting the Property by appropriate legal proceedings promptly initiated and conducted in good faith and with due diligence, provided that (i) Beneficiary is reasonably satisfied that neither the Property nor any part thereof or interest therein will be in danger of being sold, forfeited, or lost as a result of such contest, and (ii) Trustor shall have posted a bond or furnished other security as may reasonably be required from time to time by Beneficiary; and provided further that Trustor shall timely make any payment necessary to prevent a lien foreclosure, sale, forfeiture or loss of the Property. 7.9 Subrogation. Beneficiary shall be subrogated to the liens of all encumbrances, whether released of record or not, which are discharged in whole or in part by Beneficiary in accordance with this Deed of Trust. 7.10 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 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 of default hereunder or invalidate any act done pursuant to such notice. Notwithstanding anything to the contrary set forth herein, provided that Trustor is {S:BRKWD /0001 /DED /01106472.DOCX} 7 156 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 City 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 Beneficiary as an additional insured. Trustor shall maintain workers' compensation insurance as required by law. 7.10.2 Trustor shall file 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 policies) 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 in coverage under each such policy. 7.10.3 If any insurance 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 to 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. 7.11 Hazardous Materials. Trustor represents and warrants that except as disclosed to Beneficiary in writing, as of the date hereof to the best knowledge of Trustor: (i) the Land is free and has always been free of Hazardous Materials (as defined below) and is not and has never been in violation of any Environmental Law (as defined below); (ii) there are no buried or partially buried storage tanks located on the Land; (iii) Trustor has received no notice, {S:BRKWD /0001 /DED /01106472.DOCX} 8 157 warning, notice of violation, administrative complaint, judicial complaint, or other formal or informal notice alleging that conditions on the Land are or have ever been in violation of any Environmental Law or informing Trustor that the Land is subject to investigation or inquiry regarding Hazardous Materials on the Land or the potential violation of any Environmental Law; (iv) there is no monitoring program required by the Environmental Protection Agency or any other governmental agency concerning the Land; (v) no toxic or hazardous chemicals, waste, or substances of any kind have ever been spilled, disposed of, or stored on, under or at the Land, whether by accident, burying, drainage, or storage in containers, tanks, holding areas, or any other means; (vi) the Land has never been used as a dump or landfill; and (vii) Trustor has disclosed to Beneficiary all information, records, and studies in Trustor's possession or reasonably available to Trustor relating to the Land concerning Hazardous Materials. Trustor shall not cause or permit any Hazardous Material (as defined 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 residential developments and in compliance with all applicable laws, and shall not cause any release of Hazardous Materials into, onto, under or through the Land. If any Hazardous Material is discharged, released, dumped, or spilled in, on, under, or about the Land and results in any contamination of the Land or adjacent property, or otherwise results in the release or discharge of Hazardous Materials in, on, under or from the Land, Trustor shall promptly take all actions at its sole expense as are necessary to comply with all Environmental Laws (as defined below). To the fullest extent permitted by law, Trustor shall indemnify, defend (with counsel reasonably acceptable to Beneficiary), and hold Beneficiary and its elected and appointed officials, officers, agents and employees (collectively, "Indemnitees ") harmless from and against any and all loss, claim, liability, damage, demand, judgment, order, penalty, fine, injunctive or other relief, cost, expense (including reasonable fees and expenses of attorneys, expert witnesses, and other professionals advising or assisting Beneficiary), action, or cause of action (all of the foregoing, hereafter individually "Claim" and collectively "Claims ") arising in connection with the breach of Trustor's covenants and obligations set forth in this Section 7.11 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 disposal of Hazardous Materials, all costs of determining whether the Land is in compliance with Environmental Laws, all costs associated with bringing the Land into compliance with all applicable Environmental Laws, and all costs associated with claims for damages or injury to persons, property, or natural resources. Without limiting the generality of the foregoing, Trustor shall, at Trustor's own cost and expense, do all of the following: a. pay or satisfy any judgment or decree that may be entered against any Indemnitee or Indemnitees in any legal or administrative proceeding incident to any matters against which Indemnitees are entitled to be indemnified under this Deed of Trust; {S:BRKWD /0001 /DED /01106472.DOCX} 9 158 b. reimburse Indemnitees for any expenses paid or incurred in connection with any matters against which Indemnitees are entitled to be indemnified under this Deed of Trust; and C. reimburse Indemnitees for any and all expenses, including without limitation 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 of 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 Section 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 736(f)(2) of the California Code of Civil Procedure) made by Trustor relating to real property security (the "Environmental Provisions "), and that Trustor's failure to comply with any of the Environmental Provisions will be a breach of contract that will entitle Beneficiary to pursue the remedies provided by Section 736 of the California Code of Civil Procedure ( "Section 736 ") for the recovery of damages and for the enforcement of the Environmental Provisions. Pursuant to Section 736, Beneficiary's action for recovery of damages or enforcement of the Environmental Provisions shall not constitute an action within the meaning of Section 726(a) of the California Code of Civil Procedure or constitute a money judgment for a deficiency or a deficiency judgment within the meaning of Sections 580a, 580b, 5804, or 726(b) of the California Code of Civil Procedure. "Hazardous Materials" means any substance, material or waste which is or becomes regulated by any federal, state or local governmental authority, and includes without limitation (i) petroleum or oil or gas or any direct or indirect product or by- product thereof, (ii) asbestos {S:BRKWD /0001 /DED /01106472.DOCX} 10 159 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, el 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 - 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 operating authorizations regulating, or relating to, or imposing liability or standards of conduct concerning (i) pollution or protection of the environment, including natural resources; (ii) exposure of persons, including employees and agents, to any Hazardous Material (as defined above) or other products, raw materials, chemicals or other substances; (iii) protection of the public health or welfare from the effects of by- products, wastes, emissions, discharges or releases of chemical substances from industrial or commercial activities; (iv) the manufacture, use or introduction into commerce of chemical substances, including without limitation, their manufacture, formulation, labeling, distribution, transportation, handling, storage and disposal; or (iv) the use, release or disposal of toxic or hazardous substances or Hazardous Materials or the remediation of air, surface waters, groundwaters or soil, as now or may at any later time be in effect, including but not limited to the Toxic Substances Control Act [15 U.S.C. 2601, et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, et seq.], the Hazardous Materials Transportation Authorization Act [49 U.S.C. Section 5 10 1, et seq.], the Resource Conservation and Recovery Act [42 U.S.C. 6901, et seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251], the Clean Air Act [42 U.S.C. Section 7401, et seq.], the California Underground Storage of Hazardous Substances Act [California Health and Safety Code Section 25280, et seq.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300, et seq.], the California Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enforcement Act [California Health and Safety Code Section 25249.5, et seq.], and the Porter - Cologne Water Quality Control Act [California Water Code Section 13000, et seq.], as they now exist or are hereafter amended, together with any regulations promulgated thereunder. {S:BRKWD /0001 /DED /01106472.DOCX} 11 160 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 and the location of any Property, including books and records pertaining to the Property. 7.13 Indemnification. To the fullest extent permitted by law, Trustor shall indemnify, defend (with counsel reasonably acceptable to Beneficiary), and hold 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 by 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 the Land or in any improvement located thereon, whether caused by the negligence or any other act or omission of Trustor or any other person or by negligent, faulty, inadequate or defective design, building, construction or maintenance or any other condition or otherwise, (d) any claim, demand or cause of action, or any action or other proceeding, whether meritorious or not, brought or asserted against any Indemnitee which relates to or arises out of the Property, or any Loan Document or any transaction contemplated thereby, or any failure of Trustor to comply with all applicable {S:BRKWD /0001 /DED /01106472.DOCX} 12 161 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 refusal to perform or discharge any obligation or liability of Trustor under any agreement related to the Property or under this Deed of Trust; (iii) any waste committed by Trustor, the lessees of the Property or any third parties, or any dangerous or defective condition of the Property; or (iv) any loss sustained by Trustor or any third party resulting from any act or omission of Beneficiary in managing the Property after an Event of Default, unless the loss is caused by the willful misconduct, gross negligence, or bad faith of Beneficiary. Trustor hereby expressly waives and releases all liability of the types described in this Section 7.14 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 in 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. 7.17 Reconveyance. Upon written request of Beneficiary stating that all of the Secured Obligations have been paid and performed in full, and upon surrender of this Deed of Trust, and the Note, Trustee shall reconvey, without warranty, the Property or so much of it as is then held under this Deed of Trust. The recitals in any reconveyance executed under this Deed {S:BRKWD /0001 /DED /01106472.DOCX} 13 162 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 rights or powers of Beneficiary or Trustee under, this Deed of Trust; paying, purchasing, contesting or compromising any encumbrance, charge, lien or claim of lien which in Beneficiary's 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 of Trust. 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 to perform any monetary obligation which arises under this Deed of Trust, and does not cure that failure within ten (10) days following written notice from Beneficiary or Trustee; C. If Trustor's interest in the Property or any part thereof is voluntarily or 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 DDA 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; 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 30 days. {S:BRKWD /0001 /DED /01106472.DOCX} 14 163 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 to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (`Bankruptcy Law "), Trustor or any general partner thereof (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Trustor or any general partner thereof in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Trustor or any general partner thereof, (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due. h. If a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against Trustor or any general partner thereof in an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for Trustor or any general partner thereof or substantially all of such entity's assets, (iii) orders the liquidation of Trustor or any general partner thereof, or (iv) issues or levies a judgment, writ, warrant of attachment or similar process against the Property or the Project, and in each case the order or decree is not released, vacated, dismissed or fully bonded within 60 days after its issuance. i. The holder of any other debt instrument secured by a mortgage or deed of trust on the Property or part thereof declares an event of default thereunder and exercises a right to declare all amounts due under that debt instrument immediately due and payable, subject to the expiration of any applicable cure period set forth in such holder's documents; or j. Trustor fails to perform any obligation arising under this Deed of Trust other than one enumerated in this Section 8. 1, and does not cure that failure either within ten (10) days after written notice from Beneficiary or Trustee in the event of a monetary default, or within thirty (30) days after such written notice in the event of a nonmonetary default, provided that in the case of a nonmonetary default that in Beneficiary's reasonable judgment cannot reasonably be cured within thirty (30) days, an Event of Default shall not arise hereunder if Trustor commences to cure such default within thirty (30) days and thereafter prosecutes such cure to completion with due diligence and in good faith and in no event later than sixty (60) days following receipt of notice of default. 8.2 Remedies. Subject to the applicable notice and cure provisions set forth herein, at any time after an Event of Default, Beneficiary and Trustee shall be entitled to invoke any and all of the rights and remedies described below, and may exercise any one or more or all, of the remedies set forth in any Loan Document, and any other remedy existing at law or in equity or by statute. All of Beneficiary's rights and remedies shall be cumulative, and the exercise of any one or more of them shall not constitute an election of remedies. Beneficiary shall be entitled to collect all expenses incurred in pursuing the remedies provided hereunder, including without limitation reasonable attorneys' fees and costs. {S:BRKWD /0001 /DED /01106472.DOCX} 15 164 a. Acceleration. Beneficiary may declare any or all of the Secured Obligations, including without limitation all sums payable under the Note and this Deed of Trust, to be due and payable immediately. b. Receiver. Beneficiary may apply to any court of competent jurisdiction for, and obtain appointment of, a receiver for the Property. C. Entry. Beneficiary, in person, by agent or by court - appointed receiver, may enter, take possession of, manage and operate all or any part of the Property, and may also do any and all other things in connection with those actions that Beneficiary may in its sole discretion consider necessary and appropriate to protect the security of this Deed of Trust. Such other things may include: taking and possessing copies of all of Trustor's or the then owner's books and records concerning the Property; entering into, enforcing, modifying, or canceling Leases on such terms and conditions as Beneficiary may consider proper; obtaining and evicting tenants; fixing or modifying Rents; collecting and receiving any payment of money owing to Trustor; completing any unfinished construction; and /or contracting for and making repairs and alterations. If Beneficiary so requests, Trustor shall assemble all of the Property that has been removed from the Land and make all of it available to Beneficiary at the site of the Land. Trustor hereby irrevocably constitutes and appoints Beneficiary as Trustor's attorney -in -fact to perform such acts and execute such documents as Beneficiary in its sole discretion may consider to be appropriate in connection with taking these measures, including endorsement of Trustor's name on any instruments. d. UCC Remedies. Beneficiary may exercise any or all of the remedies granted to a secured party under the UCC. e. Judicial Action. Beneficiary may bring an action in any court of competent jurisdiction to foreclose this Deed of Trust in the manner provided by law for foreclosure of mortgages on real property and /or to obtain specific enforcement of any of the covenants or agreements of this Deed of Trust. f. Power of Sale. Under the power of sale hereby granted, Beneficiary shall have the discretionary right to cause some or all of the Property, including any Property which constitutes personal property, to be sold or otherwise disposed of in any combination and in any 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 of the Recorder of each County wherein the Property or some part thereof is situated as required by law and this Deed of Trust. Prior to publication of the notice of sale, Beneficiary shall deliver to Trustee this Deed of Trust and the Note or other evidence of indebtedness which is secured hereby, together with a written request for the Trustee to proceed with a sale of the Property, pursuant to the provisions of law and this Deed of Trust. {S:BRKWD /0001 /DED /01106472.DOCX} 16 165 Notice of sale having been given as then required by law, and not less than the time then required by law having elapsed after recordation of such notice of default, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in the notice of sale, either as a whole or in separate parcels and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may, and at Beneficiary's request shall, postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time and place fixed by the preceding postponement. Trustee shall deliver to the purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary, may purchase at such sale. After deducting all costs, fees, and expenses of Trustee and of the trust hereby created, including reasonable attorneys' fees in connection with sale, Trustee shall apply the proceeds of sale to payment of all sums advanced or expended by Beneficiary or Trustee under the terms hereof and all outstanding sums then secured hereby, and the remainder, if any, to the person or persons legally entitled thereto. Without limiting the generality of the foregoing, Trustor acknowledges and agrees that regardless of whether or not a default has occurred hereunder, if an Event of Default has occurred under the 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 Reinstate. Notwithstanding Beneficiary's acceleration of the sums secured by this Deed of Trust, Trustor shall have the right to have any proceedings begun by Beneficiary to enforce this Deed of Trust discontinued at any time prior to five days before sale of the Property pursuant to the power of sale contained in this Deed of Trust or at any time prior to entry of a judgment enforcing this Deed of Trust if. (a) Trustor pays Beneficiary all sums which would be then due under the Loan Documents if the Secured Obligations had no acceleration provision; (b) Trustor cures all breaches of any other covenants or agreements of {S:BRKWD /0001 /DED /01106472.DOCX} 17 166 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 the UCC. Except for any notice required under applicable law to be given in another manner, all notices to be sent pursuant to this Deed of Trust shall be made in writing, and sent to the parties at their respective addresses specified below or to such other address as a party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by: a. personal delivery, in which case notice shall be deemed delivered upon receipt; b. certified or registered mail, return receipt requested, in which case notice shall be deemed delivered two (2) business days after deposit, postage prepaid in the United States mail; C. nationally recognized overnight courier, in which case notice shall be deemed delivered one (1) day after deposit with such courier; or d. facsimile transmission, in which case notice shall be deemed delivered on transmittal, provided that a transmission report is generated reflecting the accurate transmission thereof. {S:BRKWD /0001 /DED /01106472.DOCX} 18 167 Beneficiary: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attention: City Manager Trustor: Brookwood Equities LLC One Embarcadero, Suite 500 San Francisco, CA 94111 Tel: (415) 402 -0800 Fax: (415) 399 -9367 Trustee: Attn: 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 appointment of such trustee or trustees, and such new trustee or trustees shall succeed to all of the powers and duties of the Trustee named herein. 10.5 Attorneys' Fees and Costs. In any action or proceeding to foreclose this Deed of Trust or to enforce any right of Beneficiary or of Trustee, Trustor shall pay to Beneficiary and Trustee all costs of such action or proceeding, including reasonable attorneys' fees. 10.6 Governing Law; Severability; Interpretation. This Deed of Trust shall be governed by the laws of the State of California without regard to principles of conflicts of laws. Trustor agrees that any controversy arising under or in relation to this Deed of Trust shall be litigated exclusively in the jurisdiction where the Land is located (the "Property Jurisdiction "). The state and federal courts and authorities with jurisdiction in the Property Jurisdiction shall have exclusive jurisdiction over all controversies which shall arise under or in relation to the 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 {S:BRKWD /0001 /DED /01106472.DOCX} 19 •: the provisions herein contained. In this Deed of Trust, whenever the context so requires, the singular number includes the plural. 10.7 Waiver, Modification and Amendment. Any waiver by Beneficiary of any obligation of Trustor hereunder must be in writing, and no waiver shall be construed as a continuing waiver. No waiver shall be implied from any delay or failure by Beneficiary or Trustee to take action on account of any default of Trustor. Consent by Beneficiary or Trustee to any act or omission by Trustor shall not be construed as a consent to any other or subsequent act or omission or to waive the requirement for Beneficiary's or Trustee's consent to be obtained in any future or other instance. No amendment to or modification of this Deed of Trust shall be effective unless and until such amendment or modification is in writing, executed by Trustor and Beneficiary. Without limiting the generality of the foregoing, Beneficiary's acceptance of payment of any sum secured hereby after its due date shall not constitute a waiver by Beneficiary of its right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. 10.8 Action by Beneficiary. Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, or consent by the Beneficiary is required or permitted under this Agreement, such action shall be in writing, and such action may be given, made or taken by Beneficiary's City Manager or by any person who shall have been designated by Beneficiary's City Manager, without further approval by the governing board of Beneficiary. 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. IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the date first written above. TRUSTOR: BROOKWOOD EQUITIES LLC, a Delaware limited liability company By: BROOKWOOD GROUP, INC., a California corporation, its Manager an Shepherd Heery Chairman and Chief Executive Officer {S:BRKWD /0001 /DED /01106472.DOCX} 2 0 169 SIGNATURES MUST BE NOTARIZED STATE OF CALIFORNIA ) COUNTY OF SAN MATEO ) On , 2015, 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 STATE OF CALIFORNIA ) COUNTY OF SAN MATEO ) (Seal) On , 2015, 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) {S:BRKWD /0001 /DED /01106472.DOCX} 21 170 Exhibit A LAND (Attach legal description.) {S:BRKWD /0001 /DED /01106472.DOCX}22 171 DDA Exhibit F -1 Form of Linden Regulatory Agreement 172 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: City Manager 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 CITY OF SOUTH SAN FRANCISCO and BROOKWOOD EQUITIES LLC {S: /BRKWD/ 0001 /AGR /01105922.DOCX } {S: /BRKWD /0001 /AGR /01105922.DOCX }2554454.2 173 This Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants (this "Agreement ") is entered into effective as of , 2015 ( "Effective Date ") by and between the City of South San Francisco, a municipal corporation ( "City ") and Brookwood Equities LLC, a Delaware limited liability company ( "Owner "). City and Owner are hereinafter collectively referred to as the "Parties." RECITALS A. Owner owns that certain real property located in the City of South San Francisco at 418 Linden Avenue, known as San Mateo County Assessor's Parcel Nos. 012 - 314 -010 and more particularly described in Exhibit A -1 attached hereto (the "Property "). Owner intends to create or has created a special purpose entity known as Brookwood Linden Venture LLC ( "BLV ") for the Linden Avenue Property to serve as the ownership entity for the Property. For purposes of this Agreement and where the context warrants, a reference to Owner shall be to BLV for the Linden Avenue Property once such entity has been formed and assumes the obligations of Brookwood Equities LLC for the Property and to Permitted Affiliates or other transferees permitted under the DDA defined below. B. Owner intends to construct, own and operate a mixed -use, multi - family residential project (the "Linden Project ") on the Property in accordance with that certain Disposition and Development Agreement executed by and between the Parties and others dated as of the date hereof (the "DDA "), a memorandum of which shall be recorded substantially concurrently herewith in the Official Records of San Mateo County ( "Official Records "). Capitalized terms used and not defined in this Agreement have the meaning ascribed to them in the DDA. C. The DDA provides that for a period of not less than fifty -five (55) years, twenty percent (20 %) of the residential units in the Linden Project shall be rented at Affordable Rents to Eligible Households. D. Subject to the conditions set forth in the DDA, City has agreed to provide to Owner a grant in the amount of Four Hundred Thirty -Five Thousand Dollars ($435,000) from City Affordable Housing In -Lieu Fees for Linden Project predevelopment activities on the Linden Avenue Property in order to provide partial financing for Linden Project (the "City Affordable Housing Grant "). E. In addition, as further described in the DDA, and in order to assist in the construction of affordable units, the City is providing Owner a grant in the amount of Seven Hundred Eighty Thousand Dollars ($780,000) from Affordable Housing Bond Proceeds to partially finance the Linden Project on the Linden Avenue Property ( "Linden Grant "). Certain of the grant proceeds have been provided to Owner pursuant to the terms of the executed Exclusive Negotiation Rights Agreement ( "ENRA ") for initial predevelopment expenses and the remainder of the grant proceeds will be provided pursuant to the DDA in order to assist with the completion of predevelopment activities and if any funds remain, toward construction of the Linden Project. The Linden Grant and the Affordable Housing Grant are hereinafter collectively referred to as the "City Grants." F. As a condition to its agreement to provide the City Grants, the City requires the 2554454.2 tS: /BRKWD/ 0001 /AGR /01105922.DOCX }tS: /BRKWD /0001 /AGR /01105922.DOCX }2 174 Property to be subject to the terms, conditions and restrictions set forth herein. The City requires residential rental units assisted with funds from the City's low- and moderate - income housing fund to remain affordable for the longest feasible time. F. As a condition to its agreement to provide the City Grants, the City also requires the construction of the Linden Project to comply with the requirements of the South San Francisco Municipal Code Chapter 20.380. G. 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 Linden Project's Restricted Units for the benefit of the Linden 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. Additional terms are defined in the Recitals and text of this Agreement. "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) and as defined below: Studio — 1 person One Bedroom — 1.5 people Two Bedroom — 3 people Three Bedroom — 4.5 people "Affordable Rent" means the following amounts, less a utility allowance and such other adjustments as required pursuant to the CRL: (i) for units that are restricted for rental to households with incomes of not more than eighty percent (80 %) of AMI ( "80% Units "), a monthly rent that does not exceed one - twelfth (1/12) of thirty percent (30 %) of eighty percent (80 %) of AMI, Adjusted for Family Size Appropriate for the Unit, and (ii) for units that are restricted for rental to households with incomes of not more than one hundred twenty percent (120 %) of AMI ( "120% Units "), a monthly rent that does not exceed one - twelfth of thirty percent (30 %) of one hundred twenty percent (120 %) of Area Median Income, Adjusted for Family Size Appropriate for the Unit. "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 2554454.2 tS: /BRKWD/ 0001 /AGR /01105922.DOCX }tS: /BRKWD /0001 /AGR /01105922.DOCX }3 175 Act of 1937 and as published from time to time by the State of California Department of Housing and Community Development ( "HCD ") in Section 6932 of Title 25 of the California Code of Regulations or successor provision published pursuant to California Health and Safety Code Section 50093(c). "Claims" is defined in Section 10. "Eligible Household" means a household for which gross household income does not exceed the applicable maximum income level for a Restricted Unit as specified in Section 2.1 and Exhibit B. "Indemnitees" is defined in Section 10. "Low- Income" or "Lower Income" means an annual gross household income that is less than or equal to the qualifying limits for households of Lower Income adjusted for actual household size, as determined periodically by HUD on the basis of gross annual household income and published by HCD in the Regulations for San Mateo County. If HUD ceases to make such determination, "Lower Income" shall be defined as not greater than 80% of Area Median Income adjusted for actual household size, as published by HCD in the Regulations. If both HCD and HUD cease to make such determinations, City in its reasonable discretion may designate another definition of "Lower Income" used by any other federal or state agency so long as such definition is no more restrictive than that set forth herein. "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 Title 25 of the California Code of Regulations. "Rent- Restricted" means a dwelling unit for which the gross rent charged for such unit does not exceed the Affordable Rent, as adjusted for assumed household size in accordance with the Department of Housing and Community Development ( "HCD ") guidelines. "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 Sections 2.1 and 2.2 and Exhibit B. 2. Use and Affordability 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 DDA 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 City. For purposes of this Agreement and where the context warrants, a reference to Owner shall be to BLV for the Linden Avenue Property once such entity has been formed and assumes the obligations of Brookwood Equities LLC for the Property and to Permitted Affiliates or other transferees 2554454.2 tS: /BRKWD/ 0001 /AGR /01105922.DOCX }tS: /BRKWD /0001 /AGR /01105922.DOCX }4 176 permitted under the DDA. 2.1 Affordability Requirements. 2.1.1 Linden Avenue Property_ For a term of fifty -five (55) years commencing upon the date of issuance of a final certificate of occupancy for the Linden Project on the Linden Avenue Property, not less than six (6) of the residential units on the Linden Avenue Property shall be both Rent Restricted (as defined below) and occupied (or if vacant, available for occupancy) available at Affordable Rents to Eligible Households whose income is no greater than eighty percent (80 %) of Area Median Income, and no fewer than two (2) additional units in the Linden Project shall be both Rent Restricted and occupied (or if vacant, available for occupancy) available at Affordable Rents to Eligible Households whose income is no greater than one hundred twenty percent (120 %) of Area Median Income. 2.1.2 Recertification. In the event that recertification of Eligible Household incomes indicates that the number of Restricted Units actually occupied by Eligible Households falls below the number reserved for each income group as specified in this Section 2.1 and Exhibit B, Owner shall rectify the condition by renting the next available dwelling unit(s) in the Linden Project to Eligible Household(s) until the required income mix is achieved. 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 and Exhibit B. Notwithstanding the foregoing, no Eligible Household qualifying for a Restricted Unit shall be denied continued occupancy of a unit in the Linden Project because, after admission, such Eligible Household'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 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 - Restricted. If upon recertification of Eligible Household incomes, Owner determines that a Eligible Household has a household income exceeding the maximum qualifying income for such Eligible Household's unit, the Eligible Household shall be permitted to continue to occupy the unit, and upon expiration of the Eligible Household's lease and upon sixty (60) days' written notice, Owner may increase the rent for such unit to the fair market rent, and Owner shall rent the next available unit to a Eligible Household whose household income does not exceed the applicable income limit in order to achieve the affordability requirements of this Agreement. 2.3 Notice of Affordability Restrictions on Transfer of Property. The Parties 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. 2.4 Unit Sizes, Design and Location. The Restricted Units shall be of comparable design quality as unrestricted units in the Linden Project. Eligible Households of Restricted 2554454.2 tS: /BRKWD/ 0001 /AGR /01105922.DOCX }tS: /BRKWD /0001 /AGR /01105922.DOCXi5 177 Units shall have access to all common facilities of the Linden Project equal to that of Eligible Households of units in the Linden Project that are not Restricted Units. The Restricted Units shall be allocated among affordability categories as set forth in Exhibit B. 2.5 Reserved. 2.6 No Condominium Conversion. Owner shall not convert the residential units in the Linden Project to condominium or cooperative ownership or sell condominium or cooperative rights to the residential portion of the Linden Project or any part thereof for at least ten (10) years from the date of the Agreement, and provided Owner obtains the City's consent and meets the affordability requirements of Section 2.1. City's prior written consent shall be required with respect to the sale or condominium conversion of the retail /commercial portion of the Linden Project or any part thereof. 2.7 Non - Discrimination, Compliance with Fair Housing Laws. 2.7.1 Preferences. In order to ensure that there is an adequate supply of affordable housing within the City for City residents and employees of businesses located within the City, to the extent permitted by law and consistent with the program regulations for funding sources used for development of the Linden Project, at initial lease up, Owner shall give a preference in the rental of the residential units in the Linden Project to Eligible Households that include at least one member who lives or works in the City. If there are fewer Eligible Households than the number of such units, the units will be made available to the general public. Notwithstanding the foregoing, in the event of a conflict between this provision and the provisions of Section 42 of the Internal Revenue Code of 1986, as amended, the provisions of such Section 42 shall control. 2.7.2 Fair Housing. Owner shall comply with state and federal fair housing laws in the marketing and rental of the units in the Linden Project. Owner shall accept as Eligible Households, on the same basis as all other prospective Eligible Households, persons who are recipients of federal certificates or vouchers for rent subsidies pursuant to the existing Section 8 program or any successor thereto. 2.7.3 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 Eligible Households, lessees, subEligible Households, sublessees or vendees in, of, or for the Property or part thereof. Owner shall include such provision in all 2554454.2 tS: /BRKWD/ 0001 /AGR /01105922.DOCX }tS: /BRKWD /0001 /AGR /01105922.DOCX }6 178 deeds, leases, contracts and other instruments executed by Owner, and shall enforce the same diligently and in good faith. 3. Reporting Requirements. 3.1. Eligible Household 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 City may reasonably require: (a) The identity of each household member; and (b) The total gross household income; Owner shall retain such certificates for not less than three (3) years, and upon City's request, shall provide copies of such certificates to City and make the originals available for City inspection. 3.2 Annual Report, Inspections. By not later than April 30th of each year during the term of this Agreement, Owner shall submit an annual report ( "Annual Report ") to the City in form satisfactory to City, together with a certification that the Linden 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 Linden 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 of residents; (vii) documentation of source of household income; and (viii) the information required by Sertinn 3 1 Owner shall include with the Annual Report, an income recertification for each household, documentation verifying Eligible Household eligibility, and such additional information as City 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 City; provided however, during such time that the Linden 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, Owner may satisfy the requirements of this Section by providing City with a copy of compliance reports required in connection with such financing. Owner shall permit representatives of City to enter and inspect the Property and the Linden 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. 3.3 On -site Inspection. Owner shall permit representatives of City to enter and inspect the Property and the Linden 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. 2554454.2 tS: /BRKWD/ 0001 /AGR /01105922.DOCX }tS: /BRKWD /0001 /AGR /01105922.DOCX }7 179 3.4 Additional Information. Owner shall provide any additional information reasonably requested by City. The City shall have the right to examine and make copies of all books, records, or other documents of the Owner which pertain to the Linden Project during Owner's regular business hours. 3.5 Records. The Owner shall maintain complete, accurate and current records pertaining to the Linden Project, and shall permit any duly authorized representative of the City to inspect records, including records pertaining to income and household size of Eligible Households. All Eligible Household lists, applications and waiting lists relating to the Linden Project shall at all times be kept separate and identifiable from any other business of the Owner and shall be maintained as required by the City in a reasonable condition for proper audit and subject to examination during business hours by representatives of the City. The Owner shall retain copies of all materials obtained or produced with respect to occupancy of the Restricted Units for a period of at least five (5) years, and for any period during which there is an audit undertaken by the City pursuant to the DDA. 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 Linden Project, unless the term is extended by mutual 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 Linden Project or any part thereof or interest therein, (ii) any payment, prepayment or extinguishment of the City Note, or (iii) any reconveyance of the City 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 prerequisite to the termination of this Agreement upon the expiration of the term as such may 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 Linden Project to the covenants and restrictions set forth in this Agreement. The Parties hereby declare their express intent that the covenants and restrictions set forth herein shall be deemed covenants running with the land and shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest, transferees, and assigns of the Parties, regardless of any sale, assignment, conveyance or transfer of the Property, the Linden 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 Linden Project (other than the Eligible Households of the individual dwelling units or retail/commercial space within the Linden 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 Linden Project or any part thereof, shall conclusively be held to have been executed, delivered and accepted subject to the covenants, restrictions, duties and obligations set forth herein, regardless of whether such 2554454.2 tS: /BRKWD/ 0001 /AGR /01105922.DOCX }tS: /BRKWD /0001 /AGR /01105922.DOCX }8 •' 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 City 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 and for its successors that in the event that a court of competent jurisdiction determines that the covenants herein do not run with the land, such covenants shall be enforced as equitable servitudes against the Property and the Linden Project in favor of City. 6. Property Management, Repair and Maintenance, Marketing. 6.1 Management Responsibilities. Owner shall be responsible for all management functions with respect to the Property and the Linden Project, including without limitation the selection of Eligible Households, certification and recertification of household income and eligibility, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. City shall have no responsibility for management or maintenance of the Property or the Linden Project. 6.2 Repair, Maintenance and Security. Throughout the term of this Agreement, Owner shall at its own expense, maintain the Property and the Linden 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 Linden Project and the Property (including without limitation, the residential units, common areas, meeting rooms, 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 Linden Project. Owner shall prevent and /or rectify any physical deterioration of the Property and the Linden 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 Linden Project. 6.2.1 Citv'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 thirty (30) days after written notice from City (with respect to graffiti, debris, and waste material) or thirty (30) days after written notice from City (with respect to landscaping, building improvements and general maintenance), then City, in addition to any other remedy it may 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. 6.2.2 Costs. All costs expended by City in connection with the foregoing, shall constitute an indebtedness secured by the City Deed of Trust, and shall be paid by Owner to City upon demand. All such sums remaining unpaid thirty (30) days following delivery of City's invoice therefor shall bear interest at the lesser of 6% per annum or the highest rate permitted by 2554454.2 tS: /BRKWD/ 0001 /AGR /01105922.DOCX }tS: /BRKWD /0001 /AGR /01105922.DOCX }9 181 applicable law. Notwithstanding anything to the contrary set forth in this Section, City 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. 6.3 Marketing and Management Plan. Within 180 days following the Effective Date of this Agreement, Owner shall submit for City review and approval, a plan for marketing and managing 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 Eligible Household selection criteria, and how Owner plans to certify the eligibility of Eligible Households. The Plan shall also describe the management team and shall address how the Owner and the management entity plan to manage and maintain the Property and the Linden Project. The Plan shall include the proposed management agreement and the form of rental agreement that Owner proposes to enter into with Linden Project Eligible Households. Owner shall abide by the terms of the Marketing and Management Plan in marketing, managing, and maintaining the Property and the Linden Project, and throughout the term of this Agreement. 6.4 Approval of Amendments. If City 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 thirty (30) days following City's receipt of such plan, proposal or amendment, the plan, proposal or amendment shall be deemed approved by City. 6.5 Fees, Taxes, and Other Levies. Owner shall be responsible for payment of all fees, assessments, taxes, charges, liens and levies applicable to the Property or the Linden 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. Nothing in this Section 6.5 is intended to prohibit Owner from applying for any exemption from property taxes and fees that may be available to the owners of low- income housing. 6.6 Insurance Coverage. Throughout the term of this Agreement Owner shall comply with the insurance requirements set forth in the DDA with respect to the Property, and shall, at Owner's expense, maintain in full force and effect insurance coverage as specified in the DDA. 6.7 Property Damage or Destruction. If any part of the Linden 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 as soon as reasonably practicable 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, if lenders or low- income housing tax credit investors providing financing for the Linden Project impose requirements that differ from the requirements of this Section, the requirements of such lenders and investors shall prevail. 2554454.2 tS: /BRKWD/ 0001 /AGR /01105922.DOCX }tS: /BRKWD /0001 /AGR /01105922.DOCX }1 0 182 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 City, 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 Linden Project. If at the time this Agreement is recorded, any interest, lien, or encumbrance has been recorded against the Linden Project in position superior to this Agreement, upon the request of City, 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 City may reasonably request. Notwithstanding the foregoing, the City agrees that pursuant to Health and Safety Code Section 33334.14(a)(4), the City 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 DDA, provided that the instruments effecting such subordination include reasonable protections to the City in the event of default consistent with the requirements of Health and Safety Code Section 33334.14(a)(4), including without limitation, extended notice and cure rights. 8. Transfer and Encumbrance. 8.1 Restrictions on Transfer and Encumbrance. During the term of this Agreement, except for Permitted Transfers to Permitted Affiliates, defined herein, and except as permitted pursuant to the DDA or this Agreement, Owner shall not directly or indirectly, voluntarily, involuntarily or by operation of law make or attempt any total or partial sale, transfer, conveyance, assignment or lease (collectively, "Transfer ") of the whole or any part of the Property, the Linden Project, or the improvements located on the Property, without the prior written consent of the City, 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 DDA, Owner shall not undergo any significant change of ownership without the prior written approval of City. For purposes of this Agreement, a "significant change of ownership" shall mean a transfer of the beneficial interest of more than forty percent (40 %) in aggregate of the present ownership and /or control of Owner, taking all transfers into account on a cumulative basis; provided however, neither the admission of an investor limited partner, member or other equity partner, nor the transfer by such investor to subsequent limited partners, members or other equity partners shall be restricted by this provision. 8.2 Permitted Transfers. Notwithstanding any contrary provision hereof, the prohibitions on Transfer set forth herein shall not be deemed to prevent the following ('Permitted Transfers "): (i) the granting of easements or permits to facilitate development of the Property; (ii) the dedication of any property required pursuant to the DDA; (iii) the lease of individual dwelling units to Eligible Households for occupancy as their principal residence in accordance with this Agreement and the lease of commercial space to retail and commercial Eligible Households, if applicable; (iv) assignments creating security interests for the purpose of financing the acquisition, construction, or permanent financing of the Linden Project or the Property in accordance with the DDA, or Transfers directly resulting from the foreclosure of, or granting of a deed in lieu of foreclosure of, such a security interest; or (v) a Transfer to BLV or other entity which is under the direct control of Owner so long as Owner is the managing 2554454.2 tS: /BRKWD/ 0001 /AGR /01105922.DOCX }tS: /BRKWD /0001 /AGR /01105922.DOCX }1 1 183 member of such entity and maintains at least five percent (5 %) equity interest in each such entity ( "Permitted Affiliate "). In addition, City shall not withhold its consent to the sale, transfer or other disposition of the Linden Project, in whole or in part, provided that (1) the Linden Project is and shall continue to be operated in compliance 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 City with respect to the assumption of the Owner's obligations under this Agreement, and upon City's and /or Agency's request, delivers to the City an 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 Linden 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 City's City Manager unless the City Manager, in his or her discretion, refers the matter of approval to the City's governing board. If a proposed Transfer has not been approved by City in writing within thirty (30) days following City's receipt of written request by Owner, it shall be deemed rejected. Owner shall reimburse City for all City 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 City's and /or 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 instruments and any applicable subordination agreement recorded against the Property , the Linden Project or part thereof for the benefit of a lender other than City ("Third - Party Lender ") shall contain each of the following provisions: (i) Third -Party Lender shall use its best efforts to provide to City a copy of any notice of default issued to Owner concurrently with provision of such notice to Owner; (ii) City shall have the reasonable right, but not the obligation, to cure any default by Owner within the same period of time provided to Owner for such cure extended by an additional 30 days; (iii) provided that City has cured any default under Third -Party Lender's deed of trust and other loan documents, City shall have the right to foreclose City's Deed of Trust without acceleration of Third -Party Lender's debt. Owner agrees to provide to City a copy of any notice of default Owner receives from any Third -Party Lender within thirty (30) 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 Linden 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 2554454.2 tS: /BRKWD /0001 /AGR/01105922. DOCX} tS: /BRKWD /0001 /AGR/01105922. DOCX} 12 •M that a violation of this Agreement has occurred, City shall give written notice to the holders of record of any mortgages or deeds of trust encumbering the Linden 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 Linden Project as required hereunder, and the failure of Owner to cure such default within thirty (30) days; (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 Linden Project or failure to pay any other charge that may result in a lien on the Property or the Linden Project, and Owner's failure to cure such default within thirty (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) A default arises under the DDA, the City Note, the City Deed of Trust, or any other City Document or Agency Document (as defined in the DDA) and remains uncured beyond the expiration of all applicable cure periods. (f) Owner's default in the performance of any term, provision or covenant under this Agreement (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 (3 0) days in the event of a non - monetary default following the date upon which City 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 notice of default. 9.2 Remedies. Upon the occurrence of an Event of Default and its continuation beyond any applicable cure period, City 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 City Note and interest accrued thereon immediately due and payable and proceed with foreclosure under the City Deed 2554454.2 tS: /BRKWD/ 0001 /AGR /01105922.DOCX }tS: /BRKWD /0001 /AGR /01105922.DOCX }1 3 185 of Trust; C. For violations of obligations with respect to rents for Restricted Units, impose as liquidated 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 City 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 expressly provided in this Agreement. 10. Indemnity. To the fullest extent permitted by law, Owner shall indemnify, defend (with counsel approved by City) and hold City and its 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 indirectly, in whole or in part, as a result of or in connection with Owner's construction, management, or operation of the Property and the Linden 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 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, or the deposit with City by Owner, of any of the insurance policies described in this Agreement or the DDA. 11. Miscellaneous. 11.1 Amendments. This Agreement may be amended or modified only by a written instrument signed by both Parties. 11.2 No Waiver. Any waiver by City of any term or provision of this Agreement must be in writing. No waiver shall be implied from any delay or failure by City 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 City 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 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: 2554454.2 tS: /BRKWD /0001 /AGR/01105922. DOCX} tS: /BRKWD /0001 /AGR/01105922. DOCX} 14 IM (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; (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 overnight 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. City: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attention: City Manager Facsimile: (650) 829 -6609 Owner: Brookwood Equities LLC One Embarcadero Center, Suite 500 San Francisco, CA 94117 Attn: Shepherd Heery Tel: (415) 402 -0800 Facsimile: (415) 399 -9367 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 as 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 City. Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, consent or request by the City is required or permitted under this Agreement, such action shall be in writing, and such action may be given, made or taken by the City Manager or by any person who shall have been designated by the City Manager, without further approval by the governing board of the City at the discretion of the City Manager. 2554454.2 tS: /BRKWD/ 0001 /AGR /01105922. DOCX} tS: /BRKWD /0001 /AGR /01105922. DOCX} 15 187 11.7 Non - Liability of City Officials, Employees and A _gents. No member, official, employee or agent of the City shall be personally liable to Owner or any successor in interest, in the event of any default or breach by the City, or for any amount of money which may become due to Owner or its successor or for any obligation of City under 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 Governin _g Law. This Agreement shall be construLaw. This Agreement shall be construed in accordance with the laws of the State of California 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 provisions shall not be affected or impaired thereby. 11.13 Entire Agreement, Exhibits. This Agreement, together with the DDA, the City Note, the City Deed of Trust, the Agency Deed of Trust and the other City Documents and Agency Documents 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 Counterparts. This Agreement maybe executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement. 2554454.2 SIGNATURES ON FOLLOWING PAGE. tS: /BRKWD/ 0001 /AGR /01105922.DOCX }tS: /BRKWD /0001 /AGR /01105922.DOCX }1 6 IN WITNESS WHEREOF, the Parties have executed this Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants as of the date first written above. CITY THE CITY OF SOUTH SAN FRANCISCO, a municipal corporation By: Name: Title: ATTEST: By: Krista Martinelli, City Clerk APPROVED AS TO FORM: By: Jason Rosenberg, City Attorney OWNER BROOKWOOD EQUITIES LLC, a Delaware limited liability company By: BROOKWOOD GROUP, INC., a California corporation, its Manager Shepherd Heery Chairman and Chief Executive Officer SIGNATURES MUST BE NOTARIZED. 2554454.2 tS: /BRKWD/ 0001 /AGR /01105922.DOCXttS: /BRKWD /0001 /AGR /01105922.DOCXt17 .= A notary public or, other officer, completing this certificate verifies only the identity of the individual who signed the document to !which this certificate is attached, and not the truthfulness„ accuracy, or validity of that document. STATE OF CALIFORNIA ) COUNTY OF 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) 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) A notary public or, other officer, completing this certificate verifies only the identity of the individual who signed the document to !which this certificate is attached, and not the truthfulness„ accuracy, or validity of that document. STATE OF CALIFORNIA ) COUNTY OF 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) 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. 2554454.2 tS: /BRKWD/ 0001 /AGR /01105922.DOCX }tS: /BRKWD /0001 /AGR /01105922.DOCX }1 8 190 WITNESS my hand and official seal. Signature (Seal) 2554454.2 tS: /BRKWD/ 0001 /AGR /01105922.DOCX }tS: /BRKWD /0001 /AGR /01105922.DOCX }1 9 191 Exhibit A -1 LINDEN AVENUE PROPERTY (Attach legal description.) 2554454.2 tS: /BRKWD/ 0001 /AGR /01105922.DOCXttS: /BRKWD /0001 /AGR /01105922.DOCXt2 0 192 Exhibit B Number of Units by Unit Size and Targeted Area Median Income (AMI) Levels Linden Avenue Property Maximum Household Income 80% AMI 120% AMI Total Studio 1 0 1 1- Bedroom 3 3 2- Bedroom 2 1 3 3- Bedroom 0 1 1 Total 6 2 8 2554454.2 tS: /BRKWD/ 0001 /AGR /01105922.DOCXttS: /BRKWD /0001 /AGR /01105922.DOCXt2 1 193 Exhibit C RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: City Manager 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 , 2015 with reference to that certain real property located at 418 Linden Avenue, known as San Mateo County Assessor's Parcel Nos. 012 - 314 -010 and more particularly described in Exhibit A -1 attached hereto (the "Linden Avenue Property" or the "Property ") 1. The City of South San Francisco, a municipal corporation ("City"), the Successor Agency to the Redevelopment Agency of the City of South San Francisco ( "Agency ") and Brookwood Equities LLC, a Delaware limited liability company ( "Owner ") have entered into that certain Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants (the "Regulatory Agreement ") dated as of the date hereof and recorded in the Official Records of San Mateo County substantially concurrently herewith. Unless otherwise defined herein, capitalized terms shall have the meanings set forth in the Regulatory Agreement for the Linden Avenue Property. 2. The Regulatory Agreement requires not less than six (6) of the residential units in the Linden Project on the Linden Avenue Property shall be rented at affordable rents to households whose income is no greater than eighty percent (80 %) of Area Median Income and no fewer than two (2) additional units in the Linden Project on the Linden Avenue Property shall be rented at affordable rents to households whose income is no greater than one hundred twenty percent (120 %) of Area Median Income, as more particularly set forth in the Regulatory Agreement. 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 the Linden 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. 2554454.2 tS: /BRKWD/ 0001 /AGR /01105922.DOCX }tS: /BRKWD /0001 /AGR /01105922.DOCX }2 2 194 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 City, Agency and the current owner of the Property. IN WITNESS WHEREOF, City and Owner have executed this Notice as of the date first written above. CITY: CITY OF SOUTH SAN FRANCISCO, A MUNICIPAL CORPORATION By: Name: Title: ATTEST: By: Krista Martinelli, City Clerk APPROVED AS TO FORM: Jason Rosenberg, City Attorney OWNER: BROOKWOOD EQUITIES LLC, a Delaware limited liability company By: BROOKWOOD GROUP, INC., a California corporation, its Manager Un Shepherd Heery Chairman and Chief Executive Officer SIGNATURES MUST BE NOTARIZED. 2554454.2 tS: /BRKWD/ 0001 /AGR /01105922.DOCXttS: /BRKWD /0001 /AGR /01105922.DOCXt2 3 195 Exhibit A -1 LINDEN AVENUE PROPERTY (Attach legal description.) 2554454.2 tS: /BRKWD/ 0001 /AGR /01105922.DOCXttS: /BRKWD /0001 /AGR /01105922.DOCXt2 4 196 EXHIBIT B AFFORDABILITY REQUIREMENTS Linden Avenue Property Maximum Household Income 80% AMI 120% AMI Total Studio 1 0 1 1- Bedroom 3 3 2- Bedroom 2 1 3 3- Bedroom 0 1 1 Total 6 2 8 2554454.2 tS: /BRKWD/ 0001 /AGR /01105922.DOCXttS: /BRKWD /0001 /AGR /01105922.DOCXt2 cJ 197 DDA Exhibit F -2 Form of Grand - Cypress Agency Regulatory Agreement .• RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: City Manager 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 CITY OF SOUTH SAN FRANCISCO and BROOKWOOD EQUITIES LLC tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD /0001 /AGR /01106028.DOC Xl {S: /BRKWD/ 0001 /AGR /01106028.DOCX1 {S: /BRKWD /0001 /AGR /01106028.DOCX }2554454.2 199 This Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants (this "Agreement ") is entered into effective as of , 2015 ( "Effective Date ") by and between the City of South San Francisco, a municipal corporation ( "City ") as Housing Successor to the former Redevelopment Agency to the City of South San Francisco and Brookwood Equities LLC, a Delaware limited liability company ( "Owner "). City and Owner are hereinafter collectively referred to as the "Parties." RECITALS A. Owner owns that certain real property located in the City of South San Francisco at 418 Grand - Cypress Avenue, located at 201 -219 Grand Avenue, known as San Mateo County Assessor's Parcel Nos. 012 -316 -110, 012 - 316 -100, 012 -316 -090 and 012 -316 -080 and more particularly described in Exhibit A -1 attached hereto (the "Grand- Cypress Avenue Property" or, the "Property "). Owner intends to create or has created a special purpose entity known as Brookwood Cypress Venture LLC ( "BCV ") for the Grand - Cypress Avenue Property to serve as the ownership entity for the Property. For purposes of this Agreement and where the context warrants, a reference to Owner shall be to BCV for the Grand - Cypress Avenue Property once such entity has been formed and assumes the obligations of Brookwood Equities LLC for the Property and to Permitted Affiliates or other transferees permitted under the DDA defined below. B. Owner intends to construct, own and operate a mixed -use, multi - family residential project (the "Grand- Cypress Project ") on the Property in accordance with that certain Disposition and Development Agreement executed by and between the Parties and others dated as of the date hereof (the "DDA "), a memorandum of which shall be recorded substantially concurrently herewith in the Official Records of San Mateo County ( "Official Records "). Capitalized terms used and not defined in this Agreement have the meaning ascribed to them in the DDA. C. The DDA provides that for a period of not less than fifty -five (55) years, twenty percent (20 %) of the residential units in the Grand - Cypress Project shall be rented at Affordable Rents to Eligible Households. D. In addition, as further described in the DDA, and in order to assist in the construction of affordable units, the City is providing Owner a grant in the amount of Nine Hundred Twenty Thousand Dollars ($920,000) from Affordable Housing Bond Proceeds to partially finance the Grand - Cypress Project on the Grand - Cypress Avenue Property ( "City Grant "). Certain of the grant proceeds have been provided to Owner pursuant to the terms of the executed Exclusive Negotiation Rights Agreement ( "ENRA ") for initial predevelopment expenses and the remainder of the grant proceeds will be provided pursuant to the DDA in order to assist with the completion of predevelopment activities and if any funds remain, toward construction of the Grand - Cypress Project. F. As a condition to its agreement to provide the City Grants, the City requires the Property to be subject to the terms, conditions and restrictions set forth herein. The City requires residential rental units assisted with funds from the City's low- and moderate - income housing fund to remain affordable for the longest feasible time. tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD /0001 /AGR /01106028.DOC x }2 2554826.1 200 F. As a condition to its agreement to provide the City Grants, the City also requires the construction of the Grand - Cypress Project to comply with the requirements of the South San Francisco Municipal Code Chapter 20.380. G. 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 Grand - Cypress Project's Restricted Units for the benefit of the Grand- Cypress 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. Additional terms are defined in the Recitals and text of this Agreement. "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) and as defined below: Studio — 1 person One Bedroom — 1.5 people Two Bedroom — 3 people Three Bedroom — 4.5 people "Affordable Rent" means the following amounts, less a utility allowance and such other adjustments as required pursuant to the CRL: (i) for units that are restricted for rental to households with incomes of not more than eighty percent (80 %) of AMI ( "80% Units "), a monthly rent that does not exceed one - twelfth (1/12) of thirty percent (30 %) of eighty percent (80 %) of AMI, Adjusted for Family Size Appropriate for the Unit, and (ii) for units that are restricted for rental to households with incomes of not more than one hundred twenty percent (120 %) of AMI ( "120% Units "), a monthly rent that does not exceed one - twelfth of thirty percent (30 %) of one hundred twenty percent (120 %) of Area Median Income, Adjusted for Family Size Appropriate for the Unit. "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 Housing and Community Development ( "HCD ") in Section 6932 of Title 25 of the California Code of Regulations or successor provision published pursuant to California Health and tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD /0001 /AGR /01106028.DOC x }3 2554826.1 201 Safety Code Section 50093(c). "Claims" is defined in Section 10. "Eligible Household" means a household for which gross household income does not exceed the applicable maximum income level for a Restricted Unit as specified in Section 2.1 and Exhibit B. "Indemnitees" is defined in Section 10. "Low- Income" or "Lower Income" means an annual gross household income that is less than or equal to the qualifying limits for households of Lower Income adjusted for actual household size, as determined periodically by HUD on the basis of gross annual household income and published by HCD in the Regulations for San Mateo County. If HUD ceases to make such determination, "Lower Income" shall be defined as not greater than 80% of Area Median Income adjusted for actual household size, as published by HCD in the Regulations. If both HCD and HUD cease to make such determinations, City in its reasonable discretion may designate another definition of "Lower Income" used by any other federal or state agency so long as such definition is no more restrictive than that set forth herein. "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 Title 25 of the California Code of Regulations. "Rent- Restricted" means a dwelling unit for which the gross rent charged for such unit does not exceed the Affordable Rent, as adjusted for assumed household size in accordance with the Department of Housing and Community Development ( "HCD ") guidelines. "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 Sections 2.1 and 2.2 and Exhibit B. 2. Use and Affordability 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 DDA 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 City. For purposes of this Agreement and where the context warrants, a reference to Owner shall be to BLV for the Grand - Cypress Avenue Property once such entity has been formed and assumes the obligations of Brookwood Equities LLC for the Property and to Permitted Affiliates or other transferees permitted under the DDA. tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD /0001 /AGR /01106028.DOC x }4 2554826.1 202 2.1 Affordability Requirements. 2.1.1 Grand - Cypress Avenue Property, For a term of fifty -five (55) years commencing upon the date of issuance of a final certificate of occupancy for the Grand - Cypress Project on the Grand - Cypress Avenue Property, not less than eight (8) of the residential units on the Grand - Cypress Avenue Property shall be both Rent Restricted (as defined below) and occupied (or if vacant, available for occupancy) available at Affordable Rents to Eligible Households whose income is no greater than eighty percent (80 %) of Area Median Income, and no fewer than one (1) additional units in the Grand - Cypress Project shall be both Rent Restricted and occupied (or if vacant, available for occupancy) available at Affordable Rents to Eligible Households whose income is no greater than one hundred twenty percent (120 %) of Area Median Income. 2.1.2 Recertification. In the event that recertification of Eligible Household incomes indicates that the number of Restricted Units actually occupied by Eligible Households falls below the number reserved for each income group as specified in this Section 2.1 and Exhibit B, Owner shall rectify the condition by renting the next available dwelling unit(s) in the Grand - Cypress Project to Eligible Household(s) until the required income mix is achieved. 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 and Exhibit B. Notwithstanding the foregoing, no Eligible Household qualifying for a Restricted Unit shall be denied continued occupancy of a unit in the Grand - Cypress Project because, after admission, such Eligible Household'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 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 - Restricted. If upon recertification of Eligible Household incomes, Owner determines that a Eligible Household has a household income exceeding the maximum qualifying income for such Eligible Household's unit, the Eligible Household shall be permitted to continue to occupy the unit, and upon expiration of the Eligible Household's lease and upon sixty (60) days' written notice, Owner may increase the rent for such unit to the fair market rent, and Owner shall rent the next available unit to a Eligible Household whose household income does not exceed the applicable income limit in order to achieve the affordability requirements of this Agreement. 2.3 Notice of Affordability Restrictions on Transfer of Property. The Parties 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. 2.4 Unit Sizes, Design and Location. The Restricted Units shall be of comparable design quality as unrestricted units in the Grand - Cypress Project. Eligible Households of tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD /0001 /AGR /01106028.DOC x }5 2554826.1 203 Restricted Units shall have access to all common facilities of the Grand - Cypress Project equal to that of Eligible Households of units in the Grand - Cypress Project that are not Restricted Units. The Restricted Units shall be allocated among affordability categories as set forth in Exhibit B. 2.5 Reserved. 2.6 No Condominium Conversion. Owner shall not convert the residential units in the Grand - Cypress Project to condominium or cooperative ownership or sell condominium or cooperative rights to the residential portion of the Grand - Cypress Project or any part thereof for at least ten (10) years from the date of the Agreement, and provided Owner obtains the City's consent and meets the affordability requirements of Section 2.1. City's prior written consent shall be required with respect to the sale or condominium conversion of the retail /commercial portion of the Grand - Cypress Project or any part thereof. 2.7 Non - Discrimination, Compliance with Fair Housing Laws. 2.7.1 Preferences. In order to ensure that there is an adequate supply of affordable housing within the City for City residents and employees of businesses located within the City, to the extent permitted by law and consistent with the program regulations for funding sources used for development of the Grand - Cypress Project, at initial lease up, Owner shall give a preference in the rental of the residential units in the Grand - Cypress Project to Eligible Households that include at least one member who lives or works in the City. If there are fewer Eligible Households than the number of such units, the units will be made available to the general public. Notwithstanding the foregoing, in the event of a conflict between this provision and the provisions of Section 42 of the Internal Revenue Code of 1986, as amended, the provisions of such Section 42 shall control. 2.7.2 Fair Housing. Owner shall comply with state and federal fair housing laws in the marketing and rental of the units in the Grand - Cypress Project. Owner shall accept as Eligible Households, on the same basis as all other prospective Eligible Households, persons who are recipients of federal certificates or vouchers for rent subsidies pursuant to the existing Section 8 program or any successor thereto. 2.7.3 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 Eligible Households, lessees, subEligible Households, sublessees or vendees in, of, or for the Property or part thereof. Owner shall include such provision in all tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD /0001 /AGR /01106028.DOC x16 2554826.1 204 deeds, leases, contracts and other instruments executed by Owner, and shall enforce the same diligently and in good faith. 3. Reporting Requirements. 3.1. Eligible Household 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 City may reasonably require: (a) The identity of each household member; and (b) The total gross household income; Owner shall retain such certificates for not less than three (3) years, and upon City's request, shall provide copies of such certificates to City and make the originals available for City inspection. 3.2 Annual Report, Inspections. By not later than April 30th of each year during the term of this Agreement, Owner shall submit an annual report ( "Annual Report ") to the City in form satisfactory to City, together with a certification that the Grand - Cypress 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 Grand - Cypress 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 of residents; (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 Eligible Household eligibility, and such additional information as City 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 City; provided however, during such time that the Grand - Cypress 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, Owner may satisfy the requirements of this Section by providing City with a copy of compliance reports required in connection with such financing. Owner shall permit representatives of City to enter and inspect the Property and the Grand - Cypress 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. 3.3 On -site Inspection. Owner shall permit representatives of City to enter and inspect the Property and the Grand - Cypress 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. tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD /0001 /AGR /01106028.DOC X }7 2554826.1 205 3.4 Additional Information. Owner shall provide any additional information reasonably requested by City. The City shall have the right to examine and make copies of all books, records, or other documents of the Owner which pertain to the Grand - Cypress Project during Owner's regular business hours. 3.5 Records. The Owner shall maintain complete, accurate and current records pertaining to the Grand - Cypress Project, and shall permit any duly authorized representative of the City to inspect records, including records pertaining to income and household size of Eligible Households. All Eligible Household lists, applications and waiting lists relating to the Grand - Cypress Project shall at all times be kept separate and identifiable from any other business of the Owner and shall be maintained as required by the City in a reasonable condition for proper audit and subject to examination during business hours by representatives of the City. The Owner shall retain copies of all materials obtained or produced with respect to occupancy of the Restricted Units for a period of at least five (5) years, and for any period during which there is an audit undertaken by the City pursuant to the DDA. 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 Grand - Cypress Project, unless the term is extended by mutual 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 Grand - Cypress Project or any part thereof or interest therein, (ii) any payment, prepayment or extinguishment of the Agency Note, or (iii) any reconveyance of the Agency 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 prerequisite to the termination of this Agreement upon the expiration of the term as such may 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 Grand - Cypress Project to the covenants and restrictions set forth in this Agreement. The Parties hereby declare their express intent that the covenants and restrictions set forth herein shall be deemed covenants running with the land and shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest, transferees, and assigns of the Parties, regardless of any sale, assignment, conveyance or transfer of the Property, the Grand - Cypress 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 Grand - Cypress Project (other than the Eligible Households of the individual dwelling units or retail /commercial space within the Grand - Cypress 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 Grand - Cypress tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD /0001 /AGR /01106028.DOC x18 2554826.1 206 Project or any part thereof, shall conclusively be held to have been executed, delivered and 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 City 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 and for its successors that in the event that a court of competent jurisdiction determines that the covenants herein do not run with the land, such covenants shall be enforced as equitable servitudes against the Property and the Grand - Cypress Project in favor of City. 6. Property Management, Repair and Maintenance, Marketing. 6.1 Management Responsibilities. Owner shall be responsible for all management functions with respect to the Property and the Grand - Cypress Project, including without limitation the selection of Eligible Households, certification and recertification of household income and eligibility, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. City shall have no responsibility for management or maintenance of the Property or the Grand - Cypress Project. 6.2 Repair, Maintenance and Security. Throughout the term of this Agreement, Owner shall at its own expense, maintain the Property and the Grand - Cypress 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 Grand - Cypress Project and the Property (including without limitation, the residential units, common areas, meeting rooms, 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 Grand - Cypress Project. Owner shall prevent and /or rectify any physical deterioration of the Property and the Grand - Cypress 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 Grand - Cypress Project. 6.2.1 City'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 thirty (30) days after written notice from City (with respect to graffiti, debris, and waste material) or thirty (30) days after written notice from City (with respect to landscaping, building improvements and general maintenance), then City, in addition to any other remedy it may 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. tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD /0001 /AGR /01106028.DOC X19 2554826.1 207 6.2.2 Costs. All costs expended by City in connection with the foregoing, shall constitute an indebtedness secured by the City Deed of Trust, and shall be paid by Owner to City upon demand. All such sums remaining unpaid thirty (30) days following delivery of City's invoice therefor shall bear interest at the lesser of 6% per annum or the highest rate permitted by applicable law. Notwithstanding anything to the contrary set forth in this Section, City 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. 6.3 Marketing and Management Plan. Within 180 days following the Effective Date of this Agreement, Owner shall submit for City review and approval, a plan for marketing and managing 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 Eligible Household selection criteria, and how Owner plans to certify the eligibility of Eligible Households. The Plan shall also describe the management team and shall address how the Owner and the management entity plan to manage and maintain the Property and the Grand - Cypress Project. The Plan shall include the proposed management agreement and the form of rental agreement that Owner proposes to enter into with Grand - Cypress Project Eligible Households. Owner shall abide by the terms of the Marketing and Management Plan in marketing, managing, and maintaining the Property and the Grand - Cypress Project, and throughout the term of this Agreement. 6.4 Approval of Amendments. If City 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 thirty (30) days following City's receipt of such plan, proposal or amendment, the plan, proposal or amendment shall be deemed approved by City. 6.5 Fees, Taxes, and Other Levies. Owner shall be responsible for payment of all fees, assessments, taxes, charges, liens and levies applicable to the Property or the Grand - Cypress 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. Nothing in this Section 6.5 is intended to prohibit Owner from applying for any exemption from property taxes and fees that may be available to the owners of low- income housing. 6.6 Insurance Coverage. Throughout the term of this Agreement Owner shall comply with the insurance requirements set forth in the DDA with respect to the Property, and shall, at Owner's expense, maintain in full force and effect insurance coverage as specified in the DDA. 6.7 Property Damage or Destruction. If any part of the Grand - Cypress 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 tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD /0001 /AGR /01106028.DOC X110 2554826.1 m commenced as soon as reasonably practicable 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, if lenders or low- income housing tax credit investors providing financing for the Grand - Cypress Project impose requirements that differ from 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 City, 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 Grand - Cypress Project. If at the time this Agreement is recorded, any interest, lien, or encumbrance has been recorded against the Grand - Cypress Project in position superior to this Agreement, upon the request of City, 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 City may reasonably request. Notwithstanding the foregoing, the City agrees that pursuant to Health and Safety Code Section 33334.14(a)(4), the City 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 DDA, provided that the instruments effecting such subordination include reasonable protections to the City in the event of default consistent with the requirements of Health and Safety Code Section 33334.14(a)(4), including without limitation, extended notice and cure rights. 8. Transfer and Encumbrance. 8.1 Restrictions on Transfer and Encumbrance. During the term of this Agreement, except for Permitted Transfers to Permitted Affiliates, defined herein, and except as permitted pursuant to the DDA or this Agreement, Owner shall not directly or indirectly, voluntarily, involuntarily or by operation of law make or attempt any total or partial sale, transfer, conveyance, assignment or lease (collectively, "Transfer ") of the whole or any part of the Property, the Grand - Cypress Project, or the improvements located on the Property, without the prior written consent of the City, 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 DDA, Owner shall not undergo any significant change of ownership without the prior written approval of City. For purposes of this Agreement, a "significant change of ownership" shall mean a transfer of the beneficial interest of more than forty percent (40 %) in aggregate of the present ownership and /or control of Owner, taking all transfers into account on a cumulative basis; provided however, neither the admission of an investor limited partner, member or other equity partner, nor the transfer by such investor to subsequent limited partners, members or other equity partners shall be restricted by this provision. 8.2 Permitted Transfers. Notwithstanding any contrary provision hereof, the prohibitions on Transfer set forth herein shall not be deemed to prevent the following tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD /0001 /AGR /01106028.DOC X111 2554826.1 209 ( "Permitted Transfers "): (i) the granting of easements or permits to facilitate development of the Property; (ii) the dedication of any property required pursuant to the DDA; (iii) the lease of individual dwelling units to Eligible Households for occupancy as their principal residence in accordance with this Agreement and the lease of commercial space to retail and commercial Eligible Households, if applicable; (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 DDA, or Transfers directly resulting from the foreclosure of, or granting of a deed in lieu of foreclosure of, such a security interest; or (v) a Transfer to BLV or other entity which is under the direct control of Owner so long as Owner is the managing member of such entity and maintains at least five percent (5 %) equity interest in each such entity ( "Permitted Affiliate "). In addition, City shall not withhold its consent to the sale, transfer or other disposition of the Grand - Cypress Project, in whole or in part, provided that (1) the Grand - Cypress Project is and shall continue to be operated in compliance 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 City with respect to the assumption of the Owner's obligations under this Agreement, and upon City's and /or Agency's request, delivers to the City an 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 Grand - Cypress 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 City's City Manager unless the City Manager, in his or her discretion, refers the matter of approval to the City's governing board. If a proposed Transfer has not been approved by City in writing within thirty (30) days following City's receipt of written request by Owner, it shall be deemed rejected. Owner shall reimburse City for all City 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 City's and /or 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 instruments and any applicable subordination agreement recorded against the Property , the Grand - Cypress Project or part thereof for the benefit of a lender other than City ( "Third -Party Lender ") shall contain each of the following provisions: (i) Third -Party Lender shall use its best efforts to provide to City a copy of any notice of default issued to Owner concurrently with provision of such notice to Owner; (ii) City shall have the reasonable right, but not the obligation, to cure any default by Owner within the same period of time provided to Owner for such cure extended by an additional 30 days; (iii) provided that City has cured any default under Third -Party Lender's deed of trust and other loan documents, City shall have the tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD /0001 /AGR /01106028.DOC x} 12 2554826.1 210 right to foreclose City's Deed of Trust without acceleration of Third -Party Lender's debt. Owner agrees to provide to City a copy of any notice of default Owner receives from any Third -Party Lender within thirty (30) 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 Grand - Cypress 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, City shall give written notice to the holders of record of any mortgages or deeds of trust encumbering the Grand - Cypress 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 Grand - Cypress Project as required hereunder, and the failure of Owner to cure such default within thirty (30) days; (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 Grand - Cypress Project or failure to pay any other charge that may result in a lien on the Property or the Grand - Cypress Project, and Owner's failure to cure such default within thirty (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) A default arises under the DDA, the Agency Note, the City Deed of Trust, or any other City Document or Agency Document (as defined in the DDA) and remains uncured beyond the expiration of all applicable cure periods. (f) Owner's default in the performance of any term, provision or covenant under this Agreement (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 (3 0) days in the event of a non - monetary default following the date upon which City 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 tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD /0001 /AGR /01106028.DOC x} 13 2554826.1 211 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 notice of default. 9.2 Remedies. Upon the occurrence of an Event of Default and its continuation beyond any applicable cure period, City 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 Agency Note and interest accrued thereon immediately due and payable and proceed with foreclosure under the City Deed of Trust; C. For violations of obligations with respect to rents for Restricted Units, impose as liquidated 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 City 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 expressly provided in this Agreement. 10. Indemnity. To the fullest extent permitted by law, Owner shall indemnify, defend (with counsel approved by City) and hold City and its 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 indirectly, in whole or in part, as a result of or in connection with Owner's construction, management, or operation of the Property and the Grand - Cypress 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 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, or the deposit with City by Owner, of any of the insurance policies described in this Agreement or the DDA. 11. Miscellaneous. 11.1 Amendments. This Agreement may be amended or modified only by a written instrument signed by both Parties. 11.2 No Waiver. Any waiver by City of any term or provision of this Agreement must tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD /0001 /AGR /01106028.DOC X114 2554826.1 212 be in writing. No waiver shall be implied from any delay or failure by City 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 City 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 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 upon 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 overnight 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. City: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attention: City Manager Facsimile: (650) 829 -6609 Owner: Brookwood Equities LLC One Embarcadero Center, Suite 500 San Francisco, CA 94117 Attn: Shepherd Heery Tel: (415) 402 -0800 Facsimile: (415) 399 -9367 tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD /0001 /AGR /01106028.DOC x} 15 2554826.1 213 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 as 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 City. Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, consent or request by the City is required or permitted under this Agreement, such action shall be in writing, and such action may be given, made or taken by the City Manager or by any person who shall have been designated by the City Manager, without further approval by the governing board of the City at the discretion of the City Manager. 11.7 Non - Liability of City Officials, Employees and Agents. No member, official, employee or agent of the City shall be personally liable to Owner or any successor in interest, in the event of any default or breach by the City, or for any amount of money which may become due to Owner or its successor or for any obligation of City under 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 California without regard to principles of conflicts of law. 1 1.11 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 provisions shall not be affected or impaired thereby. 11.13 Entire Agreement, Exhibits. This Agreement, together with the DDA, the Agency Note, the City Deed of Trust, the Agency Deed of Trust and the other City Documents and Agency Documents 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 Counterparts. This Agreement maybe executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement. tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD /0001 /AGR /01106028.DOC x} 16 2554826.1 214 SIGNATURES ON FOLLOWING PAGE. {S: /BRKWD/ 0001 /AGR /01106028.DOCX } {S: /BRKWD/ 0001 /AGR /01106028.DOCX } {S: /BRKWD /0001 /AGR /01106028.DOC X} 17 2554826.1 215 IN WITNESS WHEREOF, the Parties have executed this Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants as of the date first written above. CITY THE CITY OF SOUTH SAN FRANCISCO, a municipal corporation By: Name: Title: ATTEST: By: Krista Martinelli, City Clerk APPROVED AS TO FORM: By: Jason Rosenberg, City Attorney OWNER BROOKWOOD EQUITIES LLC, a Delaware limited liability company By: BROOKWOOD GROUP, INC., a California corporation, its Manager in Shepherd Heery Chairman and Chief Executive Officer SIGNATURES MUST BE NOTARIZED. 2�5:548I 11001 /AGR /01106028.DOCXttS: /BRKWD/ 0001 /AGR /01106028.DOCXttS: /BRKWD /0001 /AGR /01106028.DOC XttS: /BRKWD/ 0001 /AGR /01106028.DOCXttS: /BRKWD /0001 /AGR /01106028.DOCX }1 8 216 A notary public or, other officer, completing this certificate verifies only the identity of the individual who signed the document to !which this certificate is attached, and not the truthfulness„ accuracy, or validity of that document. STATE OF CALIFORNIA ) COUNTY OF 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) 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) A notary public or, other officer, completing this certificate verifies only the identity of the individual who signed the document to !which this certificate is attached, and not the truthfulness„ accuracy, or validity of that document. STATE OF CALIFORNIA ) COUNTY OF 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) 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. 2�5:548I 11001 /AGR /01106028.DOCX }tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD /0001 /AGR /01106028.DOC X }tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD /0001 /AGR /01106028.DOCX }1 9 217 WITNESS my hand and official seal. Signature (Seal) 2�5:548I 11001 /AGR /01106028.DOCX } {S: /BRKWD/ 0001 /AGR /01106028.DOCX } {S: /BRKWD /0001 /AGR /01106028.DOC X }tS:/ BRKWD / 0001 /AGR /01106028.DOCX }tS: /BRKWD /0001 /AGR /01106028.DOCX }2 0 218 Exhibit A -1 GRAND - CYPRESS AVENUE PROPERTY (Attach legal description.) 2�5:548I 11001 /AGR /01106028.DOCXttS: /BRKWD/ 0001 /AGR /01106028.DOCXttS: /BRKWD /0001 /AGR /01106028.DOC XttS: /BRKWD/ 0001 /AGR /01106028.DOCXttS: /BRKWD /0001 /AGR /01106028.DOCXt2 1 219 Exhibit B Number of Units by Unit Size and Targeted Area Median Income (AMI) Levels Grand - Cypress Avenue Property Maximum Household Income 80% AMI 120% AMI Total Studio 1 0 1 1- Bedroom 4 1 5 2- Bedroom 3 0 3 3- Bedroom 0 0 0 Total 8 1 9 2�5:548I 11001 /AGR /01106028.DOCXttS: /BRKWD/ 0001 /AGR /01106028.DOCXttS: /BRKWD /0001 /AGR /01106028.DOC XttS: /BRKWD/ 0001 /AGR /01106028.DOCXttS: /BRKWD /0001 /AGR /01106028.DOCXt2 2 220 Exhibit C RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: City Manager 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 , 2015 with reference to that certain real property located at 201 -219, 227 Grand Avenue, known as San Mateo County Assessor's Parcel Nos. 012 -316 -110, 012 - 316 -100, 012 -316 -090 and 012 -316 -070 and more particularly described in Exhibit A -1 attached hereto (the "Grand- Cypress Avenue Property "). The Grand - Cypress Avenue Property and the Grand - Cypress Avenue Property are hereinafter collectively referred to as the "Property." 1. The City of South San Francisco, a municipal corporation ( "City"), as Housing Successor to the former Redevelopment Agency of the City of South San Francisco and Brookwood Equities LLC, a Delaware limited liability company ( "Owner ") have entered into that certain Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants (the "Regulatory Agreement ") dated as of the date hereof and recorded in the Official Records of San Mateo County substantially concurrently herewith. Unless otherwise defined herein, capitalized terms shall have the meanings set forth in the Regulatory Agreement for the Grand - Cypress Avenue Property. 2. The Regulatory Agreement also requires not less than eight (8) of the residential units in the Grand - Cypress Project on the Grand - Cypress Avenue Property shall be rented at affordable rents to households whose income is no greater than eighty percent (80 %) of Area Median Income and no fewer than one (1) additional unit in the Grand - Cypress Project on the Grand - Cypress Avenue Property shall be rented at affordable rents to households whose income is no greater than one hundred twenty percent (120 %) of Area Median Income, as more particularly set forth in the Regulatory Agreement. 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 the Grand - Cypress 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 2�5:548I 11001 /AGR /01106028.DOCX }tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD /0001 /AGR /01106028.DOC X }tS: /BRKWD/ 0001 /AGR /01106028.DOCX }tS: /BRKWD /0001 /AGR /01106028.DOCX }2 3 221 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. 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 City and the current owner of the Property. IN WITNESS WHEREOF, City and Owner have executed this Notice as of the date first written above. CITY: CITY OF SOUTH SAN FRANCISCO, A MUNICIPAL CORPORATION By: Name: Title: ATTEST: By: Krista Martinelli, City Clerk APPROVED AS TO FORM: Jason Rosenberg, City Attorney OWNER: BROOKWOOD EQUITIES LLC, a Delaware limited liability company By: BROOKWOOD GROUP, INC., a California corporation, its Manager Shepherd Heery Chairman and Chief Executive Officer SIGNATURES MUST BE NOTARIZED. 2�5:548I 11001 /AGR /01106028.DOCXttS: /BRKWD/ 0001 /AGR /01106028.DOCXttS: /BRKWD /0001 /AGR /01106028.DOC XttS: /BRKWD/ 0001 /AGR /01106028.DOCXttS: /BRKWD /0001 /AGR /01106028.DOCXt2 4 222 Exhibit A -1 GRAND - CYPRESS AVENUE PROPERTY (Attach legal description.) 2�5:548I 11001 /AGR /01106028.DOCXttS: /BRKWD/ 0001 /AGR /01106028.DOCXttS: /BRKWD /0001 /AGR /01106028.DOC XttS: /BRKWD/ 0001 /AGR /01106028.DOCXttS: /BRKWD /0001 /AGR /01106028.DOCXt2 cJ 223 DDA Exhibit G Applicable Laws 224 Fxbibit G APPLICABLE LAWS CURRENT SOUTH SAN FRANCISCO LAWS Developer shall comply with the following City regulations and provisions applicable to the Property as of the Effective Date (except as modified by this Agreement). 1.1 South San Francisco General Plan. The Developer will develop the Project in a manner consistent with the objectives, policies, general land uses and programs specified in the South San Francisco General Plan, as adopted on October 13, 1999 and as amended from time to time. 1.2 Downtown Station Area Specific Plan. The Developer will develop the Project in a manner consistent with the objectives, policies, general land uses and programs specified in the South San Francisco Downtown Station Area Specific Plan, as adopted in January 2015. 1.3 Downtown Station Area Specific Plan Zoning District. The Developer shall construct the Project in a manner consistent with the Downtown Station Area Specific Plan Zoning District applicable to the Project as of the Effective Date (except as modified by this Agreement). 1.4 South San Francisco Municipal Code. The Developer shall construct the Project in a manner consistent with the South San Francisco Municipal Code provisions, as applicable to the Project as of the Effective Date (except as modified by this Agreement). 2. FEES, TAXES, EXACTIONS, DEDICATION OBLIGATIONS, AND ASSESSMENTS Developer agrees that Developer shall be responsible for the payment of the following fees, charges, exactions, taxes, and assessments (collectively, "Assessments "). From time to time, the City may update, revise, or change its Assessments. Further, nothing herein shall be construed to relieve the Property from common benefit assessments levied against it and similarly situated properties by the City pursuant to and in accordance with any statutory procedure for the assessment of property to pay for infrastructure and /or services that benefit the Property. Except as indicated below, the amount paid for a particular Assessment, shall be the amount owed, based on the calculation or formula in place at the time payment is due, as specified below. 2.1 Administrative /Processing Fees. The Developer shall pay the applicable application, processing, administrative, legal and inspection fees and charges, as currently adopted pursuant to City's Master Fee Schedule and required by the City for processing of land use entitlements, including without limitation, General Plan amendments, zoning changes, precise plans, development agreements, conditional use permits, variances, transportation demand management plans, tentative subdivision maps, parcel maps, lot line adjustments, general plan maintenance fee, demolition permits, and building permits. 48 225 2.2 Impact Fees (Existing g Fees). Except as modifiFees). Except as modified below, existing impact fees shall be paid for net new square footage at the rates and at the times prescribed in the resolution(s) or ordinance(s) adopting and implementing the fees. 2.2.1 Child Care Impact Fee. (SSFMC, ch. 20.310; Ordinance 1301 - 2001). 2.2.2 Public Safety Impact Fee. (Resolution 97 -2012) Prior to receiving a building permit the Project, the Developer shall pay the Public Safety Impact Fee, as set forth in Resolution No. 97 -2012, adopted on December 10, 2012 to assist the City's Fire Department and Police Department with funding the acquisition and maintenance of Police and Fire Department vehicles, apparatus, equipment, and similar needs for the provision of public safety services. 2.2.3 Sewer Capacity Charge. (Resolution 39 -2010) Prior to receiving a building permit for Tenant Improvements for the Project, the Developer shall pay the Sewer Capacity Charge, as set forth in Resolution No. 39 -2010. 2.2.4 General Plan Maintenance Fee (Resolution 74- 2007). 2.3 User Fees. 2.3.1 Sewer Service Charges (assessed as part of property tax bill) 2.3.2 Stormwater Charges (assessed as part of property tax bill) 3. BUSINESS LICENSE TAX MODIFICATIONS In the event that the City's business license tax is modified and duly approved by voters, and any subsequent tax modifications become applicable to the properties on the Project during the term of this Agreement, Developer shall be responsible to pay the applicable business license tax amounts, as modified. 49 226 DDA Exhibit H Preliminary Financing Plan 227 c E Z ICI c. °ao w GQ Z z ~ ~ o x V a �z� W Zw ate"+ d � k W U d i. d w Q V J a 0 0 V � N V Z Q OC LL Q N N N W CC = a � U 0 N z a zz V J Z Q Z W c Z J U C� O CG � G ~ O N z V z W p[ O W a oc J 0 J W LLI 0 W O 00 cm n ° N ^ N cn Q Ln 00 w � 00 N H O 3 3 3 ,I LOn M i^-I LOn M n M Ln Ln I- Ln W rl to r-I * r-I I� l0 Ln \ c I Ol 00 M c-I °1 00 CF) 00 M Ln Lr O O N Owl LfI O0l N 'R, rn ­ 0( o`�c m 00 -1 ri �o v� ri Ln 4 a 4A r14 4A r14 c I , °O -1 O Ol M of Ln m -:t M rn N r" O Ln O 0 O Ln M B Z Ln � O O al S 0 LLI ri of v} ri 00 4A Z 0 l0 N Z � O 0 a a a ?o ~ Q m N V V O 00 r-I tin + U do W a U C C C J oc J m J m O N C O N C Q W 0 0 z 0 z CC CC ` c 0 c Z Y CC O O C: ��'�� �� '� W Oa i4� N L4� LL LL U U H H U I= :2 O O o Ln 00 LD O N N CC T _ M V 0 0 O O M d N r0-I N T O rl OAS 00 O N n rl O N gm O N v 0 m O oc L7 H Z W 0 W N J a z z a r1 N N N Q a a G.7 Z U Q Z W LL� /L^ FF.�.II W Wl J M 0 CF) 6 N wt r-I O w I- H � 0- N n O M Ln O M O N 00 Ln 00 LD LD ri M Rt rl M O r-I V/ - r-I p c r o m a-+ 7 CL O T � N N 00 rl Lr) N N O 0 ti V f6 N l0 ry) O 0 O CF) m O N Rt O m c-1 Rt 40+ W w� 11. O O O � M O Rt 00 72 •L r- t/? t/? 00 to U rIj LL C O 4� 0 CL 0 0 ko Z o .N �2 _ T <D rl M O 00 r1 Ur 6 Q O - v, L O z I� Rt N O Rt to : LLJ 0 M Ln O � O 00 O 00 l0 m z O N LrI to M r- 0 J Ln LrI 0w0 rlj loo M 1, N M d N LL N O d Ln t/} M V) V), LrI N N -i -C � C: 4+ Ln O N N _ U d � N O � � 3 o 0 O o 0 aco `~ i a� 0 E N C O a +, c (6 O u Vl y N E J C >` LU O Q a G/ 'o 3 40 O :t 4, (6 Ln N Ls LJ J o 0 O U E '� � � z O C7 L +, +> + •> w o c z 3 0 'a U 3 a 2 co OC *T' CL � Ln U G a D Lu 0 0 0 N M Ln 00 r1 3 cr LLI cr 3 0 'a Lu a O O a O a z m N N N DDA Exhibit I Form of City Certificate of Completion 230 Recording requested by and when recorded mail to: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: City Manager EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE WI03, 27383 Space above this line for Recorder's use. CERTIFICATE OF COMPLETION (Linden Avenue) This Certificate of Completion (this "Certificate ") is made by the City of South San Francisco, a municipal corporation ( "City') effective as of , 20 RECITALS A. City, the Successor Agency to the Redevelopment Agency of the City of South San Francisco ( "Agency ") and Brookwood Equities LLC, a Delaware limited liability company ( "Owner ") entered into that certain Disposition and Development Agreement (the "DDA ") dated as of , 2015 concerning the redevelopment of certain real property located at 418 Linden Avenue in the City of South San Francisco, California, known as San Mateo County Assessor's Parcel Nos. 012 - 314 -010 and more fully described in Exhibit A attached hereto (the "Property "). A Memorandum of the DDA 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 DDA. B. Pursuant to Section 4.18 of the DDA, the City is required to furnish the Owner or its successors with a Certificate of Completion upon completion of construction of the Project in accordance with the DDA. C. The City has determined that construction of the Project has been satisfactorily completed in accordance with the DDA. NOW, THEREFORE, City hereby certifies as follows: Development of the Project has been satisfactorily completed in conformance with the DDA. 2. All use, maintenance and nondiscrimination covenants contained in the DDA shall remain in effect and enforceable in accordance with the DDA. This Certificate does not constitute evidence of Owner's compliance with those covenants in the DDA 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 DDA and recorded in the Official Records as Instrument No. Book , Page {S:BRKWD /0001 /RDU01106482.DOCX fS: BRKWD /0001 /RDU01106482.DOCX} 1 3. This Certificate does not constitute evidence of compliance with or satisfaction of any obligation of Owner to any holder of a deed of trust securing money loaned to finance the Improvements or any part thereof and does not constitute a notice of completion under California Civil Code Section 3093. 4. Nothing contained in this instrument shall modify any provisions of the DDA or any other document executed in connection therewith. IN WITNESS WHEREOF, City has executed and issued this Certificate of Completion as of the date first written above. CITY OF SOUTH SAN FRANCISCO, a municipal corporation By: FORM -DO NOT SIGN Name: City Manager ATTEST: By: FORM - DO NOT SIGN _ City Clerk APPROVED AS TO FORM: By: FORM -DO NOT SIGN City Attorney SIGNATURES MUST BE NOTARIZED. {S:BRKWD /0001 /RDU01106482.DOCX f �BRKWD /0001 /RDU01106482.DOCX}2 2447812.2 Exhibit A PROPERTY (Attach legal description.) {s:BRKwD/0001 /RDvoiio6482Docx} f 3sRKwD/0001 /RDvoiio6482.Docx }3 DDA Exhibit J Form of Agency Certificate of Completion 234 Recording requested by and when recorded mail to: Successor Agency to the Redevelopment Agency of the City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: Agency Chair EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE §§6103,27383 Space above this line for Recorder's use. CERTIFICATE OF COMPLETION (Grand - Cypress Avenue) This Certificate of Completion (this "Certificate ") is made by the Successor Agency to the Redevelopment Agency of the City of South San Francisco, a public agency ( "Agency ") effective as of , 20 RECITALS A. Agency, the City of South San Francisco ( "City ") and Brookwood Equities, LLC, a Delaware limited liability company ( "Owner ") entered into that certain Disposition and Development Agreement (the "DDA ") dated as of , 2015 concerning the redevelopment of certain real property located at 201 -219 Grand Avenue, known as San Mateo County Assessor's Parcel Nos. 012 - 316- 10 -10, 012 - 316 -100, 012 -316 -090 and 012 -316 -080 and more fully described in Exhibit A attached hereto (the "Property "). A Memorandum of the DDA 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 DDA. B. Pursuant to Section 4.18 of the DDA, the Agency is required to furnish the Owner or its successors with a Certificate of Completion upon completion of construction of the Project in accordance with the DDA. C. The Agency has determined that construction of the Project has been satisfactorily completed in accordance with the DDA. NOW, THEREFORE, Agency hereby certifies as follows: Development of the Project has been satisfactorily completed in conformance with the DDA. 2. All use, maintenance and nondiscrimination covenants contained in the DDA shall remain in effect and enforceable in accordance with the DDA. This Certificate does not constitute evidence of Owner's compliance with those covenants in the DDA 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 DDA and recorded in the Official Records as Instrument No. Book , Page {S:/BRKWD/ 0001 /RDU01106483.DOCX �BRKWD /0001 /RDU01106483.DOCX} 1 3. This Certificate does not constitute evidence of compliance with or satisfaction of any obligation of Owner to any holder of a deed of trust securing money loaned to finance the Improvements or any part thereof and does not constitute a notice of completion under California Civil Code Section 3093. 4. Nothing contained in this instrument shall modify any provisions of the DDA 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. SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO, a public agency By: FORM -DO NOT SIGN Name: Agency Chair ATTEST: By: FORM - DO NOT SIGN Agency Secretary APPROVED AS TO FORM: By: FORM -DO NOT SIGN Agency Counsel SIGNATURES MUST BE NOTARIZED. {S:/BRKWD/ 0001 /RDU01106483.DOCX {S�/BRKWD /0001 /RDU01106483.DOCX} 2 Exhibit A PROPERTY (Attach legal description.) {S:BRKWD /0001 /RDU01106483.DOCX : BRKWD /0001 /RDU01106483.DOCX} 3 Attachment 2 Draft Entitlements Resolution for 255 Cypress Avenue Exhibit A: Conditions of Approval Exhibit B: 255 Cypress Avenue Project Plans, dated May 21, 2015 238 RESOLUTION NO. CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO STATE OF CALIFORNIA A RESOLUTION APPROVING A USE PERMIT, DESIGN REVIEW, PARKING REDUCTION AND AFFORDABLE HOUSING AGREEMENT, FOR A MIXED -USE DEVELOPMENT AT 255 CYPRESS AVENUE IN THE GRAND AVENUE CORE ZONING DISTRICT. WHEREAS, the South San Francisco Successor Agency ( "Owner ") and Brookwood Group ( "Applicant ") have proposed construction of a five -story mixed -use residential and commercial development, consisting of 46 residential apartments above approximately 5,500 square feet of ground floor commercial space and 61 ground level parking spaces ( "Project ") on an approximately 20,200 square foot site located at 201 -219 Grand Avenue ( "Project Site ") in the City of South San Francisco ( "City "); and, WHEREAS, Applicant seeks approval of a Use Permit, Design Review, Parking Reduction and Affordable Housing Agreement for the Project; and, WHEREAS, approval of the Applicant's proposal is considered a "project" for purposes of the California Environmental Quality Act, Pub. Resources Code § 21000, et seq. ( "CEQA "); and, WHEREAS, the City Council certified an Environmental Impact Report ( "EIR ") on January 28, 2015 (State Clearinghouse number 2013102001) in accordance with the provisions of the California Environmental Quality Act (Public Resources Code, §§ 21000, et seq., "CEQA ") and CEQA Guidelines, which analyzed the potential environmental impacts of the development of the Downtown Station Area Specific Plan; and, WHEREAS, the Project would not result in any new significant environmental effects or a substantial increase in the severity of any previously identified effects beyond those disclosed and analyzed in the Downtown Station Area Specific Plan EIR certified by City Council, WHEREAS, on May 21, 2015 the Planning Commission for the City of South San Francisco held a lawfully noticed public hearing to solicit public comment and consider the proposed project, including the proposed entitlements, take public testimony, and make a recommendation to the City Council on the project, at the conclusion of which, the Planning Commission recommended that the City Council approve the Project; and, WHEREAS, the City Council held a duly noticed public hearing on December 9, 2015 to consider the Use Permit, Design Review, Parking Reduction, and Affordable Housing Agreement, and take public testimony. NOW, THEREFORE, BE IT RESOLVED that based on the entirety of the record before it, which includes without limitation, the California Environmental Quality Act, Public Resources Code §21000, et seq. ( "CEQA ") and the CEQA Guidelines, 14 California Code of Regulations § 15000, et 239 seq.; the South San Francisco General Plan and General Plan EIR; the Downtown Station Area Specific Plan and the Downtown Station Area Specific Plan EIR; the South San Francisco Municipal Code; the Project applications; the 255 Cypress Avenue Project Plans, as prepared by Gould Evans Architects, dated May 21, 2015; the 255 Cypress Avenue Air Quality Analysis and Health Risk Assessment, as prepared by RCH Group, dated May 5, 2015, including all appendices thereto; all site plans, and all reports, minutes, and public testimony submitted as part of the Planning Commission's duly noticed May 21, 2015 meeting; all site plans, and all reports, minutes, and public testimony submitted as part of the City Council's duly noticed public hearing on December 9, 2015, and City Council deliberations; and any other evidence (within the meaning of Public Resources Code §21080(e) and §21082.2), the City Council of the City of South San Francisco hereby finds as follows: A. General Findings The foregoing recitals are true and correct. 2. The Exhibits attached to this Resolution, including the Conditions of Project Approval (Exhibit A) and the 255 Cypress Avenue Project Plans (Exhibit B) are each incorporated by reference and made a part of this Resolution, as if set forth fully herein. The documents and other material constituting the record for these proceedings are located at the Planning Division for the City of South San Francisco, 315 Maple Avenue, South San Francisco, CA 94080, and in the custody of the Chief Planner, Sailesh Mehra. 4. Based upon the testimony and information presented at the hearing and upon review and consideration of the environmental documentation provided, the City Council, exercising its independent judgment and analysis, finds that the Project falls within the environmental parameters analyzed in the Downtown Station Area Specific Plan EIR, and that the Project would not result in any new significant environmental effects or a substantial increase in the severity of any previously identified effects beyond those disclosed and analyzed in the EIR certified by City Council, because in keeping with the DSASP EIR Mitigation Monitoring and Reporting Program, the project prepared an Air Quality and Health Risk Assessment that determined that the Project would not result in any new impacts related to Air Quality. B. Use Permit The proposed Project is consistent with the standards and requirements of the City's Zoning Ordinance and with the provisions of the Grand Avenue Core Zone District. The Project meets or exceeds all of the general development standards of the Grand Avenue Core District, with the exception of the increased density and floor area ratio (FAR). However, the increased density and FAR is permissible and warranted by the City's Zoning Ordinance subject to the provision of sufficient public benefits included as part of the development project and based on the findings contained in B.B. 240 2. The proposed Project is consistent with the General Plan by creating a mixed -use environment that emphasizes pedestrian - activity with buildings built up to the property line on Grand Avenue, provides a well - articulated and visually engaging development that implements the goals of the Downtown Station Area Specific Plan, is consistent with the City's Design Guidelines as they relate to building design, form and articulation and provides commercial uses along both Grand Avenue and Cypress Avenue. The proposed use will not be adverse to the public health, safety, or general welfare of the community, nor detrimental to surrounding properties or improvements, because the proposed use is consistent with the existing uses in the vicinity of the site, including the commercial and residential. The Project proposes mixed -use commercial and high - density residential uses on a site located in the City's Downtown Station Area Specific Plan District, which is intended for this type of use. The General Plan has analyzed this type of use in the Grand Avenue corridor, and concluded that such mixed -use commercial and residential uses are not adverse to the public health, safety, or welfare. As the proposed Project is consistent with other mixed -uses land uses in the Grand Avenue Core area, approval of the Project will not be detrimental to the nearby properties. 4. The proposed Project complies with applicable standards and requirements of the City's Zoning Ordinance, with the exception of the increased density and FAR. The stated exceptions are permissible and warranted by the City's Zoning Ordinance subject to the provision of sufficient public benefits included as part of the development project. The proposed Project is located in the Grand Avenue Core District and, subject to the increased density and FAR discussed above, meets the minimum standards and requirements for that district. The design, location, size, and operating characteristics of the proposed Project are compatible with the existing and reasonably foreseeable future land uses in the vicinity because the Project proposes commercial and residential uses in the Grand Avenue Core district, which is specifically intended for such uses. 6. The site is physically suitable for the type of development and density proposed, as the mixed -use commercial and residential uses will benefit from being located in close proximity to the South San Francisco Caltrain Station, Grand Avenue and the overall Downtown Station Area Specific Plan Area, and the size and development is appropriate for the location and meets the City's land use and zoning standards. 7. The Project is consistent with CEQA for the reasons stated in Finding A.4 above. 8. The proposal would result in a Project whose proposed public benefits and requested development incentives are suitable to the site and relate appropriately to adjacent uses and structures. The provision of 20 percent affordable units is in keeping with Downtown Station Area Specific Plan Land Use Strategy LU -9, which encourages the provision of affordable housing in the Specific Plan area. Providing the existing businesses on the site the right of first offer for the future commercial 241 spaces allows for the retention of successful businesses that have assisted in creating the current vitality of the Downtown. The provision of additional public space at the retail plaza will improve the public realm of sidewalks and adjoining open spaces at an important intersection on the Grand Avenue corridor. Finally, the provision of additional residential units through the increased density will provide more residents within the downtown to create a mixed -use activity center along Grand Avenue. 9. The proposed Project would be consistent with the accepted list of public benefits outlined in Section 20.280.004(A). The provision of public space at the retail plaza is in keeping with preference d, "Funding for enhanced public spaces ", by providing additional public seating area adjacent to the public right -of -way. The provision of right of first offer of commercial tenant space within the new building to the existing businesses on the site is in keeping with preference f, "Tenant space for local businesses or existing businesses in need of relocation ". The provision of affordable housing units is in keeping with preference i, "Other developer proposed incentives achieving a similar public benefit ", by providing a housing benefit that furthers Downtown Station Area Specific Plan Land Use Strategy LU -9, which encourages the provision of affordable housing in the Specific Plan area. 10. The proposal reflects a fair financial balance of costs and benefits to the applicant and the City. C. Design Review 1. The Project, including Design Review, is consistent with Title 20 of the South San Francisco Municipal Code because the Project has been designed as a high - density mixed -use commercial and residential project which will provide a pedestrian - friendly, transit - oriented environment with sustainability elements incorporated. 2. The Project, including Design Review, is consistent with the General Plan because the proposed high - density mixed -use commercial and residential development is consistent with the policies and design direction provided in the South San Francisco General Plan for the Grand Avenue Core land use designation by encouraging the development of a mixed -use pedestrian- oriented activity center within close proximity to the South San Francisco Caltrain Station and Downtown Station Area Specific Plan area. 3. The Project, including Design Review, is consistent with the applicable design guidelines adopted by the City Council in that the proposed Project is consistent with the Downtown Station Area Specific Plan Design Guidelines. 4. The Project is consistent with the Use Permit for the reasons stated in Section B, above. 242 The Project is consistent with the applicable design review criteria in South San Francisco Municipal Code Section 20.480.006 ( "Design Review Criteria ") because the project has been evaluated by the Design Review Board on April 21, 2015, and found to be consistent with each of the eight design review criteria included in the "Design Review Criteria" section of the Ordinance, and the Design Review Board. D. Parking Reduction 1. There is adequate parking supply within the Downtown Parking District to accommodate the on -site parking needs of the proposed Project because of the proximity of the site to the future relocated Caltrain station and SamTrans bus routes, the Miller Avenue Parking Garage and metered parking spaces located along Grand, Cypress and Miller Avenues and Airport Boulevard, and because the project will provide sufficient parking based on the bedroom count of each unit. E. Affordable Housing Agreement 1. The proposed Project complies with the Inclusionary Housing Regulations, including the requirement that not less than twenty (20) percent of the total units approved shall be constructed and restricted both as to occupancy and affordability to low- and moderate - income households, with the exception of the distribution of affordable units within the designated affordability ranges. This is acceptable because construction across all designated affordability ranges between fifty (50) percent and one hundred twenty (120) percent of area median income (AMI) would be infeasible or present unreasonable hardship in light of financial subsidies available from the City and from the Housing Endowment and Regional Trust of San Mateo County (HEART) that can only be used for households at eighty (80) percent of AMI or below. This limit creates a need to balance the lost revenue from the higher income units with an increase in the affordability levels of the lower income units that would normally be required. The City has made similar accommodations for past development projects that could not provide the exact number of units or income level ranges required by the Inclusionary Housing Regulations. NOW, THEREFORE, BE IT FURTHER RESOLVED that subject to the Conditions of Approval, attached as Exhibit A to this resolution, the City Council of the City of South San Francisco hereby makes the findings contained in this Resolution, and approves the Use Permit, Design Review, Parking Reduction and Affordable Housing Agreement for the Project. BE IT FURTHER RESOLVED that this Resolution shall become effective immediately upon its passage and adoption. I hereby certify that the foregoing resolution was adopted by the City Council of the City of South San Francisco at the regular meeting held on the 9th day of December, 2015 by the following vote: 243 AYES: NOES: ABSTENTIONS: ABSENT: Attest: City Clerk 244 Attachment 2, Exhibit A 255 Cypress - Conditions of Approval 245 DRAFT CONDITIONS OF APPROVAL P15 -0017: UP15 -0003, DR15 -0016 & PE15 -0001 255 CYPRESS AVENUE (As recommended by Planning Commission on May 21, 2015) A) Planning Division requirements shall be as follows: The applicant shall comply with the Planning Divisions standard Conditions and Limitations for Commercial, Industrial, Mixed -Use and Multi - Family Residential Projects. 2. The project shall be constructed and operated substantially as indicated on the plan set prepared by Gould Evans Architects, dated May 21, 2015. 3. The applicant shall comply with all applicable mitigation measures outlined in the Mitigation Monitoring and Reporting Program (MMRP) for the Downtown Station Area Specific Plan. 4. All equipment (either roof, building, or ground- mounted) shall be screened from view through the use of integral architectural elements, such as enclosures or roof screens, and landscape screening or shall be incorporated inside the exterior building wall. Equipment enclosures and /or roof screens shall be painted to match the building. Prior to issuance of a building permit the applicant shall submit plans showing utility locations, stand - pipes, equipment enclosures, landscape screens, and /or roof screens for review and approval by the Chief Planner or designee. 5. No signs are included in this permit application. Prior to installation of any signage, the applicant shall submit an appropriate sign application per Chapter 20.360 of the Zoning Ordinance for review and approval by the Chief Planner or designee. 6. Prior to issuance of any building or construction permits for the construction of public improvements, the final design for all public improvements shall be reviewed and approved by the City Engineer and Chief Planner. 7. Prior to issuance of any building or construction permits for grading improvements, the applicant shall submit final grading plans for review and approval by the City Engineer and Chief Planner. Prior to issuance of any building or construction permits for landscaping improvements, the applicant shall submit final landscaping and irrigation plans for review and approval by the Chief Planner. The plans shall include documentation of compliance with SSFMC § 20.300.007 "Landscaping ", including Water Efficient Landscaping and Irrigation calculations. 9. All parking areas are to be maintained free and clear of litter and storage and shall remain clear for parking at all times. No outdoor storage of materials is allowed. 246 10. Prior to issuance of any building or construction permits, the developer shall revise the development plans to address the Design Review Board comments, subject to review and approval by the Chief Planner or designee. 11. Prior to issuance of certificate of occupancy for residential uses, the applicant shall pay any applicable childcare fees in accordance with South San Francisco Municipal Code Chapter 20.115. This fee is subject to annual adjustment, and presently is assessed at $1,851.00 per high density residential unit. 12. Any modification to the approved plans shall be subject to SSFMC Section 20.450.012 ( "Modification "), whereby the Chief Planner may approve minor changes. All exterior design modifications, including any and all utilities, shall be presented to the Chief Planner for a determination. 13. Prior to issuance of any building or construction permits, the developer shall revise the development plans to include the following Climate Action Plan requirements, subject to review and approval by the Chief Planner or designee: a) Install conduit to accommodate wiring for solar. b) Use of high- albedo surfaces and technologies as appropriate, as identified in the voluntary CALGreen standards. c) Implement the Water Efficient Landscape Ordinance. 14. Prior to the issuance of any building or construction permits, the applicant shall contact the South San Francisco Scavenger Company to properly size any required trash enclosures and work with staff to locate the trash enclosure in accordance with the zoning ordinance, SSFMC 20.300.014. An approval letter from South San Francisco Scavenger shall be provided to the Chief Planner. 15. The applicant shall purchase a minimum of two (2) annual parking permits from the Downtown Parking District. At the time of purchase at the beginning of each year, the applicant shall provide proof of purchase to the Planning Division. Planning Division contact: Billy Gross, Senior Planner (650) 877 -8535 B) Fire Department requirements shall be as follows: Prior to issuance of a building permit the applicant shall submit plans showing the following improvements for review and approval by the Fire Marshal or designee: a) Install fire sprinkler system per NFPA 13 /SSFFD requirements under separate fire plan check and permit for overhead and underground. b) The car parking system shall be protected in a similar manner to that of the San Francisco Fire Department standards. 247 c) Fire sprinkler system shall be central station monitored per California Fire Code section 1003.3. d) Fire alarm plans shall be provided per NFPA 72 and the City of South San Francisco Municipal Code. e) Provide fire extinguishers throughout the building. f) All buildings shall provide premise identification in accordance with SSF municipal code section 15.24.100. g) Provide Knox key box for each building with access keys to entry doors, electrical /mechanical rooms, elevators, and others to be determined. h) Install a standpipe system per NFPA 14 /SSFFD requirements under separate fire plan check and permit. i) Install exterior listed horn /strobe alarm device, not a bell. j) At least one elevator shall be sized for a gurney the minimum size shall be in accordance with the CFC. Elevator shall not contain shunt - trips. k) All Non - parking space curbs to be painted red to local Fire Code Specifications. 1) Access road shall have all weather driving capabilities and support the imposed load of 75,000 pounds. m) Provide the location of the new and existing fire hydrants. Provide fire hydrants with an average spacing of 300 feet between hydrants. The fire hydrants shall have a minimum fire flow of 3250 gpm at 20 psi residual pressure for duration of 4 hours. n) All buildings shall have Emergency Responder Radio Coverage throughout in compliance with Section 510 of the California Fire Code. 2. Prior to issuance of any building or construction permit, the applicant shall pay any applicable Public Safety Impact Fee in accordance with City Council Resolution 97 -2012. This fee is subject to annual adjustment, and presently the amounts for high density residential are $168.90 per unit for the Police Department and $394.10 per unit for the Fire Department. Fire Prevention contact: Luis DaSilva, Fire Marshal (650) 829 -6645 C) Engineering Division requirements shall be as follows: The Owner shall coordinate with the City Inspector to ensure that any necessary sewer lateral work will be satisfactory to the City, and shall obtain an encroachment permit for any work in the public right of way. All work related to these requirements shall be accomplished at the Owner's expense. .• 2. The owner shall, at his /her expense, replace any broken sidewalk, curb, and gutter fronting the property. The City of SSF shall be the sole judge of whether any such replacement is necessary. 3. The owner shall, at his /her expense, design and construct a drainage system that will route storm water run -off from the building roof areas towards permeably and landscaped areas. All storm water generated on -site must stay within the property boundaries. 4. If excavation and grading work involves movement of more than 50 cubic yards of soil, a grading permit is required. Owner is responsible for all associated fees and deposits. 5. Contractors must have a Class A license for any work in the street (beyond the face of curb). Contractors with a Class A license may perform any and all work associated with building permit requirements. For concrete work between the curb and the building, a Class C -8 license is sufficient. For plumbing work between the curb and the building, a Class C -36 license is sufficient. An exemption may be granted by the City if a relatively minor portion of the work is not covered by the Contractor's license. For example, if a new sewer cleanout is being installed in the sidewalk by a Contractor with a C -36 (plumbing) license, the same contractor may remove and reform no more than one (1) panel of the sidewalk without the need for a Class C -8 (concrete) license. 6. Install ADA compliant curb ramps at curb returns. 7. Owner shall submit a $3,500 deposit for technical review of the geotechnical report. Money not spent during the review will be returned to the Owner. Engineering Division contact: Lawrence Henriquez, Associate Engineer (650) 829 -6652 D) Police Department requirements shall be as follows: Municipal Code Compliance. The applicant shall comply with the provisions of Chapter 15.48 of the Municipal Code, "Minimum Building Security Standards" Ordinance revised May 1995. The Police Department reserves the right to make additional security and safety conditions, if necessary, upon receipt of detailed / revised building plans. Police Department contact: Sergeant Adam Plank (650) 877 -7248 E) Water Quality Control Plant requirements shall be as follows: Fire sprinkler test drain must be connected to the sanitary sewer. 2. Condensate drains from HVAC system must be connected to the sanitary sewer. 3. Site is subject to Low impact development requirements; site must treat stormwater prior to it entering the stormwater system. Complete applicable forms for low impact development. 249 4. Roof leaders cannot be connected directly to the storm drain system. 5. The onsite catch basins are to be stenciled with the approved San Mateo Countywide Stormwater Logo (No Dumping! Flows to Bay). 6. Landscaping shall meet the following conditions related to reduction of pesticide use on the project site: a) Where feasible, landscaping shall be designed and operated to treat stormwater runoff by incorporating elements that collect, detain, and infiltrate runoff. In areas that provide detention of water, plants that are tolerant of saturated soil conditions and prolonged exposure to water shall be specified. b) Plant materials selected shall be appropriate to site specific characteristics such as soil type, topography, climate, amount and timing of sunlight, prevailing winds, rainfall, air movement, patterns of land use, ecological consistency and plant interactions to ensure successful establishment. c) Existing native trees, shrubs, and ground cover shall be retained and incorporated into the landscape plan to the maximum extent practicable. d) Proper maintenance of landscaping, with minimal pesticide use, shall be the responsibility of the property owner. e) Integrated pest management (IPM) principles and techniques shall be encouraged as part of the landscaping design to the maximum extent practicable. Examples of IPM principles and techniques include: i. Select plants that are well adapted to soil conditions at the site. ii. Select plants that are well adapted to sun and shade conditions at the site. In making these selections, consider future conditions when plants reach maturity, as well as seasonal changes. iii. Provide irrigation appropriate to the water requirements of the selected plants. iv. Select pest- resistant and disease- resistant plants. v. Plant a diversity of species to prevent a potential pest infestation from affecting the entire landscaping plan. vi. Use "insectary" plants in the landscaping to attract and keep beneficial insects. 7. No decorative bark shall be used in landscaping. A grading and drainage plan must be submitted. 9. An erosion and sediment control plan must be submitted. 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G � ',y i " C i6� EY rye P: ° rr I' 6 r 1 YR 1 x_ tl� q Pfe$ s X14 i9 W aB "Fa � s xT 8d z iIT a .. to �g,3S fa �itl3B R ea .I S zfl ,i4 I r aFle wa s,eFax _ N r s,Jhx o S9lCZl0:NddV U ¢ n o f N a z m y w 11 L-9 L CZ l0:Nd, w v ry ry x 2 - m G ..Y..Q _v `vv Q U U w rc O,°en OGOb5 bJ'p'J6'bNWjNtlS Hinos 5 3JdA�55Z VJ ,y N w /n W V z z LZ r _ - 1111111111110 asn a3xiw = LL Y = m it = 11110111111 _ SS3ddAo'S (INV'JE) y ;, Q W mm HOMES: _ N r s,Jhx I MINIMUM 1111111111110 11110111111 mm HOMES: _ N r s,Jhx Attachment 3 Draft Entitlements Resolution for 418 Linden Avenue Exhibit A: Conditions of Approval Exhibit B: 418 Linden Avenue Project Plans, dated May 21, 2015 278 RESOLUTION NO. CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO STATE OF CALIFORNIA A RESOLUTION APPROVING A USE PERMIT, DESIGN REVIEW, PARKING REDUCTION AND AFFORDABLE HOUSING AGREEMENT, FOR A RESIDENTIAL DEVELOPMENT AT 418 LINDEN AVENUE IN THE DOWNTOWN TRANSIT CORE ZONING DISTRICT. WHEREAS, the City of South San Francisco ( "Owner ") and Brookwood Group ( "Applicant ") have proposed construction of a five -story mixed -use residential and commercial development, consisting of 38 residential apartments above ground -floor support space and 47 ground level parking spaces ( "Project ") on an approximately 14,000 square foot site, which is currently a temporary public parking lot, located at 418 Linden Avenue, between Lux Avenue and Tamarack Lane ( "Project Site ") in the City of South San Francisco ( "City "); and, WHEREAS, Applicant seeks approval of a Use Permit, Design Review, Parking Reduction and Affordable Housing Agreement for the Project; and, WHEREAS, approval of the Applicant's proposal is considered a "project" for purposes of the California Environmental Quality Act, Pub. Resources Code § 21000, et seq. ( "CEQA "); and, WHEREAS, the City Council certified an Environmental Impact Report ( "EIR ") on January 28, 2015 (State Clearinghouse number 2013102001) in accordance with the provisions of the California Environmental Quality Act (Public Resources Code, §§ 21000, et seq., "CEQA ") and CEQA Guidelines, which analyzed the potential environmental impacts of the Downtown Station Area Specific Plan; and, WHEREAS, the Project would not result in any new significant environmental effects or a substantial increase in the severity of any previously identified effects beyond those disclosed and analyzed in the Downtown Station Area Specific Plan EIR certified by City Council, WHEREAS, on May 21, 2015 the Planning Commission for the City of South San Francisco held a lawfully noticed public hearing to solicit public comment and consider the proposed project, including the proposed entitlements, take public testimony, and make a recommendation to the City Council on the project, at the conclusion of which, the Planning Commission recommended that the City Council approve the Project; and, WHEREAS, the City Council held a duly noticed public hearing on December 9, 2015 to consider the Use Permit, Design Review, Parking Reduction, and Affordable Housing Agreement, and take public testimony. NOW, THEREFORE, BE IT RESOLVED that based on the entirety of the record before it, which includes without limitation, the California Environmental Quality Act, Public Resources Code §21000, et seq. ( "CEQA ") and the CEQA Guidelines, 14 California Code of Regulations § 15000, et 279 seq.; the South San Francisco General Plan and General Plan EIR; the Downtown Station Area Specific Plan and the Downtown Station Area Specific Plan EIR; the South San Francisco Municipal Code; the Project applications; the 418 Linden Avenue Project Plans, as prepared by Gould Evans Architects, dated May 21, 2015; the 418 Linden Avenue Air Quality Analysis and Health Risk Assessment, as prepared by RCH Group, dated May 5, 2015, including all appendices thereto; all site plans, and all reports, minutes, and public testimony submitted as part of the Planning Commission's duly noticed May 21, 2015 meeting; all site plans, and all reports, minutes, and public testimony submitted as part of the City Council's duly noticed public hearing on December 9, 2015, and City Council deliberations; and any other evidence (within the meaning of Public Resources Code §21080(e) and §21082.2), the City Council of the City of South San Francisco hereby finds as follows: A. General Findings The foregoing recitals are true and correct. 2. The Exhibits attached to this Resolution, including the Conditions of Project Approval (Exhibit A) and the 418 Linden Avenue Project Plans (Exhibit B) are each incorporated by reference and made a part of this Resolution, as if set forth fully herein. The documents and other material constituting the record for these proceedings are located at the Planning Division for the City of South San Francisco, 315 Maple Avenue, South San Francisco, CA 94080, and in the custody of the Chief Planner, Sailesh Mehra. 4. Based upon the testimony and information presented at the hearing and upon review and consideration of the environmental documentation provided, the City Council, exercising its independent judgment and analysis, finds that the Project falls within the environmental parameters analyzed in the Downtown Station Area Specific Plan EIR, and that the Project would not result in any new significant environmental effects or a substantial increase in the severity of any previously identified effects beyond those disclosed and analyzed in the EIR certified by City Council, because in keeping with the DSASP EIR Mitigation Monitoring and Reporting Program, the project prepared an Air Quality and Health Risk Assessment that determined that the Project would not result in any new impacts related to Air Quality. B. Use Permit The proposed Project is consistent with the standards and requirements of the City's Zoning Ordinance and with the provisions of the Downtown Transit Core Zone District. The Project meets or exceeds all of the general development standards of the Downtown Transit Core Zone District, with the exception of the increased density. However, the increased density is permissible and warranted by the City's Zoning Ordinance subject to the provision of sufficient public benefits included as part of the development project and based on the findings contained in B.B. .W 2. The proposed Project is consistent with the General Plan by reusing an underutilized site to construct a high - density residential development that will assist in the creation of a pedestrian - friendly mixed -use activity center along Linden Avenue and the downtown area, provides a well - articulated and visually engaging development that implements the goals of the Downtown Station Area Specific Plan, is consistent with the City's Design Guidelines as they relate to building design, form and articulation. The proposed use will not be adverse to the public health, safety, or general welfare of the community, nor detrimental to surrounding properties or improvements, because the proposed use is consistent with the existing uses in the vicinity of the site, including the commercial and residential. The Project proposes a high - density residential use on a site located in the City's Downtown Station Area Specific Plan district, which is intended for this type of use. The General Plan has analyzed this type of use in the Linden Avenue corridor, and concluded that such high- density residential uses are not adverse to the public health, safety, or welfare. As the proposed Project is consistent with high - density residential uses anticipated in the area, approval of the Project will not be detrimental to the nearby properties. 4. The proposed Project complies with applicable standards and requirements of the City's Zoning Ordinance, with the exception of the increased density. The stated exceptions are permissible and warranted by the City's Zoning Ordinance subject to the provision of sufficient public benefits included as part of the development project. The proposed Project is located in the Downtown Transit Core District and, subject to the increased density discussed above, meets the minimum standards and requirements for that district. The design, location, size, and operating characteristics of the proposed Project are compatible with the existing and reasonably foreseeable future land uses in the vicinity because the Project proposes high- density residential uses in the Downtown Transit Core district, which is specifically intended for such uses. 6. The site is physically suitable for the type of development and density proposed, as the high- density residential uses will benefit from being located in close proximity to the South San Francisco Caltrain Station, Linden Avenue, Grand Avenue and the overall Downtown Station Area Specific Plan Area, and the size and development is appropriate for the location and meets the City's land use and zoning standards. 7. The Project is consistent with CEQA for the reasons stated in Finding A.4 above. 8. The proposal would result in a Project whose proposed public benefits and requested development incentives are suitable to the site and relate appropriately to adjacent uses and structures. The provision of 20 percent affordable units is in keeping with Downtown Station Area Specific Plan Land Use Strategy LU -9, which encourages the provision of affordable housing in the Specific Plan area. The provision of additional residential units through the increased density will provide more 281 residents within the Linden Avenue corridor and the downtown to create a mixed -use activity center. 9. The proposed Project would be consistent with the accepted list of public benefits outlined in Section 20.280.004(A). The provision of affordable housing units is in keeping with preference i, "Other developer proposed incentives achieving a similar public benefit ", by providing a housing benefit that furthers Downtown Station Area Specific Plan Land Use Strategy LU -9, which encourages the provision of affordable housing in the Specific Plan area. 10. The proposal reflects a fair financial balance of costs and benefits to the applicant and the City. C. Design Review The Project, including Design Review, is consistent with Title 20 of the South San Francisco Municipal Code because the Project has been designed as a high - density residential project which will provide a pedestrian - friendly, transit - oriented environment with sustainability elements incorporated. 2. The Project, including Design Review, is consistent with the General Plan because the proposed high - density residential development is consistent with the policies and design direction provided in the South San Francisco General Plan for the Downtown Transit Core land use designation by reusing an underutilized site to construct a high - density residential development that will assist in the creation of a pedestrian - friendly mixed -use activity center along Linden Avenue and the downtown area. 3. The Project, including Design Review, is consistent with the applicable design guidelines adopted by the City Council in that the proposed Project is consistent with the Downtown Station Area Specific Plan Design Guidelines. 4. The Project is consistent with the Use Permit for the reasons stated in Section B, above. The Project is consistent with the applicable design review criteria in South San Francisco Municipal Code Section 20.480.006 ( "Design Review Criteria ") because the project has been evaluated by the Design Review Board on April 21, 2015, and found to be consistent with each of the eight design review criteria included in the "Design Review Criteria" section of the Ordinance, and the Design Review Board. D. Parking Reduction There is adequate parking supply within the Downtown Parking District to accommodate the on -site parking needs of the proposed Project because the project will provide 282 sufficient parking based on the bedroom count of each unit and because of the proximity of the site to the future relocated Caltrain station and SamTrans bus routes. E. Affordable Housing Agreement 1. The proposed Project complies with the Inclusionary Housing Regulations, including the requirement that not less than twenty (20) percent of the total units approved shall be constructed and restricted both as to occupancy and affordability to low- and moderate - income households, with the exception of the distribution of affordable units within the designated affordability ranges. This is acceptable because construction across all designated affordability ranges between fifty (50) percent and one hundred twenty (120) percent of area median income (AMI) would be infeasible or present unreasonable hardship in light of financial subsidies available from the City and from the Housing Endowment and Regional Trust of San Mateo County (HEART) that can only be used for households at eighty (80) percent of AMI or below. This limit creates a need to balance the lost revenue from the higher income units with an increase in the affordability levels of the lower income units that would normally be required. The City has made similar accommodations for past development projects that could not provide the exact number of units or income level ranges required by the Inclusionary Housing Regulations. NOW, THEREFORE, BE IT FURTHER RESOLVED that subject to the Conditions of Approval, attached as Exhibit A to this resolution, the City Council of the City of South San Francisco hereby makes the findings contained in this Resolution, and approves the Use Permit, Design Review, Parking Reduction and Affordable Housing Agreement for the Project. BE IT FURTHER RESOLVED that this Resolution shall become effective immediately upon its passage and adoption. I hereby certify that the foregoing resolution was adopted by the City Council of the City of South San Francisco at the regular meeting held on the 9th day of December, 2015 by the following vote: AYES: NOES: ABSTENTIONS: ABSENT: Attest: City Clerk 283 Attachment 3, Exhibit A 418 Linden - Conditions of Approval ., DRAFT CONDITIONS OF APPROVAL P15 -0016: UP15 -0002, DR15 -0015 & PE15 -0002 418 LINDEN AVENUE (As recommended by Planning Commission on May 21, 2015) A) Planning Division requirements shall be as follows: The applicant shall comply with the Planning Divisions standard Conditions and Limitations for Commercial, Industrial, Mixed -Use and Multi - Family Residential Projects. 2. The project shall be constructed and operated substantially as indicated on the plan set prepared by Gould Evans Architects, dated May 21, 2015. 3. The applicant shall comply with all applicable mitigation measures outlined in the Mitigation Monitoring and Reporting Program (MMRP) for the Downtown Station Area Specific Plan. 4. All equipment (either roof, building, or ground- mounted) shall be screened from view through the use of integral architectural elements, such as enclosures or roof screens, and landscape screening or shall be incorporated inside the exterior building wall. Equipment enclosures and /or roof screens shall be painted to match the building. Prior to issuance of a building permit the applicant shall submit plans showing utility locations, stand - pipes, equipment enclosures, landscape screens, and /or roof screens for review and approval by the Chief Planner or designee. 5. No signs are included in this permit application. Prior to installation of any signage, the applicant shall submit an appropriate sign application per Chapter 20.360 of the Zoning Ordinance for review and approval by the Chief Planner or designee. 6. Prior to issuance of any building or construction permits for the construction of public improvements, the final design for all public improvements shall be reviewed and approved by the City Engineer and Chief Planner. 7. Prior to issuance of any building or construction permits for grading improvements, the applicant shall submit final grading plans for review and approval by the City Engineer and Chief Planner. Prior to issuance of any building or construction permits for landscaping improvements, the applicant shall submit final landscaping and irrigation plans for review and approval by the Chief Planner. The plans shall include documentation of compliance with SSFMC § 20.300.007 "Landscaping ", including Water Efficient Landscaping and Irrigation calculations. 9. All parking areas are to be maintained free and clear of litter and storage and shall remain clear for parking at all times. No outdoor storage of materials is allowed. 285 10. Prior to issuance of any building or construction permits, the developer shall revise the development plans to address the Design Review Board comments, subject to review and approval by the Chief Planner or designee. 11. Prior to issuance of certificate of occupancy for residential uses, the applicant shall pay any applicable childcare fees in accordance with South San Francisco Municipal Code Chapter 20.115. This fee is subject to annual adjustment, and presently is assessed at $1,851.00 per high density residential unit. 12. Any modification to the approved plans shall be subject to SSFMC Section 20.450.012 ( "Modification "), whereby the Chief Planner may approve minor changes. All exterior design modifications, including any and all utilities, shall be presented to the Chief Planner for a determination. 13. Prior to issuance of any building or construction permits, the developer shall revise the development plans to include the following Climate Action Plan requirements, subject to review and approval by the Chief Planner or designee: a) Install conduit to accommodate wiring for solar. b) Use of high- albedo surfaces and technologies as appropriate, as identified in the voluntary CALGreen standards. c) Implement the Water Efficient Landscape Ordinance. 14. Prior to the issuance of any building or construction permits, the applicant shall contact the South San Francisco Scavenger Company to properly size any required trash enclosures and work with staff to locate the trash enclosure in accordance with the zoning ordinance, SSFMC 20.300.014. An approval letter from South San Francisco Scavenger shall be provided to the Chief Planner. Planning Division contact: Billy Gross, Senior Planner (650) 877 -8535 B) Fire Department requirements shall be as follows: Prior to issuance of a building permit the applicant shall submit plans showing the following improvements for review and approval by the Fire Marshal or designee: a) Install fire sprinkler system per NFPA 13 /SSFFD requirements under separate fire plan check and permit for overhead and underground. b) The car parking system shall be protected in a similar manner to that of the San Francisco Fire Department standards. c) Fire sprinkler system shall be central station monitored per California Fire Code section 1003.3. :. d) Fire alarm plans shall be provided per NFPA 72 and the City of South San Francisco Municipal Code. e) Provide fire extinguishers throughout the building. f) All buildings shall provide premise identification in accordance with SSF municipal code section 15.24.100. g) Provide Knox key box for each building with access keys to entry doors, electrical /mechanical rooms, elevators, and others to be determined. h) Install a standpipe system per NFPA 14 /SSFFD requirements under separate fire plan check and permit. i) Install exterior listed horn /strobe alarm device, not a bell. j) At least one elevator shall be sized for a gurney the minimum size shall be in accordance with the CFC. Elevator shall not contain shunt - trips. k) All Non - parking space curbs to be painted red to local Fire Code Specifications. 1) Access road shall have all weather driving capabilities and support the imposed load of 75,000 pounds. m) Provide the location of the new and existing fire hydrants. Provide fire hydrants with an average spacing of 300 feet between hydrants. The fire hydrants shall have a minimum fire flow of 3250 gpm at 20 psi residual pressure for duration of 4 hours. n) All buildings shall have Emergency Responder Radio Coverage throughout in compliance with Section 510 of the California Fire Code. 2. Prior to issuance of any building or construction permit, the applicant shall pay any applicable Public Safety Impact Fee in accordance with City Council Resolution 97 -2012. This fee is subject to annual adjustment, and presently the amounts for high density residential are $168.90 per unit for the Police Department and $394.10 per unit for the Fire Department. Fire Prevention contact: Luis DaSilva, Fire Marshal (650) 829 -6645 C) Engineering Division requirements shall be as follows: Drawing C3.00 shows a new 6 -inch sewer lateral being connected to the existing 6 -inch sewer main. Prior to issuance of a building permit, applicant shall prepare a sewer study to verify that the existing 6 -inch sewer main can handle the additional flow from the proposed development. 2. The Owner shall coordinate with the City Inspector to ensure that any necessary sewer lateral work will be satisfactory to the City, and shall obtain an encroachment permit for 287 any work in the public right of way. All work related to these requirements shall be accomplished at the Owner's expense. 3. The owner shall, at his /her expense, replace any broken sidewalk, curb, and gutter fronting the property. The City of SSF shall be the sole judge of whether any such replacement is necessary. 4. The owner shall, at his /her expense, design and construct a drainage system that will route storm water run -off from the building roof areas towards permeably and landscaped areas. All storm water generated on -site must stay within the property boundaries. 5. If excavation and grading work involves movement of more than 50 cubic yards of soil, a grading permit is required. Owner is responsible for all associated fees and deposits. 6. Contractors must have a Class A license for any work in the street (beyond the face of curb). Contractors with a Class A license may perform any and all work associated with building permit requirements. For concrete work between the curb and the building, a Class C -8 license is sufficient. For plumbing work between the curb and the building, a Class C -36 license is sufficient. An exemption may be granted by the City if a relatively minor portion of the work is not covered by the Contractor's license. For example, if a new sewer cleanout is being installed in the sidewalk by a Contractor with a C -36 (plumbing) license, the same contractor may remove and reform no more than one (1) panel of the sidewalk without the need for a Class C -8 (concrete) license. 7. Install ADA compliant curb ramps at curb returns. Owner shall submit a $3,500 deposit for technical review of the geotechnical report. Money not spent during the review will be returned to the Owner. Engineering Division contact: Robert Hahn, Associate Engineer (650) 829 -6652 D) Police Department requirements shall be as follows: Municipal Code Compliance. The applicant shall comply with the provisions of Chapter 15.48 of the Municipal Code, "Minimum Building Security Standards" Ordinance revised May 1995. The Police Department reserves the right to make additional security and safety conditions, if necessary, upon receipt of detailed / revised building plans. Police Department contact: Sergeant Adam Plank (650) 877 -7248 E) Water Quality Control Plant requirements shall be as follows: Fire sprinkler test drain must be connected to the sanitary sewer. 2. Condensate drains from HVAC system must be connected to the sanitary sewer. NM 3. Site is subject to Low impact development requirements; site must treat stormwater prior to it entering the stormwater system. Complete applicable forms for low impact development. 4. Roof leaders cannot be connected directly to the storm drain system. 5. The onsite catch basins are to be stenciled with the approved San Mateo Countywide Stormwater Logo (No Dumping! Flows to Bay). 6. Landscaping shall meet the following conditions related to reduction of pesticide use on the project site: a) Where feasible, landscaping shall be designed and operated to treat stormwater runoff by incorporating elements that collect, detain, and infiltrate runoff. In areas that provide detention of water, plants that are tolerant of saturated soil conditions and prolonged exposure to water shall be specified. b) Plant materials selected shall be appropriate to site specific characteristics such as soil type, topography, climate, amount and timing of sunlight, prevailing winds, rainfall, air movement, patterns of land use, ecological consistency and plant interactions to ensure successful establishment. c) Existing native trees, shrubs, and ground cover shall be retained and incorporated into the landscape plan to the maximum extent practicable. d) Proper maintenance of landscaping, with minimal pesticide use, shall be the responsibility of the property owner. e) Integrated pest management (IPM) principles and techniques shall be encouraged as part of the landscaping design to the maximum extent practicable. Examples of IPM principles and techniques include: i. Select plants that are well adapted to soil conditions at the site. ii. Select plants that are well adapted to sun and shade conditions at the site. In making these selections, consider future conditions when plants reach maturity, as well as seasonal changes. iii. Provide irrigation appropriate to the water requirements of the selected plants. iv. Select pest- resistant and disease- resistant plants. v. Plant a diversity of species to prevent a potential pest infestation from affecting the entire landscaping plan. vi. Use "insectary" plants in the landscaping to attract and keep beneficial insects. 7. No decorative bark shall be used in landscaping. A grading and drainage plan must be submitted. 9. An erosion and sediment control plan must be submitted. Water Quality contact: Rob Lecel (650) 877 -8555 .. Attachment 3, Exhibit B 418 Linden - Project Plans, dated May 21, 2015 290 0 O C) Of E 8, H.HH- &A N-8 I 1 f `2 Mi a3an Lu LLJ U) LL LU MEMNON 3AV N30W o o E=El FIL 17, r S,Jhx VIII _ IIII� .�.�.�.�.�.�.�.�.�.�.�.�.�. 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Staff Report (May 21, 2015) b. Minutes (May 21, 2015) c. Planning Commission Resolution 2766 -2015 - Entitlements 315 Attachment 4.a 255 Cypress - Planning Commission Staff Report (May 21, 2015) 316 Planning Commission Staff ReDort DATE: May 21, 2015 TO: Planning Commission SUBJECT: 255 Cypress Avenue Mixed -Use Development - Use Permit, Design Review and Parking Reduction to construct a new 5 -story mixed -use building with approximately 6,000 square feet of commercial space and 46 residential units with mechanical parking stackers at 255 Cypress Avenue in the Grand Avenue Core (GAC) Zoning District in accordance with Chapters 20.280, 20.300, 20.330, 20.380, 20.480 and 20.490. Address: 255 Cypress (APNs 012 -316 -080, 012 -316 -090, 012 - 316 -100 & 012 -316- 110) Owner: South San Francisco Successor Agency Applicant: Brookwood Group Case No.: P15 -0017: UP15 -0003, DR15 -0016 & PE15 -0001 RECOMMENDATION That the Planning Commission conduct a public hearing and adopt a Resolution making findings and approving Planning Project P15 -0017, including UP15 -0003, DR15 -0016, and PE15 -0001 based on the attached draft findings and subject to the attached draft conditions of approval. BACKGROUND/ DISCUSSION Introduction The project site consists of four separate lots, totaling 20,198 square feet, that were originally acquired by the South San Francisco Redevelopment Agency ( "Redevelopment Agency "). The parcel at 201 Grand Ave, immediately adjacent to Cypress Ave, was acquired by the Redevelopment Agency in 2000. The building on the site was demolished due to code violations and the property is currently used as a temporary public parking lot with 13 metered parking spaces. The vacant parcel at 207 Grand Ave was acquired by the Redevelopment Agency in 2010 and also is used as a temporary public parking lot with 10 metered parking spaces. The remaining two parcels, 217 -219 Grand Ave, were also acquired by the Redevelopment Agency in 2010. These parcels contain two buildings; Ben Tre Restaurant and Mom's Tofu occupy the building facing Grand Avenue, while the second building at the rear of the property contains a vacant two - bedroom residential unit on the second floor and a garage on the ground floor. The properties were all acquired to combine with adjacent properties to create a lot assemblage that would be ideal for a major transit oriented development in the Downtown. Upon the dissolution of redevelopment agencies by the State of California, the California Department of Finance ( "DOF ") authorized the transfer of the former Redevelopment Agency's property assets to the South San Francisco Successor Agency ( "Successor Agency "). The Successor Agency was then required to develop a Long Range Property Management Plan ( "LRPMP ") that governs the disposition and use of all former redevelopment agency properties. The LRPMP calls for the subject sites to be retained by the City for future development; the LRPMP has been approved by the Oversight Board, and is awaiting approval by the DOF. Staff Report Subject: 255 Cypress Avenue — High Density Mixed -Use Development Date: May 21, 2015 Page 2 of 13 Once the LRPMP receives final approvals, the properties will be transferred from the Successor Agency to the City. On September 24, 2014, the City Council authorized an Exclusive Negotiating Rights Agreement ( "ENRA ") with Brookwood Equities that will lead to a Disposition and Development Agreement ( "DDA ") for potential development of the 255 Cypress Ave and 488 Linden Ave properties. The ENRA includes specific terms for the developments, including requiring prevailing wages for construction and that 20 percent of the units be affordable. If the Planning Commission ultimately approves the requested entitlements, the City Council would review and take action on a DDA for the project at a future meeting. 255 Cypress Project Overview As shown in the Google Earth aerial image below, the 255 Cypress site is located at the southwest corner of Grand and Cypress Avenues, in the heart of Downtown and in close proximity to the future relocated Caltrain Station. The proposed 255 Cypress Project is intended to be a catalyst for the vision that the City has created for the greater Downtown Area. Figure 1: Neighborhood Aerial The 255 Cypress Project consists of a 5 story high - density mixed -use building that will be approximately 60 feet tall. The ground floor will consist of approximately 5,500 square feet of commercial area fronting on Grand and Cypress Avenues. The ground floor will also include the residential entrance lobby on Cypress Ave, a leasing office and resident lounge. Parking will be accessed from 3rd Lane. The upper four stories will consist of 46 apartment units, including a mix of three studio units, 21 one - bedroom units and 22 two - bedroom units. 318 Staff Report Subject: 255 Cypress Avenue — High Density Mixed -Use Development Date: May 21, 2015 Page 3 of 13 GAD AVENUE { w � e r .iii i i .w ,a J i ......i WON" NA ^� mwwwaeanwwimuW rr ti!�iww�ay.B rrF I(1 t � W 1 ...................................................... G" ffi�p Y , ,,,,,,,,,,,,,,,,,,,,,,,,,, ,,,,, _,,,,,,,.,,,,,,,.,,,,,,,.,,,fie. 3RD r Figure 2: 255 Cypress Site Plan Building Architecture The architectural style of the portion of the building fronting on Grand Ave is designed to evoke the general building architecture and massing of the remainder of the Grand Ave corridor. The first two stories of the Grand Ave frontage will consist of a brick the facade with a significant amount of transparent glass at the pedestrian level, providing visual interest to the passing pedestrian on the sidewalk. The third story will have horizontal board siding to provide a more contemporary look. The western half of the fourth and fifth stories of the building are stepped back from Grand Ave so that the apparent height of the building at pedestrian level is in keeping with other existing buildings on Grand Ave. The eastern half of the building adjacent to the intersection of Grand and Cypress Aves is designed to be a gateway element, with all five stories built to the property line. The Cypress Ave frontage includes both a commercial area and the primary residential entrance. The massing of the building is broken up by using a mixture of exterior materials, including stucco, horizontal board siding, and brick the with large expanses of transparent storefronts. 319 Staff Report Subject: 255 Cypress Avenue — High Density Mixed -Use Development Date: May 21, 2015 Page 4 of 13 Figure 3. 255 Cypress Architecture Parking/Loading Residential parking will be provided by a mechanical parking lift system. Residential parking access is provided from 3rd Lane to the proposed mechanical parking lifts. The vehicle entrance is a single lane two -way drive aisle with warning lights to notify when a vehicle is exiting from the development. The parking lifts will provide 59 parking spaces. Two additional accessible parking spaces will be provided on the ground floor. Based on this, each unit will have access to a minimum of one parking space, and additional spaces can be provided for larger units. In addition, a bicycle room provides space for up to 50 bicycles. The mechanical parking lift system consists of two rows of parking; the back row will consist of three vertical levels of parking (one subgrade), while the front row will consist of two vertical levels. As vehicles enter the property, they will approach an entrance gate to the parking system. At the ground floor level, there is always one vacant space available. This vacant space is used for shifting the ground floor parking spaces sideways, thus enabling the upper platform parking space located above to be lowered to approach /ground level. City staff from the Fire, Police, Building and Planning Departments toured a residential project in San Francisco with the proposed parking system, and determined that the system is functional and complies with City requirements. 320 Staff Report Subject: 255 Cypress Avenue — High Density Mixed -Use Development Date: May 21, 2015 Page 5 of 13 Landscaping /Open Space Open space area for residents will be provided on the residential courtyard located on the second floor, adjacent to 3rd Lane. The courtyard includes a mixture of use areas, including both private and public spaces, and will also have direct access to the conference room, fitness room, and tenant amenity room. The courtyard will be surrounded on the north and the east by the 2nd— 5d' floors of residential units. On the street level, the applicant is proposing street trees with native grasses along both Grand and Cypress Avenues. The applicant is also proposing that a parklet be provided on Cypress Ave near the intersection of Grand Ave; this amenity would provide additional public open space that could be used as a seating area for a restaurant occupying the corner commercial tenant space. Staff has included a condition of approval requiring the landscaping along Grand and Cypress Avenues to be consistent with the DSASP, which envisions improved streetscape aesthetics and pedestrian circulation throughout the Downtown area, including street trees planted at regular intervals. ZONING CONSISTENCY Downtown Station Area Specific Plan In January and February of 2015, the City Council adopted the Downtown Station Area Specific Plan ( "DSASP "), as well as amendments to the City's Zoning Ordinance, adding Chapter 20.280 "Downtown Station Area Specific Plan District" to implement the policies and goals in the DSASP. The DSASP covers properties within 0.5 miles of the City's Caltrain Station, which includes the subject property. The General Plan amendments created separate land use designations in keeping with the DSASP. For the subject site, the designation is Grand Avenue Core ( "GAC "). This designation applies to properties with frontage on Grand Ave between Airport Blvd and Spruce Ave. Grand Ave is intended to remain the historic retail center of the City, with historically interesting buildings retained wherever possible. New mixed -use development of underutilized properties is encouraged but guidelines limit building heights directly along Grand Ave in order to respect the historic character of some existing buildings and to create a comfortable pedestrian environment. On the rear portions of Grand - facing lots, taller allowable heights are intended to accommodate new residential uses and increase development opportunities. The GAC allows up to 60 dwelling units per acre; a minimum of 14 dwelling units per acre is required. A maximum of 100 dwelling units per acre would be allowed for development on corner sites meeting specified criteria. Ground level retail uses are required. The General Plan Downtown Sub -Area also includes the following guiding policies in relation to the Downtown: Guiding Policy 3.1 -G -1. Promote Downtown's vitality and economic well- being, and its presence as the city's center. Guiding Policy 3.1. -G -2. Encourage development of Downtown as a pedestrian - friendly mixed -use activity center with retail and visitor - oriented uses, business and personal services, government and professional offices, civic uses, and a variety of residential types and densities. Guiding Policy 3.1 -G -3. Promote infill development, intensification, and reuse of currently underutilized sites. 321 Staff Report Subject: 255 Cypress Avenue — High Density Mixed -Use Development Date: May 21, 2015 Page 6 of 13 Guiding Policy 3.1. -G -5. Use the South San Francisco Downtown Station Area Specific Plan as a guide for General Plan policies for the Downtown Station Area. In conjunction with the final General Plan Guiding Policy listed above, the DSASP includes the following principles that apply to the proposed project: Guiding Principle 1. Revitalize Downtown South San Francisco as a citywide destination that is economically vital, diverse, active, and that encompasses a variety of uses. Guiding Principle 2. Increase development intensities in the Downtown to grow the resident population and thus support a variety of commercial and service uses. Guiding Principle 8. Focus increases in residential and mixed -use densities within 1/4 mile of the Caltrain Station and in areas proximate to Grand Avenue to increase patronage of Caltrain as well as Grand Avenue businesses. Guiding Principle 9. Require pedestrian - oriented ground level retail and service uses on Grand Avenue and in the neighborhood center on Linden between California and Juniper Avenues. Upon construction, the proposed project will entail a high - density residential development that fulfills all of the purpose statements of the GAC District: reinforcing the "main street" of the Downtown by providing a nearly continuous retail frontage with high density residential above and providing high density housing in close proximity to the Downtown and Caltrain Station. General Development Standards The GAC District also includes a variety of general development standards and supplemental regulations that would be applicable to the proposed project. Subject to approval of the Parking Reduction as discussed below, the project would comply with all of the applicable standards; see Attachment 2 — "Zoning Ordinance Compliance" for a complete list. Parking Reduction Residential The parking standards for Downtown districts are included in SSFMC Table 20.330.007 "Required Parking Spaces, Downtown Districts ". For residential units within the Downtown, the table includes a range of minimum and maximum parking ratios based on the number of bedrooms and total square footage of each unit. For example, a studio unit less than 500 square feet in area has a maximum parking ratio of one space per unit, while a unit with 3+ bedrooms or more than 1,101 square feet of area has a minimum requirement of 1.5 parking spaces and a maximum of 2 parking spaces per unit. Based on the stated ratios above, the total parking required for the proposed project would be a minimum of 65 spaces. The applicant is proposing to provide a total of 61 spaces within the mechanical parking lifts and adjacent at -grade spaces. The applicant is requesting that the required number of parking spaces be based on the number of bedrooms per unit, and not the total area of each unit. Therefore, each one - bedroom unit would be provided with one parking space, and every unit with two or more bedrooms would be calculated to require 1.5 parking spaces, in keeping with the Zoning Ordinance requirements. Based on this calculation, the parking calculation would be a minimum of 57 spaces, in keeping with the proposed project. A "Parking Demand Analysis for Proposed Projects at 255 Cypress and 488 Linden" Memorandum analyzing residential parking demand for the subject site was prepared by Nelson\ Nygaard and is attached to this staff 322 Staff Report Subject: 255 Cypress Avenue — High Density Mixed -Use Development Date: May 21, 2015 Page 7 of 13 report (Attachment 3). The memo analyzes the City's current parking requirements for residential units, finding that the parking requirement for a 1- bedroom unit is dependent on the size of the unit (minimum of 1 parking space for a unit between 500 — 800 square feet and minimum of 1.5 parking spaces for a unit between 801 — 1,100 square feet). The memo also analyzes parking demand data, including both national and local data sources, finding that there is no empirical research that shows a direct relationship between an increase in unit size and an increase in parking demand. Parking Reduction - Commercial No parking is proposed to be provided for the commercial area. For commercial uses within the Downtown, the Table 20.330.007 includes a range of minimum parking requirements based on the type of use. The anticipated use types within the development include "Eating and Drinking Establishments ", "Food and Beverage Retail Sales" and "Retail" uses. The most restrictive parking requirement for a restaurant is 1 space per 100 square feet of customer seating area for a Full Service Restaurant, while the most restrictive parking requirement for a retail use is 1 space per 400 square feet of floor area. The parking standards allow for no parking to be required for the first 1,500 square feet of customer seating area, or floor area, as applicable within the use types listed above. The proposed commercial area has been designed to allow multiple tenant spaces that would allow the applicant to comply with this standard. However, in an effort to allow maximum flexibility in the types of uses allowed within the commercial area, the applicant is requesting that a Parking Reduction be considered to allow the commercial area to be developed as one tenant space. If the 5,500 square foot commercial space were occupied by a restaurant use, the customer seating area would occupy approximately half of the space, or 2,250 square feet. Per the allowance that no parking is required for the first 1,500 square feet of customer seating area, only 750 square feet would be included in the parking calculation, resulting in a total parking requirement of 8 spaces for a Full Service Restaurant. If the commercial space were occupied by a retail use, with the reduction of the first 1,500 square feet of floor area, 4,000 square feet would be included in the parking calculation, resulting in a total parking requirement of 10 spaces for a retail use. Per SSFMC Section 20.330.007.0 "Parking Reductions ", the Planning Commission shall review any request for a reduction in the number of required parking spaces for a use within the Downtown Parking District, and make a determination whether there is sufficient parking within the District to accommodate the proposed use. Regarding the residential parking requirement, the project would meet the minimum parking standards if one - bedroom units were treated equally regardless of their square footage. The development is within 3 blocks of the future relocated Caltrain station and SamTrans bus routes, giving residential tenants alternatives to using only single- occupancy vehicles for commute purposes. Therefore, the number of parking spaces proposed is sufficient for the proposed development, and there will continue to be sufficient parking within the Downtown Parking District to accommodate the proposed use. Regarding the commercial parking requirement, the proposed 10 space parking reduction to allow a Retail Sales, Food and Beverage Retail Sales or Eating and Drinking Establishment to occupy the entire commercial area will not result in insufficient parking in the Downtown Parking District. There are over 100 metered parking spaces located on Grand, Cypress, and Miller Avenues and Airport Blvd within one block of the subject site. The Miller Avenue Parking Structure is also approximately one block from the project site; the structure contains 120 metered spaces and 127 permit /hourly spaces. Based on the significant number of parking spaces available on- street within close proximity to the restaurant site, as well as the Miller Avenue Parking Garage 323 Staff Report Subject: 255 Cypress Avenue — High Density Mixed -Use Development Date: May 21, 2015 Page 8 of 13 one block away, staff believes there is adequate parking supply to ensure sufficient public parking is available in the vicinity of the commercial site, and supports the 10 space parking reduction. Staff has included a condition of approval (A -15) requiring the applicant to purchase a minimum of 2 annual parking permits for employees of the business. Community Benefits SSFMC Section 20.280.005.A "Increased Density and FAR Incentive Program" allows an increased to the maximum density and FAR permitted for a building with the approval of a Conditional Use Permit if the public benefits that are included as part of a development project demonstrate a positive contribution that is above and beyond the minimum required impact fees and other requirements of the particular project. The maximum density allowed by -right in the GAC district is 60 units per acre and the maximum FAR allowed by -right is 3.0. The maximum density allowed with an incentive program is 100 units per acre and the maximum FAR is 4.0. The project proposes a maximum density of 99 units per acre, resulting in a total of 46 residential units, and an FAR of 3.69. To allow the increased density of 18 units and increased FAR, the applicant is proposing the following public benefits: • Provision of nine affordable units (20 percent of the total units). • Public space at the retail plaza. • Local business retention by providing a right of first offer of tenant space to Ben Tre and Mom's Tofu in the new building. The applicant has provided a "488 Linden and 255 Cypress Incentives and Public Benefits" memorandum (Attachment 4) that indicates that the value of the proposed public benefit exceeds the value of the additional density. The proposed public benefit will also serve to further the following City objectives: DSASP Guiding Strategy 3: Focus new improvements on Grand Avenue to return this historic corridor to once again being the focus of the community. Encourage retention of existing and local businesses to the Downtown and protect the historic building fabric. DSASP Land Use Strategy LU -4: Establish the highest intensity land uses within 1/4 mile of the Caltrain Station. Here densities up to 120 dwelling units per acre will be encouraged. DSASP Land Use Strategy LU -9: Encourage the provision of affordable housing in the Specific Plan area, by working with non -profit housing developers and through inclusionary on in -lieu fee provisions. DSASP Guiding Principle 25: Improve the public realm of sidewalks and adjoining open spaces throughout the Specific Plan area and particularly within the Pedestrian Priority Zone to create an attractive pedestrian environment. City staff has reviewed the proposed public benefits and believes that they are sufficient. Staff supports the proposed Use Permit to allow increased density and FAR for the project because the proposed public benefits and requested development incentives are suitable to the site and to adjacent uses and structures, the proposed 324 Staff Report Subject: 255 Cypress Avenue — High Density Mixed -Use Development Date: May 21, 2015 Page 9 of 13 public benefits are consistent with the accepted list of public benefits, and reflect a fair balance of costs and benefits to the applicant and the City. GENERAL PLAN CONSISTENCY As discussed above in the Zoning Consistency section, the General Plan Land Use Designation for the site is Grand Avenue Core. The General Plan includes specific policies related to development within the Downtown, in an effort to "encourage development of Downtown as a pedestrian - friendly mixed -use activity center with retail and visitor - oriented uses, business and personal services, government and professional offices, civic uses, and a variety of residential types and densities." The proposed project will conform to the General Plan Land Use Policies by reusing an underutilized site to construct a high- density mixed -use development that will provide a pedestrian - friendly mixed -use activity center on Grand Avenue in close proximity to the improved Caltrain Station. The project also provides a strong architectural statement that is both in keeping with existing buildings on Grand Ave and is a gateway development near the eastern entrance to the Grand Ave corridor. The project implements the goals of the Downtown Station Area Specific Plan and the project design is consistent with the City's Design Guidelines as it relates to building design, form and articulation. Housing Element Opportunity Sites The Housing Element is one of the seven State - mandated Elements of the General Plan. Unlike other elements, the Housing Element must be updated by deadlines set by the State; the Housing Element for the housing cycle of 2015 -2022 was certified by the State in April 2015. The Housing Element is the blueprint for future housing development in the city and includes goals, policies, and programs that direct residential decision - making. The Housing Element is required by state law to identify how and where the housing needs of each community will be met. For the upcoming housing cycle, the City of South San Francisco has a Regional Housing Needs Allocation ( "RHNA ") of 1,864 units. To show that the City has properly zoned land to meet the RHNA numbers, the City is required to identify adequate opportunity sites throughout the jurisdiction. The available site inventory focuses on sites with near - term development potential, typically where the site is currently vacant or highly underutilized. In the recently certified Housing Element, the Downtown area was identified as providing many potential opportunity sites, including the subject site, which was included as a portion of "Site 12 ". Assuming a density of 64 dwelling units per acre, less than then maximum density allowed within the Grand Avenue Core district, the site was identified as being able to accommodate at least 31 units. The proposed project would exceed this projection by building at a higher density, and therefore would comply with the General Plan Housing Element. DESIGN REVIEW BOARD The Design Review Board reviewed the project at their meeting of April 21, 2015. The Board was supportive of the overall project, with the following general comments: 1. The Board liked the overall project. 2. Consider using 3/4 inch brick instead of the �/z brick to provide a greater shadow line. 3. Revise the design of the backflow preventer alcove to have a more coordinated appearance with the remainder of the 3rd Lane elevation. 325 Staff Report Subject: 255 Cypress Avenue — High Density Mixed -Use Development Date: May 21, 2015 Page 10 of 13 4. Consider adding landscaping around the parklet area with some decorative planters and street trees; the corner street tree should be a broadleafed evergreen species. The Project Plans attached to this staff report (Exhibit B of the Entitlements Resolution) have been modified in response to comments made by the Design Review Board. Comment 2 above will be a consideration when the applicant is preparing construction drawings for the project, and is not currently proposed as a required element. The applicant has revised the 3rd Lane elevation and the landscaping plan based on the Boards' remaining comments. Staff is of the opinion that the applicant has adequately addressed all of the specific comments. NEIGHBORHOOD MEETING A neighborhood meeting was held on April 21, 2015 in which approximately 10 residents attended. Concerns raised at the meeting included the following: • Provide different types of parking zones within the Downtown, including short -term parking and loading zones • Is adequate parking provided for the commercial and residential uses • Provide adequate public seating and landscape areas with new high - density development Downtown Parking Zones The City recently received a grant to prepare a Downtown Parking Management Study, which will analyze appropriate parking management strategies, including parking zones, throughout the area. Adequate Parking Subject to approval of the Parking Reduction request to allow all 1- bedroom units to have the same parking requirement regardless of unit square footage, and to allow a 10 space reduction for the commercial area, the project would provide parking in conformance with all other applicable Zoning Ordinance standards. The residential portion of the project is in keeping with General Plan Principles to increase residential densities within 1/4 mile of the Caltrain Station and in areas proximate to Grand Avenue to increase patronage of Caltrain as well as Grand Avenue businesses. Further, the commercial portion of the project is supported by the surrounding public parking, including the Miller Avenue Parking Garage. Public Seating and Landscaping within DSASP The City is currently identifying unified design improvements within the public right -of -way, including landscaping and seating. All development projects within the DSASP area will be required to coordinate with the City to be in conformance to any adopted guidelines. SUSTAINABILITY / CLIMATE ACTION PLAN The proposed project is consistent with recent sustainability regulations that have been adopted at both the State, regional and local levels. Examples include Senate Bill 375, passed in 2008, which aims to create more efficient communities that provide residents with alternatives to using single occupancy vehicles. Projects that link higher density development to transit are in keeping with this goal. At the local level, the DSASP area aims to link the downtown with the Caltrain Station and other regional transit, including SamTrans. The applicant is proposing a high - density residential project that will be located within 1/4 mile of the Caltrain station 326 Staff Report Subject: 255 Cypress Avenue — High Density Mixed -Use Development Date: May 21, 2015 Page 11 of 13 and within walking distance of regional and local bus routes, consistent with all of the above mentioned sustainability goals. The applicant has indicated that the preliminary sustainability goal is LEED Certification. Accordingly, the building incorporates a variety of green building features such as passive ventilation and cooling, large windows to provide natural daylight, robust insulation, high performance glazing, and a selection of sustainably- produce materials. The City adopted a Climate Action Plan ( "CAP ") in February 2014; the CAP serves as South San Francisco's greenhouse gas reduction strategy. The CAP includes requirements applicable to new development projects; following are the specific requirements applicable to the proposed project. • Require all new development to install conduit to accommodate wiring for solar. • Encourage the use of high- albedo surfaces and technologies as appropriate, as identified in the voluntary CALGreen standards. • Revitalize implementation and enforcement of the Water Efficient Landscape Ordinance. In addition to the requirements listed above, the CAP includes additional measures that are encouraged in order to help with the City's greenhouse gas reduction efforts: • Integrate higher- density development and mixed -use development near transit facilities and community facilities, and reduce dependence on autos through smart parking practices. • Work with developers of multi - family properties and nonprofit groups to maximize energy efficiency in new construction. • Encourage the use of CALGreen energy efficiency measures as a preferred mitigation for CAP streamlining. • Promote on -site renewable energy or distributed generation energy systems in new and existing residential and nonresidential projects. Encourage developers of multi - family and mixed -use projects to provide options for on -site renewable electricity or install distributed generation energy systems, similar to the statewide Homebuyer Solar program. As currently designed, the proposed project will comply with many of the standards above, and staff will continue to work with the applicant to incorporate as many sustainable features as possible into the project. Staff has included Condition of Approval A -13, which requires the applicant to revise the project drawings to include the CAP requirements stated above subject to Chief Planner review and approval prior to the issuance of a building permit. Subject to the conditions of approval, the project is consistent with the City's CAP. ENVIRONMENTAL REVIEW The City adopted the DSASP on February 11, 2015. The DSASP EIR was prepared as a Program EIR, pursuant to Section 15168 of the California Environmental Quality Act ( "CEQA "), and this document was certified by the City Council following public review and comment. The DSASP EIR found that significant and unavoidable impacts would result from future development anticipated in the DSASP in regards to Air Quality, Cultural Resources, Noise and Traffic /Transportation. 327 Staff Report Subject: 255 Cypress Avenue — High Density Mixed -Use Development Date: May 21, 2015 Page 12 of 13 In addition, the DSASP EIR included a Mitigation Monitoring and Reporting Program ( "MMRP ") that identified mitigation measures required of development projects within the DSASP Area to show that the project components are within the environmental parameters analyzed in the DSASP EIR. These include the following additional studies: Air Quality • MM4.2 -3 — A Health Risk Assessment (HRA) shall be prepared by a qualified air quality professional for development of a project that would introduce new sensitive receptors in the study area within the allowable siting distance. If a potentially significant health risk is identified, the HRA shall identify appropriate measures to reduce the potential health risk to below significant levels. A "255 Cypress Avenue Air Quality Analysis and Health Risk Assessment" Memorandum analyzing conformance with this mitigation measure was prepared by RCH Group and is attached to this staff report (Attachment 5). The analysis determines that the proposed Project would not result in any new impacts related to Air Quality, and therefore the Project is within the parameters analyzed within the DSASP EIR. A copy of the Final MMRP is also attached to this staff report (Attachment 6); staff will work with the applicant during project construction to ensure that all required mitigation measures are incorporated. CONCLUSION The proposed project seeks to transform an underutilized site into a high - density mixed -use development that will serve as a gateway project to Grand Ave, bring new residents into close proximity to the Caltrain station and assist in creating a pedestrian - friendly activity center. The 35 -unit high - quality residential development furthers the City's goals for transit - oriented development in close proximity to the South San Francisco Caltrain Station. In addition, the proposed development conforms to the vision articulated in the General Plan, (including the Housing Element), and is in line with standards and guidelines of the Downtown Station Area Specific Plan District. Therefore, staff recommends that the Planning Commission adopt a Resolution approving the Use Permit, Design Review and Parking Reduction based on the attached draft findings and subject to the attached draft conditions of approval. , �1 d Billy ross, Senior Planner Attachments: 1. Planning Commission Entitlement Resolution with Exhibits a. Conditions of Approval b. 255 Cypress Avenue Project Plans, dated May 21, 2015 2. 255 Cypress — Zoning Ordinance Compliance 3. Parking Demand Analysis for Proposed Projects at 255 Cypress and 488 Linden, dated May 11, 2015 4. 488 Linden and 255 Cypress Incentives and Public Benefits Memorandum, dated May 11, 2015 328 Staff Report Subject: 255 Cypress Avenue — High Density Mixed -Use Development Date: May 21, 2015 Page 13 of 13 5. 255 Cypress Avenue Air Quality Analysis and Health Risk Assessment, dated May 5, 2015 6. Final Mitigation Monitoring and Reporting Program from DSASP EIR 7. Design Review Board Minutes — April 21, 2015 2442385.1 329 255 CYPRESS AVENUE — ZONING ORDINANCE COMPLIANCE Zoning District — Grand Avenue Core (GAC) GAC Base Dev Standards Minimum Lot Size Minimum Lot Width Floor Area Ratio Min FAR Max FAR Residential Density (units /acre) Min Density Max Density Height Max Bldg Height Min Ground Floor Height Yards Grand Ave Frontage Ped Priority Zone Street Frontage Interior Side Rear Maximum Lot Coverage Min Usable Open Space Min Amount of Landscaping Additional Development Standards Increased Density, FAR Heights and Building Setbacks Ground Floor Height Finished Floor Height Build -to Line Corner Build Area Residential Usable Open Space Private Storage Space Limitations on Curb Cuts Truck Docks, Loading, and Service Required Bicycle Parking Supplemental Regulations Required Active Frontage Grand Ave Bldg Transparency Arch Articulation Variety in Wall Plane Variety in Height or Roof Fagade Design Allowed Proposed 5,000sf 20,198sf 50' 136' 1.5 3.0 (4.0 w/ incentives) 3.69 14 60 (100 w/ incentives) 100 45 -65' 60' 15'; 12' min clearance 15' -9" 0 0 Property line or 10' Property Line — 10' 0 0 0 0 100% 100 100sf per unit 121sf per unit n/a n/a Allowed Proposed Public Benefits Complies 15' (12' clearance floor /ceiling) Complies 1St Floor Res, 5' above grade Complies No setback on Grand, 65% on Cypress Complies Complies Complies 200 cubic feet /unit Complies Min 10' from intersection Complies Complies Complies Allowed Proposed 75% of frontage active uses Complies 60% of frontage Complies 330 Complies Complies Complies Balconies Blank Walls Exterior Building Materials /Colors Building Orientation /Entrancies Unbundled Parking Limitation on Parking Locations Max Block Length Site and Development Regulations Landscaping (20.300.007) Lighting and Illumination (20.300.008) Screening (20.300.012) Trash and Refuse Collection (20.300.014) Complies No more than 20' Complies Complies Oriented to face street Complies 50% of req'd parking Complies Complies Complies Allowed Proposed Complies Complies Complies Complies Parking Standards (20.330) Allowed Proposed Location of Required Parking Complies Parking Reductions Requested Bicycle Parking (20.330.008) Complies On -Site Loading (20.330.009) Complies Parking Area Design and Dev Standards (20.330.010) Complies Residential Parking Requirements — Downtown Districts Proposed Parking Provided # of Units Downtown Parking Req't Parking Provided Studio Standards 1 per unit max Studio or 1 per unit max 21 Less than 500 sf 21-32 2 -Bdrm 1 -Bdrm or 8 1— 1.5 per unit 8-12 500 -800 sf 46 57-75 2 -Bdrm or 33 1.5 — 1.8 per unit 49.5-59.4 801 -1,100 sf 3 -Bdrm or more, 5 1.5 — 2 per unit 7.5-10 1,101 sf or larger Total 46 65-81 Proposed Parking Provided 331 # of Units Downtown Standards Parking Req't Parking Provided Studio 3 1 per unit max 3 1 -Bdrm 21 1— 1.5 per unit 21-32 2 -Bdrm 22 1.5 — 1.8 per unit 33-40 Total 46 57-75 61 331 Attachment 4.b 255 Cypress — Planning Commission Minutes (May 21, 2015) 332 • Commission questioned why mechanical parking stackers were chosen. Mr. Heery responded that users in other residential projects with this system were strong advocates, which makes the system advantageous from a marketing perspective. There is also a cost advantage as they don't have to excavate for a subterranean garage. Mr. Heery further added that they intend to have a minimum of 1 electric charging station and will expand as demand requires. Mr. Baum answered the question regarding the size of the vehicles stating the garage will accommodate all but the largest SUVs, but typically the tenants are not driving the large vehicles. He further added that multi - family housing uses less water per person than a single - family home as well as incorporating green energy. In response to the flow of cars onto Tamarack Lane, he informed the Commission that the machine regulates the pace of cars coming out. Studies have found it better for traffic to exit rather than enter on Tamarack Lane. • Commission asked about the parking for businesses around the area. Senior Planner Gross responded that possibly a residential parking permit program, which isn't in place currently, may be an option. • Commission asked what the options are if there are problems getting into the parking spaces. Mr. Heery stated there won't be a parking attendant but there will be on -site managers. Mr. Heery informed the Commission he would be willing to organize a tour to allow the Planning Commissioners to see an existing project with the parking stackers in person. As far as green energy it will be LEED certified. Senior Planner Gross further advised that the Downtown Station Area Specific Plan EIR looked at traffic impacts with this type of development and identified mitigation measures related to traffic movement. • Commission asked how many parking spaces a tenant would have access to and whether they could get access to additional spaces. Mr. Baum stated each tenant is assigned only one space. He further informed the Commission that they studied this system very carefully and it is remarkably trouble -free. • Commission expressed concerns regarding ground floor uses and asked if the fitness center would be open to public membership. Mr. Baum stated it would be only for the tenants. • Commission added that the City is trying to invigorate the Downtown and having businesses on the ground floor would provide more jobs for the community. Mr. Heery informed the Commission they are leaving this option open to have commercial /retail uses in the future but not at this time. • Commission inquired about the type of security proposed for the lounge area and if only one elevator was adequate for a 5 -story building. Mr. Heery stated the lounge would likely be secured with a keycard. Alan Katz, Brookwood Equities, informed the Commission that the elevator being installed is a high quality, new concept with a much better service record and strong service program. He also added that he is an Urban Designer and mindful of retail on the ground floor but expressed concern of having empty commercial /retail sites. • Commission inquired whether the 2 doors to Tamarack Lane could be switched to roll -up doors for safety. Mr. Heery stated if PG &E will allow they would be happy to accommodate. • Commission inquired on how far the Miller parking garage is from the project. Senior Planner Gross responded it is less than 2 blocks. • Commission suggested as an option looking into monthly parking at the garage for residents. Commission expressed concern with only one electric charging station and suggested doing more research with other similar projects. • Commission suggested the City be proactive to provide signage to direct vehicular traffic to parking garages. • Commission acknowledged that this is step in the right direction to revitalize by creating the foot traffic in the Downtown area. • Commission suggested continuing the project to come back with focus on parking or possibly have this go to City Council. ECD Director Greenwood added perspective explaining that lack of parking in downtown is not specific to this project. He further added that given the proximity to transit staff feels there is enough parking for this type of project. The parking system is new to South San Francisco but staff has researched it thoroughly and is comfortable with the system. Motion -- Commissioner Martin /Second -- Commissioner Nagales to adopt a Resolution making findings and approving P15- 0016:Up15 -002, DR15 -0015 and PE15 -0002 based on the attached draft Findings and subject to attached draft Conditions of Approval. Approved by roll call vote 6 -0. 3. 255 Cypress Mixed -Use Development City of South San Francisco /Owner Brookwood Equities /Applicant May 21, 2015 Minutes 333 Page 3 of 6 255 Cypress Ave. P15 -0017: UP15 -0003, DR15 -0016 & PE15 -0001 Use Permit, Design Review and Parking Reduction to construct a new 5 -story mixed -use building with approximately 5,500 square feet of commercial space and 46 residential units with mechanical parking stackers at 255 Cypress Avenue in the Grand Avenue Core (GAC) Zoning District in accordance with SSFMC Chapters 20.280, 20.330, 20.480 & 20.490. Chairperson Wong opened the public hearing and called for staff report. Senior Planner Gross stated that this type of mixed -use project is envisioned in Downtown Station Area Specific Plan for the Downtown with residential entering on Cypress and retail entering on Grand Avenue, along with close proximity to the CalTrain station. Bob Baum, architect, stated that the massing of the building is in conformance with the heights mandated in the Downtown Station Area Specific Plan and the base, brick -clad element is intended to relate to the scale of the existing buildings on Grand Avenue, respectful without being the same. He further added the Design Review Board had reacted positively to the proposed project. Commissioner Martin left at 8:45pm. Eric Gavidia, representing the land owner and residents of 223 & 225 Grand Avenue, stated support for the overall project. He informed the Commission that the 223 -225 Grand Ave building has windows on the property line on the west elevation, and suggested that the proposed project include a design adjustment to include a light well and allow a dog run to accommodate the 223 Grand windows. Robert Estrada waiting for Grand Avenue to reach its potential but expressed concern with keeping the historic scale and architecture. He stated that the proposed project is ugly and it would be a shame to have this building in the Downtown. There being no more speakers he public hearing was closed. Commission comments /questions: • Commission reiterated the issues with parking, similar to the previous comments for the 488 Linden project. The Commission inquired about the swing of the ground -floor doors along Third Lane, suggesting roll -up doors as an alternative. • Commission recommended signage to control traffic on Third Lane. • Commission suggested to be mindful of the height of street trees and impact on signage and delivery trucks. Senior Planner Gross stated that the parking management looks at delivery vehicles and loading. • Commission glad to hear that the existing businesses will be given the option to lease tenant space within the new project. • Commission expressed concern with the closeness of the seating area in the proposed parklet to the street. Senior Planner Gross stated that it would be designed with a barrier to withstand a car. • Commission suggested considering wayfinding signs to businesses. • Commission clarified the total number of residential units as being 46, not 35 as stated in staff report. Motion -- Commissioner Faria /Second -- Commissioner Ruiz to approve the draft Conditions of Approval P15- 0017:UP15 -0003 DR15 -0016 & PE15 -0001. Vice Chairperson Khalfin amended the motion to read based on attached draft Findings and subject to attached draft Conditions of Approval /Second -- Commissioner Ruiz. Approved by roll call vote (5 -0) 4. Massage Establishments City of South San Francisco - Owner /Applicant Citywide P07- 0136:ZA15 -0003 Zoning Text Amendments to modify regulations related to Massage Establishment uses, citywide, in May 21, 2015 Minutes 334 Page 4 of 6 Attachment 4.c 255 Cypress — Planning Commission Resolution 2766 -2015 - Entitlements 335 RESOLUTION NO. 2766 -2015 PLANNING COMMISSION, CITY OF SOUTH SAN FRANCISCO STATE OF CALIFORNIA A RESOLUTION RECOMMENDING APPROVAL OF A USE PERMIT, DESIGN REVIEW AND PARKING REDUCTION, FOR A MIXED -USE DEVELOPMENT AT 255 CYPRESS AVENUE IN THE GRAND AVENUE CORE ZONING DISTRICT. WHEREAS, the South San Francisco Successor Agency ( "Owner ") and Brookwood Group ( "Applicant ") have proposed construction of a five -story mixed -use residential and commercial development, consisting of 46 residential apartments above approximately 5,500 square feet of ground - floor commercial space and 61 ground level parking spaces ( "Project ") on an approximately 20,200 square foot site located at 201 -219 Grand Avenue ( "Project Site ") in the City of South San Francisco ( "City "); and, WHEREAS, Applicant seeks approval of a Use Permit, Design Review and Parking Reduction for the Project; and, WHEREAS, approval of the Applicant's proposal is considered a "project" for purposes of the California Environmental Quality Act, Pub. Resources Code § 21000, et seq. ( "CEQA "); and, WHEREAS, the City Council certified an Environmental Impact Report ( "EIR ") on January 28, 2015 (State Clearinghouse number 2013102001) in accordance with the provisions of the California Environmental Quality Act (Public Resources Code, §§ 21000, et seq., "CEQA ") and CEQA Guidelines, which analyzed the potential environmental impacts of the development of the Downtown Station Area Specific Plan; and, WHEREAS, the Project would not result in any new significant environmental effects or a substantial increase in the severity of any previously identified effects beyond those disclosed and analyzed in the Downtown Station Area Specific Plan EIR certified by City Council, WHEREAS, on May 21, 2015 the Planning Commission for the City of South San Francisco held a lawfully noticed public hearing to solicit public comment and consider the proposed entitlements and take public testimony. NOW, THEREFORE, BE IT RESOLVED that based on the entirety of the record before it, which includes without limitation, the California Environmental Quality Act, Public Resources Code §21000, et seq. ( "CEQA ") and the CEQA Guidelines, 14 California Code of Regulations § 15000, et seq.; the South San Francisco General Plan and General Plan EIR; the Downtown Station Area Specific Plan and the Downtown Station Area Specific Plan EIR; the South San Francisco Municipal Code; the Project applications; the 255 Cypress Avenue Project Plans, as prepared by Gould Evans Architects, dated May 21, 2015; the 255 Cypress Avenue Air Quality Analysis and Health Risk Assessment, as prepared by RCH Group, dated May 5, 2015, including all appendices thereto; all site plans, and all reports, minutes, and public testimony submitted as part of the Planning Commission's 336 duly noticed May 21, 2015 meeting; and any other evidence (within the meaning of Public Resources Code §21080(e) and §21082.2), the Planning Commission of the City of South San Francisco hereby finds as follows: A. General Findings The foregoing recitals are true and correct. 2. The Exhibits attached to this Resolution, including the Conditions of Project Approval (Exhibit A) and the 255 Cypress Avenue Project Plans (Exhibit B) are each incorporated by reference and made a part of this Resolution, as if set forth fully herein. The documents and other material constituting the record for these proceedings are located at the Planning Division for the City of South San Francisco, 315 Maple Avenue, South San Francisco, CA 94080, and in the custody of the Director of Economic and Community Development, Alex Greenwood. 4. Based upon the testimony and information presented at the hearing and upon review and consideration of the environmental documentation provided, the Planning Commission, exercising its independent judgment and analysis, finds that the Project falls within the environmental parameters analyzed in the Downtown Station Area Specific Plan EIR, and that the Project would not result in any new significant environmental effects or a substantial increase in the severity of any previously identified effects beyond those disclosed and analyzed in the EIR certified by City Council, because in keeping with the DSASP EIR Mitigation Monitoring and Reporting Program, the project prepared an Air Quality and Health Risk Assessment that determined that the Project would not result in any new impacts related to Air Quality. B. Use Permit The proposed Project is consistent with the standards and requirements of the City's Zoning Ordinance and with the provisions of the Grand Avenue Core Zone District. The Project meets or exceeds all of the general development standards of the Grand Avenue Core District, with the exception of the increased density and floor area ratio (FAR). However, the increased density and FAR is permissible and warranted by the City's Zoning Ordinance subject to the provision of sufficient public benefits included as part of the development project and based on the findings contained in B.B. 2. The proposed Project is consistent with the General Plan by creating a mixed -use environment that emphasizes pedestrian - activity with buildings built up to the property line on Grand Avenue, provides a well - articulated and visually engaging development that implements the goals of the Downtown Station Area Specific Plan, is consistent with the City's Design Guidelines as they relate to building design, form and articulation and provides commercial uses along both Grand 337 Avenue and Cypress Avenue. The proposed use will not be adverse to the public health, safety, or general welfare of the community, nor detrimental to surrounding properties or improvements, because the proposed use is consistent with the existing uses in the vicinity of the site, including the commercial and residential. The Project proposes mixed -use commercial and high - density residential uses on a site located in the City's Downtown Station Area Specific Plan District, which is intended for this type of use. The General Plan has analyzed this type of use in the Grand Avenue corridor, and concluded that such mixed -use commercial and residential uses are not adverse to the public health, safety, or welfare. As the proposed Project is consistent with other mixed -uses land uses in the Grand Avenue Core area, approval of the Project will not be detrimental to the nearby properties. 4. The proposed Project complies with applicable standards and requirements of the City's Zoning Ordinance, with the exception of the increased density and FAR. The stated exceptions are permissible and warranted by the City's Zoning Ordinance subject to the provision of sufficient public benefits included as part of the development project. The proposed Project is located in the Grand Avenue Core District and, subject to the increased density and FAR discussed above, meets the minimum standards and requirements for that district. 5. The design, location, size, and operating characteristics of the proposed Project are compatible with the existing and reasonably foreseeable future land uses in the vicinity because the Project proposes commercial and residential uses in the Grand Avenue Core district, which is specifically intended for such uses. 6. The site is physically suitable for the type of development and density proposed, as the mixed -use commercial and residential uses will benefit from being located in close proximity to the South San Francisco Caltrain Station, Grand Avenue and the overall Downtown Station Area Specific Plan Area, and the size and development is appropriate for the location and meets the City's land use and zoning standards. 7. The Project is consistent with CEQA for the reasons stated in Finding A.4 above. 8. The proposal would result in a Project whose proposed public benefits and requested development incentives are suitable to the site and relate appropriately to adjacent uses and structures. The provision of 20 percent affordable units is in keeping with Downtown Station Area Specific Plan Land Use Strategy LU -9, which encourages the provision of affordable housing in the Specific Plan area. Providing the existing businesses on the site the right of first offer for the future commercial spaces allows for the retention of successful businesses that have assisted in creating the current vitality of the Downtown. The provision of additional public space at the retail plaza will improve the public realm of sidewalks and adjoining open spaces at an important intersection on the Grand Avenue corridor. Finally, the provision of additional residential units through the increased density will provide more residents within the downtown to create a mixed -use activity center along Grand 338 Avenue. 9. The proposed Project would be consistent with the accepted list of public benefits outlined in Section 20.280.004(A). The provision of public space at the retail plaza is in keeping with preference d, "Funding for enhanced public spaces ", by providing additional public seating area adjacent to the public right -of -way. The provision of right of first offer of commercial tenant space within the new building to the existing businesses on the site is in keeping with preference f, "Tenant space for local businesses or existing businesses in need of relocation ". The provision of affordable housing units is in keeping with preference i, "Other developer proposed incentives achieving a similar public benefit ", by providing a housing benefit that furthers Downtown Station Area Specific Plan Land Use Strategy LU -9, which encourages the provision of affordable housing in the Specific Plan area. 10. The proposal reflects a fair financial balance of costs and benefits to the applicant and the City. C. Design Review The Project, including Design Review, is consistent with Title 20 of the South San Francisco Municipal Code because the Project has been designed as a high - density mixed -use commercial and residential project which will provide a pedestrian - friendly, transit - oriented environment with sustainability elements incorporated. 2. The Project, including Design Review, is consistent with the General Plan because the proposed high - density mixed -use commercial and residential development is consistent with the policies and design direction provided in the South San Francisco General Plan for the Grand Avenue Core land use designation by encouraging the development of a mixed -use pedestrian- oriented activity center within close proximity to the South San Francisco Caltrain Station and Downtown Station Area Specific Plan area. 3. The Project, including Design Review, is consistent with the applicable design guidelines adopted by the City Council in that the proposed Project is consistent with the Downtown Station Area Specific Plan Design Guidelines. 4. The Project is consistent with the Use Permit for the reasons stated in Section B, above. 5. The Project is consistent with the applicable design review criteria in South San Francisco Municipal Code Section 20.480.006 ( "Design Review Criteria ") because the project has been evaluated by the Design Review Board on April 21, 2015, and found to be consistent with each of the eight design review criteria included in the "Design Review Criteria" section of the Ordinance, and the Design Review Board. 339 D. Parking Reduction 1. There is adequate parking supply within the Downtown Parking District to accommodate the on -site parking needs of the proposed Project because of the proximity of the site to the future relocated Caltrain station and SamTrans bus routes, the Miller Avenue Parking Garage and metered parking spaces located along Grand, Cypress and Miller Avenues and Airport Boulevard, and because the project will provide sufficient parking based on the bedroom count of each unit. NOW, THEREFORE, BE IT FURTHER RESOLVED that subject to the Conditions of Approval, attached as Exhibit A to this resolution, and conditioned upon the approval of the Disposition and Development Agreement on terms acceptable to the Successor Agency, the Oversight Board and Department of Finance, the Planning Commission of the City of South San Francisco hereby makes the findings contained in this Resolution, and approves the Use Permit, Design Review and Parking Reduction for the Project. BE IT FURTHER RESOLVED that this Resolution shall become effective immediately upon its passage and adoption. I hereby certify that the foregoing resolution was adopted by the Planning Commission of the City of South San Francisco at the regular meeting held on the 21st day of May, 2015 by the following vote: AYES: Chairperson Wong, Vice Chairperson Khalfin, Commissioner Faria, Commissioner Martin Commissioner Naaales and Commissioner Ruiz NOES: ABSTENTIONS: ABSENT: Commissioner Lujan Attest: /s /Alex Greenwood Alex Greenwood Secretary to the Planning Commission 340 Attachment 5 Planning Commission Documents for 418 Linden Avenue a. Staff Report (May 21, 2015) b. Minutes (May 21, 2015) c. Planning Commission Resolution 2765 -2015 - Entitlements 341 Attachment 5.a 418 Linden - Planning Commission Staff Report (May 21, 2015) 342 Planning Commission Staff ReDort DATE: May 21, 2015 TO: Planning Commission SUBJECT: 488 Linden Multi - Family Residential - Use Permit, Design Review and Parking Reduction to construct a new residential development consisting of 38 apartments with mechanical parking lifts at 488 Linden Avenue in the Downtown Transit Core (DTC) Zoning District in accordance with Chapters 20.280, 20.300, 20.330, 20.380, 20.480 and 20.490. Address: Owner: Applicant: Case No.: RECOMMENDATION 488 Linden Ave (APNs 012 - 314 -010) City of South San Francisco Brookwood Group P15 -0016: UP15 -0002, DR15 -0015 & PE15 -0002 That the Planning Commission conduct a public hearing and adopt a Resolution making findings and approving Planning Project P15 -0016, including UP15 -0002, DR15 -0015, and PE15 -0002, based on the attached draft findings and subject to the attached draft conditions of approval. BACKGROUND /DISCUSSION Introduction The project site is 14,000 square feet, and located on the east side of Linden Avenue between Lux Avenue and Tamarack Lane. It is currently used as a temporary public parking lot, but was originally developed as "Mel's Drive -In" in the 1950's, and was more recently home to the "Allstar Cafe". The surrounding neighborhood includes a mix of commercial and residential (single - family and multi - family) development; Grand Avenue is two blocks to the south. Figure 1: Neighborhood Aerial Staff Report Subject: 488 Linden Avenue — High Density Residential Development Date: May 21, 2015 Page 2 of 10 The 488 Linden Avenue property was conveyed to the City of South San Francisco ( "City ") in 2008 by Myers Development in lieu of constructing 32 "work force" housing units as part of the Terrabay Development. In 2012, the City approved entitlements (P10 -0055) to construct a 60 -foot tall four -story mixed -use condominium project including 6,200 square feet of commercial space on the ground floor, 25 residential units on the upper floors, and below grade parking. The entitled project was not constructed due to financial constraints. On September 24, 2014, the City Council authorized an Exclusive Negotiating Rights Agreement ( "ENRA ") with Brookwood Equities that will lead to a Disposition and Development Agreement ( "DDA ") for potential development of the 255 Cypress Ave and 488 Linden Ave properties. The ENRA includes specific terms for the developments, including requiring prevailing wages for construction and that 20 percent of the units be affordable. If the Planning Commission ultimately approves the requested entitlements, the City Council would review and take action on a DDA for the project at a future meeting. 488 Linden Project Overview The new 488 Linden Project is similar to the previously entitled project, but is currently proposed as a residential only development with no below -grade parking. The revised project scope consists of a 5 -story high- density residential building that will be approximately the same height, 60 feet, as the previously approved project; the additional story is created by having lower ceiling heights and less excess height on the top floor. The ground floor will consist primarily of support uses for the residential units, including the entrance lobby, a resident lounge, fitness room and bicycle storage. One residential unit will also be on the ground floor, as will parking accessed from the rear circulation aisle. The upper four stories will consist of 37 residential uses, including a mix of four studio units, 18 one - bedroom units, 11 two - bedroom units and five three - bedroom units. L MENUE si 1 i , Wpm uuX � Figure 2: 488 Linden Site Plan The project was designed with the principles of the recently adopted Downtown Station Area Specific Plan ( "DSASP ") in mind, creating a high- density, pedestrian- oriented residential development in close proximity to the Caltrain station and the Downtown area. The buil3di g design emphasizes the importance of the pedestrian Staff Report Subject: 488 Linden Avenue — High Density Residential Development Date: May 21, 2015 Page 3 of 10 experience, with a store -front appearance along the Linden Avenue frontage providing pedestrian access to the residential lobby at the corner of Linden and Lux Avenues, as well as the resident lounge, fitness room and 1 residential unit. The ground floor spaces are designed with flexibility to accommodate low- intensity commercial uses along Linden Avenue in the future if desired. Building Architecture The architectural style of the proposed project is Mediterranean /Spanish Colonial Revival, in keeping with the previously entitled project. The general sensibility is classical, with a symmetrical composition that allows for some variation to accommodate site features and functional considerations. The material palette include a cementitious finish on the distinct building base, cement plaster and stucco moulding on the upper portion, and a composition shingle hipped roof. The building design emphasizes the horizontal appearance to minimize the apparent height of the building. Figure 3. 488 Linden Architecture Parking/Loading Residential parking access is provided from Lux Avenue to a one -way circulation aisle at the rear of the property, exiting onto Tamarack Lane. Parking will be provided by mechanical puzzle lifts on the ground floor. The parking lifts will provide 47 parking spaces — each unit will have access to a minimum of one parking space, and additional spaces can be provided for larger units. In addition, a bicycle room provides space for up to 40 bicycles. The mechanical parking lift system consists of two rows of parking; the back row will consist of three vertical levels of parking (one subgrade), while the front row will consist of two vertical levels. As vehicles enter the property, they will approach an entrance gate to the parking system. At the ground floor level, there is always one vacant space available. This vacant space is used for shifting the ground floor parking spaces sideways, thus enabling the upper platform parking space located above to be lowered to approach /ground level. City staff 345 Staff Report Subject: 488 Linden Avenue — High Density Residential Development Date: May 21, 2015 Page 4 of 10 from the Fire, Police, Building and Planning Departments toured a residential project in San Francisco with the proposed parking system, and determined that the system is functional and complies with City requirements. Landscaping /Open Space The primary open space area for residents will be provided on the roof -top terrace. The terrace includes both landscaping and general use areas, and is screened by the residential units on the fifth floor. Additionally, fifteen of the units on the rear of the building have private balconies facing towards the east. On the street level, the applicant is proposing street trees with native grasses along both Linden and Lux Avenues. Staff has included a condition of approval requiring the landscaping along Linden and Lux Avenues to be consistent with the DSASP, which envisions improved streetscape aesthetics and pedestrian circulation throughout the Downtown area, including street trees planted at regular intervals. ZONING CONSISTENCY Downtown Station Area Specific Plan In January and February of 2015, the City Council adopted the DSASP, as well as amendments to the City's General Plan and Zoning Ordinance, adding Chapter 20.280 "Downtown Station Area Specific Plan District" to implement the policies and goals in the DSASP. The DSASP covers properties within 0.5 miles of the City's Caltrain Station, which includes the subject property. The General Plan created separate land use designations in keeping with the DSASP. For the subject site, the designation is Downtown Transit Core ( "DTC "). This designation applies to the area that lies within a 1/4 mile or a five- minute walk of the reconfigured Caltrain Station and undercrossing. It is bounded by Lux Avenue on the north, which is one of the streets adjacent to the proposed project. Due to its proximity to the Caltrain Station, the DTC is the area most suitable for the highest intensities of new development in the Downtown Area, which will help to support transit ridership and the pedestrian activity needed to support downtown businesses, add street life and improve safety. The Downtown Transit Core allows up to 100 dwelling units per acre; a minimum of 80 dwelling units per acre is required. A maximum of 120 dwelling units per acre would be allowed for development meeting specified criteria. Ground level retail uses are encouraged throughout the area, but are not required in this designation. The General Plan Downtown Sub -Area also includes the following guiding policies in relation to the Downtown: Guiding Policy 3.1 -G -1. Promote Downtown's vitality and economic well- being, and its presence as the city's center. Guiding Policy 3.1. -G -2. Encourage development of Downtown as a pedestrian - friendly mixed -use activity center with retail and visitor - oriented uses, business and personal services, government and professional offices, civic uses, and a variety of residential types and densities. Guiding Policy 3.1 -G -3. Promote infill development, intensification, and reuse of currently underutilized sites. Guiding Policy 3.1. -G -5. Use the South San Francisco Downtown Station Area Specific Plan as a guide for General Plan policies for the Downtown Station Area. 346 Staff Report Subject: 488 Linden Avenue — High Density Residential Development Date: May 21, 2015 Page 5 of 10 In conjunction with the final General Plan Guiding Policy listed above, the DSASP includes the following principles that apply to the proposed project: Guiding Principle 1. Revitalize Downtown South San Francisco as a citywide destination that is economically vital, diverse, active, and that encompasses a variety of uses. Guiding Principle 2. Increase development intensities in the Downtown to grow the resident population and thus support a variety of commercial and service uses. Guiding Principle 8. Focus increases in residential and mixed -use densities within 1/4 mile of the Caltrain Station and in areas proximate to Grand Avenue to increase patronage of Caltrain as well as Grand Avenue businesses. Upon construction, the proposed project will entail a high - density residential development that fulfills all of the purpose statements of the DTC District: the project will redevelop a currently underutilized site with high density housing in close proximity to the Downtown and Caltrain Station, helping increase patronage of transit and Grand Avenue businesses and creating a more pedestrian friendly environment. General Development Standards The DTC District also includes a variety of general development standards and supplemental regulations that would be applicable to the proposed project. Subject to approval of the exceptions proposed below, the project would comply with all of the applicable standards; see Attachment 2 — "Zoning Ordinance Compliance" for a complete list. Requested Zoning Ordinance Exception SSFMC Section 20.280.006 "Supplemental Regulations — Downtown" allows the Chief Planner and /or Planning Commission to grant exceptions to specific standards to accommodate site and project specific conditions. Following are the specific exceptions being requested by the applicant: 1. 20.280.006.B — Building Transparency and Required Openings. Exterior walls facing and within 20 feet of a front or street side property line shall include windows, doors, or other openings for at least 60 percent of the building wall area located between two and one -half and seven feet above the level of the sidewalk. No wall may run in a continuous plane for more than 20 feet without an opening. Openings fulfilling this requirement shall have transparent glazing and provide views into work areas, sales areas, lobbies, or similar active spaces, or into window displays that are at least 18 inches deep. They shall not provide views into parking or vehicle circulation areas. 1. Exceptions. The building transparency requirement for a project may be reduced by the Chief Planner to address operational characteristics with which providing the required openings is incompatible, such as in the case of a cinema or theater. Walls of street facing buildings will exhibit architectural relief and detail, and /or will be screened with attractive landscaping, in such a way as to create visual interest at the pedestrian level. The elevations facing Tamarack Lane and Lux Avenue would not meet the 60 percent requirement for transparency or openings. The building is residential only, and therefore the use does include operational characteristics with which providing the required openings is incompatible. The Linden Ave frontage is the primary interface, and is designed to meet the transparency requirements, as does the entrance lobby along the western edge of the Lux Ave frontage. Both the Lux Ave and Tamarack Lane ground level elevations include adequate architectural relief and detail to create visual interest at the pedestrian level. Based on this, staff supports the requested exception. 347 Staff Report Subject: 488 Linden Avenue — High Density Residential Development Date: May 21, 2015 Page 6 of 10 Parking Reduction The parking standards for Downtown districts are included in SSFMC Table 20.330.007 "Required Parking Spaces, Downtown Districts ". For residential units within the Downtown, the table includes a range of minimum and maximum parking ratios based on the number of bedrooms and total square footage of each unit. For example, a studio unit less than 500 square feet in area has a maximum parking ratio of one space per unit, while a unit with 3+ bedrooms or more than 1,101 square feet of area has a minimum requirement of 1.5 parking spaces and a maximum of 2 parking spaces per unit. Based on the stated ratios above, the total parking required for the proposed project would be a minimum of 52 spaces. The applicant is proposing to provide a total of 47 spaces within the mechanical parking lifts. The applicant is requesting that the required number of parking spaces be based on the number of bedrooms per unit, and not the total area of each unit. Therefore, each one - bedroom unit would be provided with one parking space, and every unit with two or more bedrooms would be calculated to require 1.5 parking spaces, in keeping with the Zoning Ordinance requirements. Based on this calculation, the parking calculation would be a minimum of 47 spaces, in keeping with the proposed project. Per SSFMC Section 20.330.007.0 "Parking Reductions ", the Planning Commission shall review any request for a reduction in the number of required parking spaces for a use within the Downtown Parking District, and make a determination whether there is sufficient parking within the District to accommodate the proposed use. A "Parking Demand Analysis for Proposed Projects at 255 Cypress and 488 Linden" Memorandum analyzing parking demand for the subject site was prepared by Nelson\ Nygaard and is attached to this staff report (Attachment 3). The memo analyzes the City's current parking requirements for residential units, finding that the parking requirement for a 1- bedroom unit is dependent on the size of the unit (minimum of 1 parking space for a unit between 500 — 800 square feet and minimum of 1.5 parking spaces for a unit between 801 — 1,100 square feet). The memo also analyzes parking demand data, including both national and local data sources, finding that there is no empirical research that shows a direct relationship between an increase in unit size and an increase in parking demand. The project would meet the minimum parking standards if one - bedroom units were treated equally regardless of their square footage. The development is within 1/4 mile of the future relocated Caltrain station and other transit options, giving residential tenants alternatives to using only single - occupancy vehicles for commute purposes. Therefore, the number of parking spaces proposed is sufficient for the proposed development, and there will continue to be sufficient parking within the Downtown Parking District to accommodate the proposed use. Based on this, staff supports the proposed Parking Reduction. Community Benefits SSFMC Section 20.280.005.A "Increased Density and FAR Incentive Program" allows an increase to the maximum density permitted for a building with the approval of a Conditional Use Permit if the public benefits that are included as part of a development project demonstrate a positive contribution that is above and beyond the minimum required impact fees and other requirements of the particular project. The maximum density allowed by -right in the DTC district is 100 units per acre, while the maximum density inclusive of the incentive program is 120 units per acre. For the project site, this equates to 32 units and 38 units, respectively. To allow the increased density of 6 units, the proposed public benefit is the provision of eight affordable units (20 percent of the total units). The applicant has provided a "488 Linden and 255 Cypress Incentives and Public Benefits" memorandum (Attachment 4) that indicates that the value of the proposed public benefit exceeds the value of the additional density. The proposed publicenefit will also serve to further the City's objectives, Staff Report Subject: 488 Linden Avenue — High Density Residential Development Date: May 21, 2015 Page 7 of 10 including DSASP Land Use Strategy LU -9, which encourages "the provision of affordable housing in the Specific Plan area, by working with non - profit housing developers and through inclusionary on in -lieu fee provisions." City staff has reviewed and concurs with the analysis, and therefore supports the proposed Use Permit to allow increased density for the project because the proposed public benefit and requested development incentive are suitable to the site and to adjacent uses and structures, the proposed public benefits are consistent with the accepted list of public benefits, and reflect a fair balance of costs and benefits to the applicant and the City. GENERAL PLAN CONSISTENCY As discussed above in the Zoning Consistency section, the General Plan Land Use Designation for the site is Downtown Transit Core, considered the area most suitable for the highest intensities of new development in the Downtown Area, which will help to support transit ridership and the pedestrian activity needed to support downtown businesses, add street life and improve safety. The proposed project will conform to the General Plan Land Use Policies by reusing an underutilized site to construct a high - density residential development that will assist in the creation of a pedestrian - friendly mixed -use activity center along Linden Avenue and the downtown area. The project also provides a well - articulated and visually engaging development that implements the goals of the Downtown Station Area Specific Plan. The project design is consistent with the City's Design Guidelines as it relates to building design, form and articulation. Housing Element Opportunity Sites The Housing Element is one of the seven State - mandated Elements of the General Plan. Unlike other elements, the Housing Element must be updated by deadlines set by the State; the Housing Element for the housing cycle of 2015 -2022 was certified by the State in April 2015. The Housing Element is the blueprint for future housing development in the city and includes goals, policies, and programs that direct residential decision - making. The Housing Element is required by state law to identify how and where the housing needs of each community will be met. For the upcoming housing cycle, the City of South San Francisco has a Regional Housing Needs Allocation ( "RHNA ") of 1,864 units. To show that the City has properly zoned land to meet the RHNA numbers, the City is required to identify adequate opportunity sites throughout the jurisdiction. The available site inventory focuses on sites with near - term development potential, typically where the site is currently vacant or highly underutilized. In the recently certified Housing Element, the Downtown area was identified as providing many potential opportunity sites, including the subject site, which was included as "Site 8 ". Assuming a density of 80 dwelling units per acre, less than then maximum density allowed within the Downtown Transit Core district, the site was identified as being able to accommodate at least 24 units. The proposed project would exceed this projection by building at a higher density, and therefore would comply with the General Plan Housing Element. DESIGN REVIEW BOARD The Design Review Board reviewed the project at their meeting of April 21, 2015. The Board was supportive of the overall project, with the following general comments: 1. Revise the project elevations to include different hues of the primary color on the bays and /or corner towers to assist in breaking up the massing of the building. 2. Revise the project elevations so that the windows, doors and balconies have consistent detailing on all elevations. 349 Staff Report Subject: 488 Linden Avenue — High Density Residential Development Date: May 21, 2015 Page 8 of 10 3. Consider switching the location of the trash enclosure area and the utility room in order to provide an inside entrance door for residents to access trash enclosure area. 4. Consider widening the entrance gate from Lux Ave to allow easier access to the loading zone. 5. Revise the landscape plan to provide upright and narrow street trees that will grow up to the 2nd & 3rd floor of the building and have high branching. The Project Plans attached to this staff report (Exhibit B of the Entitlements Resolution) have been modified in response to comments made by the Design Review Board. The elevations have been revised to include different hues of the primary color and to have a consistent window design throughout. The trash enclosure area and one of the utility rooms have been switched so that there is an interior entrance door from the stairway into the trash room. The entrance gate off of Lux Ave has been widened approximately 3 feet to allow easier access. Finally, the landscape plan includes street trees in keeping with the Design Review Board's direction. Staff is of the opinion that the applicant has adequately addressed all of the specific comments. NEIGHBORHOOD MEETING A neighborhood meeting was held on April 20, 2015 in which approximately 10 residents attended. Concerns raised at the meeting included the following: • Too little parking is being provided by the development. • Proposed building is too tall for the neighborhood. • Vehicular traffic exiting the site onto Tamarack Lane will negatively impact the existing commercial businesses on the other side of the lane. Proposed Parking Subject to approval of the Parking Reduction request to allow all 1- bedroom units to have the same parking requirement regardless of unit size, the project would provide parking in conformance with the Zoning Ordinance standards. The project is in keeping with General Plan Principles to increase residential densities within 1/4 mile of the Caltrain Station and in areas proximate to Grand Avenue to increase patronage of Caltrain as well as Grand Avenue businesses. Building Height The building is the same height as the previously entitled project on this site, and is less than the maximum allowed height of 85 feet in the Downtown Transit Core zoning district. Exiting onto Tamarack The proposed vehicular egress has been designed to provide adequate turning radius for vehicles exiting onto Tamarack Lane, and therefore no negative impacts to traffic or the existing commercial businesses is anticipated. SUSTAINABILITY / CLIMATE ACTION PLAN The proposed project is consistent with recent sustainability regulations that have been adopted at both the State, regional and local levels. Examples include Senate Bill 375, passed in 2008, which aims to lead to more efficient communities that provide residents with alternatives to using single occupancy vehicles. Projects that link higher density development to transit are in keeping with this goal. At the local level, the DSASP area 350 Staff Report Subject: 488 Linden Avenue — High Density Residential Development Date: May 21, 2015 Page 9 of 10 aims to link the downtown with the Caltrain Station and other regional transit, including SamTrans. The applicant is proposing a high - density residential project that will be located within 1/4 mile of the Caltrain station and within walking distance of regional and local bus routes, consistent with all of the above mentioned sustainability goals. The applicant has indicated that the preliminary sustainability goal is LEED Certification. Accordingly, the building incorporates a variety of green building features such as passive ventilation and cooling, large windows to provide natural daylight, robust insulation, high performance glazing, and a selection of sustainably- produce materials. The City adopted a Climate Action Plan ( "CAP ") in February 2014; the CAP serves as South San Francisco's greenhouse gas reduction strategy. The CAP includes requirements applicable to new development projects; following are the specific requirements applicable to the proposed project. • Require all new development to install conduit to accommodate wiring for solar. • Encourage the use of high- albedo surfaces and technologies as appropriate, as identified in the voluntary CALGreen standards. • Revitalize implementation and enforcement of the Water Efficient Landscape Ordinance. In addition to the requirements listed above, the CAP includes additional measures that are encouraged in order to help with the City's greenhouse gas reduction efforts: • Integrate higher- density development and mixed -use development near transit facilities and community facilities, and reduce dependence on autos through smart parking practices. • Work with developers of multi - family properties and nonprofit groups to maximize energy efficiency in new construction. • Encourage the use of CALGreen energy efficiency measures as a preferred mitigation for CAP streamlining. • Promote on -site renewable energy or distributed generation energy systems in new and existing residential and nonresidential projects. Encourage developers of multi - family and mixed -use projects to provide options for on -site renewable electricity or install distributed generation energy systems, similar to the statewide Homebuyer Solar program. As currently designed, the proposed project will comply with many of the standards above, and staff will continue to work with the applicant to incorporate as many sustainable features as possible into the project. Staff has included Condition of Approval A -13, which requires the applicant to revise the project drawings to include the CAP requirements stated above subject to Chief Planner review and approval prior to the issuance of a building permit. Subject to the conditions of approval, the project is consistent with the City's CAP. ENVIRONMENTAL REVIEW The City adopted the DSASP on February 11, 2015. The DSASP EIR was prepared as a Program EIR, pursuant to Section 15168 of the California Environmental Quality Act ( "CEQA "), and this document was certified by the City Council following public review and comment. The DSASP EIR found that significant and unavoidable impacts would result from future development anticipated in the DSASP in regards to Air Quality, Cultural Resources, Noise and Traffic /Transportation. 351 Staff Report Subject: 488 Linden Avenue — High Density Residential Development Date: May 21, 2015 Page 10 of 10 In addition, the DSASP EIR included a Mitigation Monitoring and Reporting Program ( "MMRP ") that identified mitigation measures required of development projects within the DSASP Area to show that the project components are within the environmental parameters analyzed in the DSASP EIR. These include the following additional studies: Air Quality • MM4.2 -3 — A Health Risk Assessment (HRA) shall be prepared by a qualified air quality professional for development of a project that would introduce new sensitive receptors in the study area within the allowable siting distance. If a potentially significant health risk is identified, the HRA shall identify appropriate measures to reduce the potential health risk to below significant levels. A "488 Linden Avenue Air Quality Analysis and Health Risk Assessment" Memorandum analyzing conformance with this mitigation measure was prepared by RCH Group and is attached to this staff report (Attachment 5). The analysis determines that the proposed Project would not result in any new impacts related to Air Quality, and therefore the Project is within the parameters analyzed within the DSASP EIR. A copy of the Final MMRP is also attached to this staff report (Attachment 6); staff will work with the applicant during project construction to ensure that all required mitigation measures are incorporated. CONCLUSION The proposed project seeks to transform a largely vacant, underutilized site into a 38 -unit high- density residential development that will assist in the creation of a pedestrian - friendly mixed -use activity center along Linden Avenue and the downtown area, in keeping with the vision of the General Plan, including the Housing Element, and the Downtown Station Area Specific Plan District standards and guidelines. Therefore, staff recommends that the Planning Commission adopt a Resolution approving the Use Permit, Design Review and Parking Reduction based on the attached draft findings and subject to the attached draft conditions of approval. , �1 o Billy ross, Senior Planner Attachments: 1. Planning Commission Entitlement Resolution with Exhibits a. Conditions of Approval b. 488 Linden Avenue Project Plans, dated May 21, 2015 2. 488 Linden — Zoning Ordinance Compliance 3. Parking Demand Analysis for Proposed Projects at 255 Cypress and 488 Linden, dated 4. 488 Linden and 255 Cypress Incentives and Public Benefits Memorandum, dated 5. 488 Linden Avenue Air Quality Analysis and Health Risk Assessment, dated 6. Final Mitigation Monitoring and Reporting Program from DSASP EIR, dated 7. Design Review Board Minutes — April 21, 2015 352 488 LINDEN AVENUE — ZONING ORDINANCE COMPLIANCE Zoning District— Downtown Transit Core (DTC) DTC Base Dev Standards Minimum Lot Size Minimum Lot Width Floor Area Ratio Min FAR Max FAR Residential Density (units /acre) Min Density Max Density Height Max Bldg Height Min Ground Floor Height Yards Ped Zone Street Frontage Interior Side Rear Maximum Lot Coverage Min Usable Open Space Min Amount of Landscaping Additional Development Standards Increased Density, FAR Heights and Building Setbacks Ground Floor Height Finished Floor Height Build -to Line Corner Build Area Residential Usable Open Space Private Storage Space Limitations on Curb Cuts Truck Docks, Loading, and Service Required Bicycle Parking Supplemental Regulations Required Active Frontage Ped Priority Zone Bldg Transparency Arch Articulation Variety in Wall Plane Variety in Height or Roof Fagade Design Balconies Allowed Proposed S,OOOsf 14,OOOsf 50' 100' 2.0 6.0 (8.0 w/ incentives) 3.24 80 100 (120 w/ incentives) 120 85' 60' 15'; 12' min clearance 15' -2" Property line or 10' from curb 0; 10' adjacent to residential 0; 10' adjacent to residential 100 100sf per unit n/a Property Line 0 20' 79 112sf per unit n/a Allowed Proposed Public Benefits Complies 15' (12' clearance floor /ceiling) Complies 1St Floor Res, 5' above grade Complies 65% of street frontage Complies Complies Complies 200 cubic feet /unit Complies Min 10' from intersection Complies Complies Complies Allowed Proposed Encouraged, not required 60% of frontage 353 n/a < 60% (exception requested) Complies Complies Complies Complies Blank Walls Exterior Building Materials /Colors Building Orientation /Entrancies Unbundled Parking Limitation on Parking Locations Max Block Length Site and Development Regulations Landscaping (20.300.007) Lighting and Illumination (20.300.008) Screening (20.300.012) Trash and Refuse Collection (20.300.014) No more than 20' Complies Complies Oriented to face street Complies 50% of req'd parking Complies Complies Complies Allowed Proposed Parking Standards (20.330) Allowed Proposed Location of Required Parking Parking Reductions Bicycle Parking (20.330.008) On -Site Loading (20.330.009) Parking Area Design and Dev Standards (20.330.010) Residential Parking Requirements Proposed Parking Provided # of Units Downtown Parking Req't Parking Provided Studio 4 Standards 4 Studio or 18 1 per unit max 18-27 Less than 500 sf 11 1.5 — 1.8 per unit 17-20 1 -Bdrm or 10 1— 1.5 per unit 10-15 500 -800 sf 38 47-61 47 2 -Bdrm or 16 1.5 — 1.8 per unit 24-29 801 -1,100 sf 3 -Bdrm or more, 12 1.5 — 2 per unit 18-24 1,101 sf or larger Total 1 38 1 1 52-68 Proposed Parking Provided 354 # of Units Downtown Standards Parking Req't Parking Provided Studio 4 1 per unit max 4 1 -Bdrm 18 1— 1.5 per unit 18-27 2 -Bdrm 11 1.5 — 1.8 per unit 17-20 3 -Bdrm 5 1.5 — 2 per unit 8-10 Total 38 47-61 47 354 Attachment 5.b 418 Linden — Planning Commission Minutes (May 21, 2015) 355 MINUTES May 21, 2015 CITY OF SOUTH SAN FRANCISCO REGULAR PLANNING COMMISSION CALL TO ORDER / PLEDGE OF ALLEGIANCE ROLL CALL / CHAIR COMMENTS PRESENT: Chairperson Wong, Vice Chairperson Khalfin, Commissioner Faria, Commissioner Martin, Commissioner Nagales and Commissioner Ruiz ABSENT: Commissioner Lujan Director of ECD Greenwood, Senior Planner Gross, Associate Planner Thompson, Assistant STAFF PRESENT: City Attorney D'Andrea, Administrative Assistant Cabano, Fire Marshal DaSilva, and Sergeant Plank AGENDA REVIEW ORAL COMMUNICATIONS CONSENT CALENDAR 1. Approval of the regular meeting minutes of April 16, 2015. Motion - -Vice Chairperson Khalfin /Second -- Commissioner Ruiz to approve the Consent Calendar. Approved by unanimous voice vote with Commissioner Lujan absent (6 -1). PUBLIC HEARING 2. 488 Linden Multi - Family Residential City of South San Francisco /Owner Brookwood Equities /Applicant 488 Linden Ave. P15 -0016: UP15 -0002, DR15 -0015 & PE15 -0002 Use Permit, Design Review and Parking Reduction to construct a new 5 -story residential building with 38 units with mechanical parking stackers at 488 Linden Avenue in the Downtown Transit Core (DTC) Zoning District in accordance with SSFMC Chapters 20.280, 20.330, 20.480 & 20.490. Chairperson Wong opened the public hearing and called for the staff report. Senior Planner Gross presented the staff report, explaining the different proposed uses and approvals on the site. Similar entitlements were approved in 2012, but due to financial constraints that project was not constructed. In 2014, the City Council authorized an Exclusive Negotiating Rights Agreement with Brookwood Equities for the potential development of this property and 255 Cypress property. Staff worked with the Brookwood team to develop the revised plans in keeping with the previously approved design. He further explained the mechanical parking system for the project and the parking reduction request. Shep Heery, Brookwood Equities, commended City staff for the collaborative process. He introduced his project team and gave a brief overview about the Brookwood Group and its previous projects. Bob Baum, architect, gave a brief presentation explaining the design approach of the architecture. May 21, 2015 Minutes 356 Page 1 of 6 Joseph Oates, South San Francisco resident, spoke in favor of the project and the mechanical parking but inquired whether the facility would have electric charging stations. Laura Carapella, South San Francisco resident, spoke in favor of the project but expressed concern with parking issues, including not providing enough parking, guest parking and size of vehicles. Alicia Gonzalez, South San Francisco resident, expressed concern with the removal of existing public parking lots and not providing enough parking for the project and surrounding businesses. She further added she hopes with the serious drought that the structure will be green and not put stress on our natural resources. Lillian Piciannini, owner of 2 commercial buildings on Miller Avenue to Tamarack Lane, expressed concern with the project traffic exiting on Tamarack Lane, as it may hinder deliveries to the commercial businesses. She requested that the exiting be re- configured. Elmer Michelletti, property owner on Lux Avenue, expressed concern with parking for the surrounding businesses and residents. Vicente Guerrero, Lux Avenue resident, expressed concern with the building height being too tall for the neighborhood and the parking. Pedro Gonzalez, 804 Olive Avenue, spoke in favor of the project but stated he concurs with the concerns regarding the parking. He further stated that the parking concerns of the neighborhood should be addressed before building more housing. Edwin Law, 211 Airport Avenue developer, stated that the proposed parking was sufficient, in keeping with a 54- unit multi - family residential project he had recently developed in Millbrae. He further added that the purpose of the Specific Plan and this project is to be near transit and to help address the housing shortage in the Bay Area. He expressed his support of the project. Louise Childers, Village Way resident, asked if traffic will be re- routed different ways and if more stop lights will be put in with the addition of these projects. There being no more speakers the public hearing was closed. Commission's comments /questions: Commission asked what has been done to soften the impact of the structure with the surrounding properties. Bob Baum, architect, stated the building is sets back 20 feet from the interior lot on the east side closest to the single family homes, and that the roof terrace on the rear makes it appear 1 -story less; the design accent line at the top of the 4th story and pitched roof all help to soften the height. He further mentioned that the building is considerably below the allowable height limit and was approved at the same height as part of the previous entitlements. Commission expressed concerned with the sidewalk looking tight and asked what is happening on the first floor. Mr. Heery responded there is one residential unit on the ground floor which is entered directly from the street and the remainder of the ground floor consists of the lobby and lounge space for the rest of the residential project. He stated that Brookwood would be open to this area becoming a commercial space in the future. Mr. Heery stated that the edge of the building does go to the property line on 3 sides. Senior Planner Gross informed the Commission that in accordance with the Ordinance there would be a 10 foot wide sidewalk per code. Commission inquired whether the landscaping shown is all to be expected or if more could be incorporated to soften the frontage of the building. Mr. Heery stated they see it as a larger streetscape plan per City's goal. Senior Planner Gross further stated the City is developing detail streetscape guidelines for Grand and Linden Avenues, which would include street trees, additional landscaping and other pedestrian amenities in keeping with the City's adopted guidelines. Commission inquired about visitor parking options. Senior Planner Gross stated that sites within the Downtown parking district do not have a guest parking requirement because the projects are in close proximity to the parking garage and other public parking. May 21, 2015 Minutes 357 Page 2 of 6 • Commission questioned why mechanical parking stackers were chosen. Mr. Heery responded that users in other residential projects with this system were strong advocates, which makes the system advantageous from a marketing perspective. There is also a cost advantage as they don't have to excavate for a subterranean garage. Mr. Heery further added that they intend to have a minimum of 1 electric charging station and will expand as demand requires. Mr. Baum answered the question regarding the size of the vehicles stating the garage will accommodate all but the largest SUVs, but typically the tenants are not driving the large vehicles. He further added that multi - family housing uses less water per person than a single - family home as well as incorporating green energy. In response to the flow of cars onto Tamarack Lane, he informed the Commission that the machine regulates the pace of cars coming out. Studies have found it better for traffic to exit rather than enter on Tamarack Lane. • Commission asked about the parking for businesses around the area. Senior Planner Gross responded that possibly a residential parking permit program, which isn't in place currently, may be an option. • Commission asked what the options are if there are problems getting into the parking spaces. Mr. Heery stated there won't be a parking attendant but there will be on -site managers. Mr. Heery informed the Commission he would be willing to organize a tour to allow the Planning Commissioners to see an existing project with the parking stackers in person. As far as green energy it will be LEED certified. Senior Planner Gross further advised that the Downtown Station Area Specific Plan EIR looked at traffic impacts with this type of development and identified mitigation measures related to traffic movement. • Commission asked how many parking spaces a tenant would have access to and whether they could get access to additional spaces. Mr. Baum stated each tenant is assigned only one space. He further informed the Commission that they studied this system very carefully and it is remarkably trouble -free. • Commission expressed concerns regarding ground floor uses and asked if the fitness center would be open to public membership. Mr. Baum stated it would be only for the tenants. • Commission added that the City is trying to invigorate the Downtown and having businesses on the ground floor would provide more jobs for the community. Mr. Heery informed the Commission they are leaving this option open to have commercial /retail uses in the future but not at this time. • Commission inquired about the type of security proposed for the lounge area and if only one elevator was adequate for a 5 -story building. Mr. Heery stated the lounge would likely be secured with a keycard. Alan Katz, Brookwood Equities, informed the Commission that the elevator being installed is a high quality, new concept with a much better service record and strong service program. He also added that he is an Urban Designer and mindful of retail on the ground floor but expressed concern of having empty commercial /retail sites. • Commission inquired whether the 2 doors to Tamarack Lane could be switched to roll -up doors for safety. Mr. Heery stated if PG &E will allow they would be happy to accommodate. • Commission inquired on how far the Miller parking garage is from the project. Senior Planner Gross responded it is less than 2 blocks. • Commission suggested as an option looking into monthly parking at the garage for residents. Commission expressed concern with only one electric charging station and suggested doing more research with other similar projects. • Commission suggested the City be proactive to provide signage to direct vehicular traffic to parking garages. • Commission acknowledged that this is step in the right direction to revitalize by creating the foot traffic in the Downtown area. • Commission suggested continuing the project to come back with focus on parking or possibly have this go to City Council. ECD Director Greenwood added perspective explaining that lack of parking in downtown is not specific to this project. He further added that given the proximity to transit staff feels there is enough parking for this type of project. The parking system is new to South San Francisco but staff has researched it thoroughly and is comfortable with the system. Motion -- Commissioner Martin /Second -- Commissioner Nagales to adopt a Resolution making findings and approving P15- 0016:Up15 -002, DR15 -0015 and PE15 -0002 based on the attached draft Findings and subject to attached draft Conditions of Approval. Approved by roll call vote 6 -0. 3. 255 Cypress Mixed -Use Development City of South San Francisco /Owner Brookwood Equities /Applicant May 21, 2015 Minutes 358 Page 3 of 6 Attachment 5.c 418 Linden — Planning Commission Resolution 2765 -2015 - Entitlements 359 RESOLUTION NO. 2765 -2015 PLANNING COMMISSION, CITY OF SOUTH SAN FRANCISCO STATE OF CALIFORNIA A RESOLUTION RECOMMENDING APPROVAL OF A USE PERMIT, DESIGN REVIEW AND PARKING REDUCTION, FOR A RESIDENTIAL DEVELOPMENT AT 488 LINDEN AVENUE IN THE DOWNTOWN TRANSIT CORE ZONING DISTRICT. WHEREAS, the South San Francisco Successor Agency ( "Owner ") and Brookwood Group ( "Applicant ") have proposed construction of a five -story mixed -use residential and commercial development, consisting of 38 residential apartments above ground -floor support space and 47 ground level parking spaces ( "Project ") on an approximately 14,000 square foot site, which is currently a temporary public parking lot, located at 488 Linden Avenue, between Lux Avenue and Tamarack Lane ( "Project Site ") in the City of South San Francisco ( "City "); and, WHEREAS, Applicant seeks approval of a Use Permit, Design Review and Parking Reduction for the Project; and, WHEREAS, approval of the Applicant's proposal is considered a "project" for purposes of the California Environmental Quality Act, Pub. Resources Code § 21000, et seq. ( "CEQA "); and, WHEREAS, the City Council certified an Environmental Impact Report ( "EIR') on January 28, 2015 (State Clearinghouse number 2013102001) in accordance with the provisions of the California Environmental Quality Act (Public Resources Code, §§ 21000, et seq., "CEQA ") and CEQA Guidelines, which analyzed the potential environmental impacts of the Downtown Station Area Specific Plan; and, WHEREAS, the Project would not result in any new significant environmental effects or a substantial increase in the severity of any previously identified effects beyond those disclosed and analyzed in the Downtown Station Area Specific Plan EIR certified by City Council, WHEREAS, on May 21, 2015 the Planning Commission for the City of South San Francisco held a lawfully noticed public hearing to solicit public comment and consider the proposed entitlements and take public testimony. NOW, THEREFORE, BE IT RESOLVED that based on the entirety of the record before it, which includes without limitation, the California Environmental Quality Act, Public Resources Code §21000, et seq. ( "CEQA ") and the CEQA Guidelines, 14 California Code of Regulations § 15000, et seq.; the South San Francisco General Plan and General Plan EIR; the Downtown Station Area Specific Plan and the Downtown Station Area Specific Plan EIR; the South San Francisco Municipal Code; the Project applications; the 488 Linden Avenue Project Plans, as prepared by Gould Evans Architects, dated May 21, 2015; the 488 Linden Avenue Air Quality Analysis and Health Risk Assessment, as prepared by RCH Group, dated May 5, 2015, including all appendices thereto; all site plans, and all reports, minutes, and public testimony submitted as part of the Planning Commission's duly noticed May 21, 2015 meeting; and any other evidence (within the meaning of Public Resources 360 Code §21080(e) and §21082.2), the Planning Commission of the City of South San Francisco hereby finds as follows: A. General Findings The foregoing recitals are true and correct. 2. The Exhibits attached to this Resolution, including the Conditions of Project Approval (Exhibit A) and the 488 Linden Avenue Project Plans (Exhibit B) are each incorporated by reference and made a part of this Resolution, as if set forth fully herein. The documents and other material constituting the record for these proceedings are located at the Planning Division for the City of South San Francisco, 315 Maple Avenue, South San Francisco, CA 94080, and in the custody of the Director of Economic and Community Development, Alex Greenwood. 4. Based upon the testimony and information presented at the hearing and upon review and consideration of the environmental documentation provided, the Planning Commission, exercising its independent judgment and analysis, finds that the Project falls within the environmental parameters analyzed in the Downtown Station Area Specific Plan EIR, and that the Project would not result in any new significant environmental effects or a substantial increase in the severity of any previously identified effects beyond those disclosed and analyzed in the EIR certified by City Council, because in keeping with the DSASP EIR Mitigation Monitoring and Reporting Program, the project prepared an Air Quality and Health Risk Assessment that determined that the Project would not result in any new impacts related to Air Quality. B. Use Permit 1. The proposed Project is consistent with the standards and requirements of the City's Zoning Ordinance and with the provisions of the Downtown Transit Core Zone District. The Project meets or exceeds all of the general development standards of the Grand Avenue Core District, with the exception of the increased density. However, the increased density is permissible and warranted by the City's Zoning Ordinance subject to the provision of sufficient public benefits included as part of the development project and based on the findings contained in B.B. 2. The proposed Project is consistent with the General Plan by reusing an underutilized site to construct a high - density residential development that will assist in the creation of a pedestrian - friendly mixed -use activity center along Linden Avenue and the downtown area, provides a well - articulated and visually engaging development that implements the goals of the Downtown Station Area Specific Plan, is consistent with the City's Design Guidelines as they relate to building design, form and articulation. The proposed use will not be adverse to the public health, safety, or general welfare of the community, nor detrimental to surrounding properties or improvements, because the proposed use 361 is consistent with the existing uses in the vicinity of the site, including the commercial and residential. The Project proposes a high - density residential use on a site located in the City's Downtown Station Area Specific Plan district, which is intended for this type of use. The General Plan has analyzed this type of use in the Linden Avenue corridor, and concluded that such high - density residential uses are not adverse to the public health, safety, or welfare. As the proposed Project is consistent with high - density residential uses anticipated in the area, approval of the Project will not be detrimental to the nearby properties. 4. The proposed Project complies with applicable standards and requirements of the City's Zoning Ordinance, with the exception of the increased density. The stated exceptions are permissible and warranted by the City's Zoning Ordinance subject to the provision of sufficient public benefits included as part of the development project. The proposed Project is located in the Downtown Transit Core District and, subject to the increased density discussed above, meets the minimum standards and requirements for that district. 5. The design, location, size, and operating characteristics of the proposed Project are compatible with the existing and reasonably foreseeable future land uses in the vicinity because the Project proposes high - density residential uses in the Downtown Transit Core district, which is specifically intended for such uses. 6. The site is physically suitable for the type of development and density proposed, as the high - density residential uses will benefit from being located in close proximity to the South San Francisco Caltrain Station, Linden Avenue, Grand Avenue and the overall Downtown Station Area Specific Plan Area, and the size and development is appropriate for the location and meets the City's land use and zoning standards. 7. The Project is consistent with CEQA for the reasons stated in Finding A.4 above. 8. The proposal would result in a Project whose proposed public benefits and requested development incentives are suitable to the site and relate appropriately to adjacent uses and structures. The provision of 20 percent affordable units is in keeping with Downtown Station Area Specific Plan Land Use Strategy LU -9, which encourages the provision of affordable housing in the Specific Plan area. The provision of additional residential units through the increased density will provide more residents within the Linden Avenue corridor and the downtown to create a mixed -use activity center. 9. The proposed Project would be consistent with the accepted list of public benefits outlined in Section 20.280.004(A). The provision of affordable housing units is in keeping with preference i, "Other developer proposed incentives achieving a similar public benefit ", by providing a housing benefit that furthers Downtown Station Area Specific Plan Land Use Strategy LU -9, which encourages the provision of affordable housing in the Specific Plan area. 362 10. The proposal reflects a fair financial balance of costs and benefits to the applicant and the City. C. Design Review 1. The Project, including Design Review, is consistent with Title 20 of the South San Francisco Municipal Code because the Project has been designed as a high - density residential project which will provide a pedestrian - friendly, transit - oriented environment with sustainability elements incorporated. 2. The Project, including Design Review, is consistent with the General Plan because the proposed high - density residential development is consistent with the policies and design direction provided in the South San Francisco General Plan for the Downtown Transit Core land use designation by reusing an underutilized site to construct a high - density residential development that will assist in the creation of a pedestrian - friendly mixed -use activity center along Linden Avenue and the downtown area. 3. The Project, including Design Review, is consistent with the applicable design guidelines adopted by the City Council in that the proposed Project is consistent with the Downtown Station Area Specific Plan Design Guidelines. 4. The Project is consistent with the Use Permit for the reasons stated in Section B, above. The Project is consistent with the applicable design review criteria in South San Francisco Municipal Code Section 20.480.006 ( "Design Review Criteria ") because the project has been evaluated by the Design Review Board on April 21, 2015, and found to be consistent with each of the eight design review criteria included in the "Design Review Criteria" section of the Ordinance, and the Design Review Board. D. Parking Reduction There is adequate parking supply within the Downtown Parking District to accommodate the on -site parking needs of the proposed Project because the project will provide sufficient parking based on the bedroom count of each unit and because of the proximity of the site to the future relocated Caltrain station and SamTrans bus routes. NOW, THEREFORE, BE IT FURTHER RESOLVED that subject to the Conditions of Approval, attached as Exhibit A to this resolution, and conditioned upon the approval of the Disposition and Development Agreement on terms acceptable to the Successor Agency, the Oversight Board and Department of Finance, the Planning Commission of the City of South San Francisco hereby makes the findings contained in this Resolution, and approves the Use Permit, Design Review and Parking Reduction for the Project. 363 BE IT FURTHER RESOLVED that this Resolution shall become effective immediately upon its passage and adoption. I hereby certify that the foregoing resolution was adopted by the Planning Commission of the City of South San Francisco at the regular meeting held on the 21st day of May, 2015 by the following vote: AYES: Chairperson Wong, Vice Chairperson Khalfin, Commissioner Faria, Commissioner Martin Commissioner Nagales and Commissioner Ruiz NOES: ABSTENTIONS: ABSENT: Commissioner Lujan Attest: /s /Alex Greenwood Alex Greenwood Secretary to the Planning Commission 364 Attachment 6 Design Review Board Minutes — April 21, 2015 365 MINUTES SOUTH SAN FRANCISCO DESIGN REVIEW BOARD Meeting of April 21, 2015 TIME: 4:00 P.M. MEMBERS PRESENT: Nilmeyer, Nelson, Vieira and Williams MEMBERS ABSENT: Harris STAFF PRESENT: Billy Gross, Senior Planner Tony Rozzi, Senior Planner Sailesh Mehra, Senior Planner Patricia Cotla, Planning Technician • Administrative Business: - None OWNER City of South San Francisco APPLICANT Brookwood Equities ADDRESS 488 Linden Avenue PROJECT NUMBER P15 -0016: UP15 -0012 & DR15 -0015 PROJECT NAME Multi Residential Units (Case Planner: Billy Gross) DESCRIPTION Use Permit and Design Review to construct a new 5 -story residential building with 38 units with mechanical parking stackers at 488 Linden Avenue in the Downtown Transit Core (DTC) Zoning District in accordance with SSFMC Chapters 20.280, 20.480 & 20.490. The Board had the following comments: 1. Revise the project elevations to include different hues of the primary color on the bays and /or corner towers to assist in breaking up the massing of the building. 2. Revise the project elevations so that the windows, doors and balconies have consistent detailing on all elevations. 3. Consider switching the location of the trash enclosure area and the utility room in order to provide an eiatinside entrance door for residents to access trash enclosure area. 4. Consider widening the entrance gate from Lux Ave to allow easier access to the loading zone. 5. Revise the landscape plan to provide upright and narrow street trees that will grow up to the 2nd & 3rd floor of the building and have high branching. Recommend Approval with Conditions. 366 OWNER City of South San Francisco APPLICANT Brookwood Equities ADDRESS 255 Cypress Ave PROJECT NUMBER P15 -0017: UP15 -0003 & DR15 -0016 PROJECT NAME Multi Residential Units (Case Planner: Billy Gross) DESCRIPTION Use Permit and Design Review to construct a new 5 -story residential building with 46 units with mechanical parking stackers at 255 Cypress Avenue in the Grand Avenue Core (GAC) Zoning District in accordance with SSFMC Chapters 20.280, 20.480 & 20.490. The Board had the following comments: 1. The Board liked the overall project. 2. Consider using 3/4 inch brick instead of the �/z brick to provide a greater shadow line. 3. Revise the design of the backflow preventer alcove to have a more coordinated appearance with the remainder of the 3rd Lane elevation. 4. Consider adding landscaping around the parklette area with some decorative planters and street trees; the corner street tree should be a broadleafed evergreen species. Recommend Approval with Conditions. OWNER Thomas Callan J Jr APPLICANT John R. Hansen ADDRESS Westborough Blvd & Oakmont Dr PROJECT NUMBER P15 -0014: DR15 -0014 PROJECT NAME Mulit - Family Residential Units (Case Planner: Billy Gross) DESCRIPTION Preliminary Application Review Design Review to construct 7 townhomes and 12 single family dwellings at the corner of Westborough Blvd and Oakmont in the Low Density Residential (RL -8) Zoning District in accordance with SSFMC Chapters 20.080 & 20.480. The Board had the following comments: 1. Revise the architectural design of the residences in Area A to be more articulated and include more architectural features, in keeping with the residences in Area B. 2. Consider combining the two retention areas into one larger area that could double as both water retention and a play area. 3. Revise the site plan to include a play area for children. 4. Revise the landscape plan to replace the proposed circular tree planters with a design that will allow the trees to grow more successfully. The tree planter areas should replace existing soil within a 12 -foot diameter for a depth of 12 inches. Resubmittal required. 367 Attachment 7 Parking Demand Analysis for Proposed Projects at 255 Cypress and 418 Linden, dated May 11, 2015 16 N1 NELSON NYGAARD �111I Ilf ° °" III III A II X11 To: Alan Katz and Jelani Dotson, Brookwood Equities LLC From: Nelson\Nygaard Date: May 1 1, 2015 Subject: Parking Demand Analysis for Proposed Projects at 255 Cypress and 488 Linden III ilm "I Ilk 0 11 °T 1110 II The memorandum examines the anticipated parking demand generated by two residential projects proposed for downtown South San Francisco and provides recommendations on parking ratios. Project Description Brookwood Equities has proposed to construct two projects in downtown South San Francisco. The Cypress project is located at 255 Cypress Avenue on the south west corner of Grand and Cypress Avenues and is comprised of 46 residential units, of which 20% or 9 units are below market rate units, with 5,500 square feet of retail on the ground floor. While the future retail tenants have not been selected yet, they will likely be locally serving retail use such as a coffee shop and casual restaurants which are designed to serve residents in the building, nearby residents, and residents and employees walking to and from the nearby Caltrain station. The Linden project is located at 488 Linden Avenue on the south east corner of Linden Avenue and Lux Avenue and is comprised of 38 residential units of which 20% or 8 units are below market rate units. These projects will likely appeal primarily to single car or no car young professionals who are looking for a neighborhood where they can walk and bike to services and amenities and utilize transit to reach jobs in San Francisco and the Peninsula as both sites are located within a 1/2 mile of the South San Francisco Caltrain station. A summary of each project is provided in Figure 1. Figure 1 Preliminary Project Description 116 NEW MONTGOMERY STREET, SUITE 500 SAN FRANCISCO, CA 94105 415 - 284 -1544 FAX 415 - 284 -1554 Parking Demand Analysis Linden At 255 Cypress Avenue, 61 parking spaces can be provided on -site using a combination of 2 and 3 tier parking lifts. At 488 Linden Avenue, 47 parking spaces can be provided on -site using a combination of 2 and 3 tier parking lifts. Parking will be unbundled from the rental cost of the units and will be assigned. The number of spaces assured for each unit will be controlled and additional spaces will be assigned if there are vacant spaces available. Retail parking is not included, as retail demand will be accommodated off -site at existing public parking facilities and thus will be addressed separately from the residential component. III III III III IIING Ilk III..... 0 U III III III..... 1IM T Both projects are located within the Downtown Station Area Specific Plan boundaries. As such these projects are subject to the following parking requirements (Figure 2). Figure 2 Parking Requirements It should be noted that while City of South San Francisco's zoning code has established different rates for units with the same number of bedrooms based on their size, there is not empirical research that shows a direct relationship between an increase in unit size and an increase in parking demand. Under the City of South San Francisco's zoning code requirements, 255 Cypress Avenue would be required to provide a total of 65 parking spaces and 488 Linden Avenue would be required to provide a total of 53 parking spaces. However, if one - bedroom units were treated equally regardless of their square footage, a total of 57 spaces would be required at 255 Cypress Avenue and a total of 47 spaces would be required at 488 Linden Avenue (Figure 3). Parking Demand Analysis x r- Draft Brookwood Group Figure 3 Adjusted Residential Parking Requirements While the project is proposing to provide fewer parking spaces than required under current code, with 61 spaces at Cypress and 47 spaces at Linden, the project would meet the City's requirements if all one - bedrooms were treated the same. Thus, the project is proposing to reduce the number of parking spaces required for larger one - bedroom units from 1.5 spaces per unit to 1 space per unit. 11PAIR111<11HING 11 11 11 11 111 YS111S A parking demand analysis was undertaken in order to determine the potential parking impacts generated by the proposed project utilizing the following data sources: • Parking demand data from the Institute of Transportation Engineers Parking Generation Manual, 4 t Edition • U.S. Census data on vehicle ownership rates • Research on vehicle ownership and travel behavior trends • Comparable projects included in Transform's GreenTRIP parking database ITE Peak Parking Demand The Institute of Transportation Engineers (ITE) Parking Generation Manual, 4 t Edition, is considered an industry standard for calculating parking demand for a range of different land uses. According to ITE, the average weekday peak period parking demand for Low /Mid -Rise Apartments' nationwide is 1.23 vehicles per dwelling unit. Figure 4 shows the peak parking demand for each project as compared to what would be required by code. At 255 Cypress Avenue a total of 57 parking spaces would be needed and at 488 Linden Avenue a total of 47 parking spaces would be needed; less than the minimum number of spaces required by the zoning code. 1 ITE Land Use Code 221 Low/Mid -Rise Apartment suburban was selected as the best fit for these projects a i i Parking Demand Analysis x r- Draft Brookwood Group Figure 4 ITE Peak Parking Demand Vehicle Ownership & Travel Behavior Trends Vehicle ownership rates are often lower at developments that are located within walking distance to transit and a range of amenities and services, such as the proposed project, when compared to sites that are only accessible by car. As shown in Figure 5, vehicle ownership is lower in the downtown area as compared to the city as a whole. Figure 5 Vehicle Ownership Rates Although the current downtown household auto ownership rate is higher than what is being proposed for this project, the target demographic for this project is single car or no car young professionals. Vehicle ownership rates and travel behavior particularly amongst those under 34 years of age have been trending downward. Studies show the following trends between 2oo1 and 2009 for 18 to 34 year-old S2: • Reduced per capita vehicle -miles 23 %, from 10,300 to 7,9oo annual miles • Took 16% more walk trips and 24% more bike trips • Traveled 40% more annual passenger -miles on public transit • Reduced the share that has a driver's license from '79% to 74 • Have different transport and housing preferences These changes in behavior can be linked to shifts in lifestyle preferences, particularly a reduced interested in owning or using a car as their primary mode of transportation. Only 62 percent of U.S. millennials choose driving in a car they own as their preferred mode of transportation, as opposed to 81 percent of other generations.3 This group is also looking for communities where there are a multitude of transportation options. A Rockefeller Foundation/ Transportation for www.vt %., ,oc:: fi.uti.ure. r,.;(, page 14 3 Millennials in Motion: Changing Travel Habits of Young Americans and the Implications for Public Policy. U.S. PIRG. Page 23 Parking Demand Analysis x r- Draft Brookwood Group America survey of 18 to 34 year -olds living in 10 major American cities found that 8o percent said that being able to "live in a place where I don't need to rely on a car to get around" is important.4 Lastly, consideration should be given to the affordable housing component of the project as a study by the Victoria Transport Policy Institute shows that lower income households tend to own fewer cars.5 Comparable Projects TransForm, a non - profit planning organization, has established the GreenTRIP Parking Database6 which provides parking data from more than 65 multi - family residential sites around the San Francisco Bay Area. Data collection began in November 2013, and is ongoing. The data collected shows parking supplied and parking used at each site as well as a number of site characteristics such as the number of units, mix of unit types, any transportation services provided. The examples shown in Figure 6 are for residential projects located within a 1/2 mile of a commuter rail station. As shown in Figure 6 while the range of spaces used per unit varies from a low of 0.76 at Hillsdale Gardens to a high of 1.34 at Aster Park, parking is not fully utilized at any of these sites, suggesting that parking requirements are not necessarily a reflection of actual parking demand. It should be noted that when looking at parking demand on a per bedroom basis the parking demand is even lower. 4 Millennials in Motion: Changing Travel Habits of Young Americans and the Implications for Public Policy. U.S. PIRG. Page 25 5 Parking Requirement Impacts on Housing Affordability Victoria Transport Policy Institute. Pg 4. http: / /www.vtpi.org /park- hou.pdf 6 For more information on the GreenTRIP Parking Database go to http://www.trcinsformcci.org/greentrip/parking- database Parking Demand Analysis xr- Figure 6 Parking Demand at Comparable Projects 801 Alma 801 Alma St., Palo • 50 units Alto ■ Bike parking 1.20 1.02 0.48 ■ 100% affordable ■ No unbundling Aster Park 1059 Reed Ave., • 95 units Sunnyvale ■ Bike parking 1.57 1.34 0.58 ■ 59% affordable ■ No unbundling Delaware Pacific 1990 S. Delaware • 60 units St., San Mateo ■ Bike parking ■ Free transit passes 1.48 1.28 0.63 ■ 100% affordable ■ No unbundling Madera 455 West Evelyn • 203 units Apartments Ave., ■ Free transit passes Mountain View ■ Bike parking 1.37 0.88 0.62 ■ 3% affordable ■ Unbundled parking Vendome 750 Miller Street, • 74 units Apartments San Jose • Discounted transit passes 1.47 1.16 0.7 ■ Bike parking ■ 0% affordable ■ No unbundling Hillsdale Gardens 3500 Edison St. • 697 units San Mateo ■ Bike parking 0.98 0.76 0.43 ■ 0% affordable ■ No unbundling 255 Cypress 255 Cypress Ave., • 46 units Avenue South San ■ 20% affordable Francisco Bike parking 1.26 ■ Unbundled parking 488 Linden 488 Linden Ave., • 38 units Avenue South San ■ 20% affordable Francisco Bike parking 1.24 ■ Unbundled parking Parking Demand Analysis x r- Draft Brookwood Group Both the 255 Cypress Avenue and 488 Linden Avenues projects will incorporate short and long- term bicycle parking and unbundled parking for residents. These programs are described in more detail below. Unbundled Parking Both 255 Cypress Avenue and 488 Linden Avenue will be unbundling the cost of parking from the cost of housing. Research shows that charging separately for parking is the single most effective strategy to encourage households to own fewer cars, and subsequently reduce vehicle trips. According to the Parking Requirement Impacts on Housing Affordability study by Todd Litman, unbundling residential parking can significantly reduce household vehicle ownership. 7 Studies reveal that the elasticity of vehicle ownership with respect to price is typically -0.4 to -1.0, so a io% increase in total vehicle costs reduces vehicle ownership 4 -10 %.8 Bicycle Parking Purchasing a bike for commuting or recreational purposes can be a significant financial investment for many. As such, even a small chance of theft can reduce bicycle usage when all parking options leave bikes exposed to the elements. Sheltered parking and secure indoor bicycle parking also offer more protection from theft and vandalism when compared to standard bicycle racks and can encourage bicycle ownership and use. In order to support the use of bicycles for both work and non -work trips short -term and long- term bicycle parking will be provided at 255 Cypress Avenue and 488 Linden Avenue. Using guidelines for bicycle parking established by the Association of Pedestrian and Bicycle Professionals (APBP) which is considered an industry best practice the following bicycle parking ratios will be used. These ratios are designed for more urbanized area or an area with a higher bike mode share: ■ Residential — Long -term: 0.5 spaces per bedroom — Short -term: o.10 spaces per bedroom ■ Retail — Long -term: 1 space per io,000 sq. ft. with a minimum of 2 spaces — Short -term: 1 space per 2,000 sq. ft. with a minimum of 2 spaces At 255 Cypress Avenue a total of 50 long -term bicycle parking spaces will be located in a secure room located off of the lobby on the ground floor for a ratio of 0.7 spaces per bedroom. This room will only be accessible to residents. A total of 15 short -term bicycle parking spaces will be located on Cypress adjacent to the main lobby and on Grand across from the retail. At 488 Linden Avenue, long -term bicycle parking for 4o bicycles will be located off of the lobby in a locked room. 7 Victoria Transport Policy Institute (2009), Parking Requirement Impacts on Housing Affordability, http: / /www.vtpi.org /park- hou.pdf . Todd Litman is the founder and executive director of the Victoria Transport Policy Institute. http: / /www.vtpi.org /documents /resume.pdf 8 Victoria Transport Policy Institute (2009), Transportation Elasticities, http: / /www.vtpi.org /tdm /tdm1 l.htm a a i Parking Demand Analysis xr- This equates to 0.7 long -term spaces per bedroom. Eight short -term bicycle parking spaces will be located on Lux or Linden within view of the building's main lobby. Carsharing Brookwood Equities would like to provide a carshare vehicle on -site and is currently exploring the feasibility of attracting a carshare provider to this development. This measure will further support single car or no car households by providing a vehicle for excursions or to run errands for those households without a car or to serve as a back -up vehicle for single car households. III III..... C 0 MM 1IM IC TIII 0 II While the project is proposing to provide fewer parking spaces than required under current code, with 58 spaces at Cypress and 47 spaces at Linden, the project would meet the City's requirements if all one - bedrooms were treated the same. If one - bedroom units were treated equally regardless of their square footage, a total of 57 spaces would be required at 255 Cypress Avenue and a total of 47 spaces would be required at 488 Linden Avenue. In addition there is not empirical research that shows a direct relationship between an increase in unit size and an increase in parking demand. In addition, given the various data points analyzed, the anticipated tenant demographic for these projects, and the inclusion of unbundled parking and a high level of bicycle parking, reducing the amount of parking required to one parking space for each one - bedroom unit, should still adequately meet parking demand. Attachment 8 CEQA Documents a. 255 Cypress Avenue Air Quality Analysis and Health Risk Assessment, dated May 5, 2015 b. 418 Linden Avenue Air Quality Analysis and Health Risk Assessment, dated May 5, 2015 c. Final Mitigation Monitoring and Reporting Program from DSASP EIR 377 Attachment 8.a 255 Cypress Avenue Air Quality Analysis and Health Risk Assessment, dated May 5, 2015 378 255 Cypress Avenue Air Quality Analysis and Health Risk Assessment Brookwood Equities LLC Two Embarcadero Center Suite 2910 San Francisco, CA 94111 Prepared by: RCH Group 11060 White Rock Road Rancho Cordova, California 95670 u�. I May 5, 2015 379 TABLE OF CONTENTS 255 Cypress Avenue Air Quality Analysis and Health Risk Assessment Section 1. Introduction Section 2. Project Overview Section 3. Analysis Methodologies Section 4. Existing Conditions Section 5. Impact Analysis and Mitigation Section 6. References Table 1 — Air Quality Data Summary (2012 - 2014) 5 Table 2 — BAAQMD Air Quality Significance Thresholds 9 Table 3 — Estimated Project Construction Schedule 11 Table 4 — Estimated Project Construction Equipment Usage 11 Table 5 — Construction Trips and Trip Lengths 12 Table 6 — Estimated Daily Construction Emissions (pounds) 13 Table 7 — Estimated Daily Project Operational Emissions (pounds) 17 Table 8 — Estimated Annual Project Operational Emissions (tons) 17 Table 9 — Estimated Health Impacts for Existing Receptors 24 Table 10 — Estimated Health Impacts for Proposed Receptors 26 ATTACHMENTS A - Construction and Operational Emission Calculations B - Health Risk Assessment Page 1 1 1 3 7 27 1.0 INTRODUCTION This document provides an overview of the existing air quality conditions at the proposed project site, the air quality regulatory framework, an analysis of potential air quality impacts that would result from implementation of the proposed project, and identification of applicable mitigation measures. Other issues related to air emissions covered in this document include the assessment of emissions related to air quality health impacts (health risk assessment or HRA). The supporting methodology and assumptions used in the air quality analysis are provided in Attachment A: Emission Calculation Output Files and Attachment B: Health Risk Assessment. 2.0 PROJECT OVERVIEW The proposed project would be located at 255 Cypress Avenue in South San Francisco.' The proposed project includes the development of 46 residential units and 6,000 square feet of retail space with a total of 74,491 square feet of enclosed space and 58 parking spaces, built on 0.46 acres (20,200 square feet) of land, with 132 residents. The CalTrain South San Francisco station is located approximately 0.25 mile to the east. The site is currently occupied by two buildings (2,250 square feet with two single story restaurants and 1,750 square feet with two story residential) that would be demolished prior to project construction. 3.0 ANALYSIS METHODOLGY Intermittent (short -term construction emissions that occur from activities, such as removal of structures, site - grading, and building construction) and long -term air quality impacts related to the operation of the proposed project were evaluated. The analysis focuses on daily and annual emissions from these construction and operational (mobile, area, stationary, and fugitive sources) activities. This air quality analysis is consistent with the methods described in the Bay Area Air Quality Management District (BAAQMD) CEQA Air Quality Guidelines (dated June 2010, updated in May 2011, and revised in May 2012).3 Mitigation measures are presented to reduce impacts to less than significant. ' Current Addresses: 201 through 219 Grand Avenue, South San Francisco 2 Current Addresses: 217 and 219 Grand Avenue, South San Francisco 3 The BAAQMD's June 2010 adopted thresholds of significance were challenged in a lawsuit. Although the BAAQMD's adoption of significance thresholds for air quality analysis has been subject to judicial actions, the lead agency has determined that BAAQMD's Revised Draft Options and Justification Report (October 2009) provide substantial evidence to support the BAAQMD recommended thresholds. Therefore, the lead agency has determined the BAAQMD recommended thresholds are appropriate for use in this analysis. 381 The air quality analysis includes a review of criteria pollutant emissions such as carbon monoxide (CO)5, nitrogen oxides (NO,), sulfur dioxide (S02), volatile organic compounds (VOC) as reactive organic gases (ROG)6, particulate matter less than 10 micrometers or less (coarse or PM10), particulate matter less than 2.5 micrometers or less (fine or PM2.5 ).7 The HRA addresses diesel particulate matter (DPM) emissions from on -site construction equipment and haul trucks and cumulative impacts from nearby permitted stationary sources, CalTrain operations, nearby roadways, and Highway 101. Regulatory models used to estimate air quality impacts include: • California Air Resources Board's (CARB) EMFAC20118emissions inventory model. EMFAC2011 is the latest emission inventory model that calculates emission inventories and emission rates for motor vehicles operating on roads in California. This model reflects CARB's current understanding of how vehicles travel and how much they emit. EMFAC2011 can be used to show how California motor vehicle emissions have changed over time and are projected to change in the future. • CARB OFFROAD20119 emissions inventory model. OFFROAD2011 is the latest emission inventory model that calculates emission inventories and emission rates for off - road equipment such as loaders, excavators, and off -road haul trucks operating in California. This model reflects CARB's current understanding of how equipment operates and how much they emit. OFFROAD2011 can be used to show how California off -road equipment emissions have changed over time and are projected to change in the future. • CalEEMod (California Emissions Estimator Model Version 2013.2.2)10 land use emissions model estimates construction emissions due to demolition and construction activities and operations. 4 Criteria air pollutants refer to those air pollutants for which the United States Environmental Protection Agency (USEPA) and California Air Resources Board (CARB) has established National Ambient Air Quality Standards (NAAQS) and California Ambient Air Quality Standards (CAAQS) under the Federal Clean Air Act (CAA). 5 CO is a non — reactive pollutant that is a product of incomplete combustion of organic material, and is mostly associated with motor vehicle traffic, and in wintertime, with wood — burning stoves and fireplaces. 6 VOC means any compound of carbon, excluding carbon monoxide, carbon dioxide, carbonic acid, metallic carbides or carbonates, and ammonium carbonate, which participates in atmospheric photochemical reactions and thus, a precursor of ozone formation. ROGs are any reactive compounds of carbon, excluding methane, CO, CO2 carbonic acid, metallic carbides or carbonates, ammonium carbonate, and other exempt compounds. The terms VOC and ROG are often used interchangeably. ' PM10 and PM2.5 consists of airborne particles that measure 10 micrometers or less in diameter and 2.5 micrometers or less in diameter, respectively. PM10 and PM2.5 represent fractions of total particulate matter that can be inhaled into the air passages and the lungs, causing adverse health effects. 8 CARB EMFAC2011 User's Guide, December 20, 2012, hlW://www.arb.ca.gov/msei/modeling.htm 9 CARB OFFROAD2011 Instructions, http: / /www.arb.ca. og v /msproLordiesel /info 1085 /oei write up.pdf 11 California Emissions Estimator Model User's Guide, July 2013. hlW: / /www.caleemod.com/ 382 • AERMOD (American Meteorological Society /USEPA Regulatory Model) is an atmospheric dispersion model which can simulate point, area, volume, and line emissions sources and has the capability to include simple, intermediate, and complex terrain along with meteorological conditions and multiple receptor locations. 11,12 AERMOD is commonly executed to yield 1 -hour maximum and annual average concentrations (in µg/m3) at each receptor. 4.0 EXISTING CONDITIONS The project site is located within the San Francisco Bay Area Air Basin (Air Basin), which encompasses Alameda, Contra Costa, Santa Clara, San Francisco, San Mateo, Marin, and Napa Counties, and the southern portions of Solano and Sonoma Counties. The Air Basin is characterized by complex terrain which distorts normal wind flow patterns, consisting of coastal mountain ranges, inland valleys, and bays. Regional Meteorology Air quality is affected by the rate, amount, and location of pollutant emissions and the associated meteorological conditions that influence pollutant movement and dispersal. Atmospheric conditions, including wind speed, wind direction, stability, and air temperature, in combination with local surface topography (i.e., geographic features such as mountains, valleys, and San Francisco Bay), determine the effect of air pollutant emissions on local air quality. The climate of the greater San Francisco Bay Area, including San Mateo County, is a Mediterranean -type climate characterized by warm, dry summers and mild, wet winters. The climate is determined largely by a high- pressure system that is often present over the eastern Pacific Ocean. In winter, the Pacific high - pressure system shifts southward, allowing storms to pass through the region. During summer and fall, air emissions generated within the Bay Area can combine with abundant sunshine under the restraining influences of topography and subsidence inversions to create conditions that are conducive to the formation of photochemical pollutants, such as ozone and secondary particulates, such as sulfates and nitrates. The peninsula region of the Bay Area Air Basin (Bay Area) extends from the area northwest of San Jose to the Golden Gate. The Santa Cruz Mountains extend up the center of the peninsula, with elevations exceeding 2,000 feet at the south end, and gradually decreasing to an elevation of 500 feet in South San Francisco, where it terminates. San Francisco is at the north end of the peninsula and because most of the topography of San Francisco is less than 200 feet, the marine " USEPA Preferred/Recommended Models, AERMOD Modeling System, hlW: / /www.epa.gov /ttn/ scram /dispersion prefrec.htm#aermod. 12 Title 40 CFR Part 51, Revision to the Guideline on Air Quality Models: Adoption of a Preferred General Purpose (Flat and Complex Terrain) Dispersion Model and Other Revisions; Final Rule, hlW://www.epa.gov/ttn/scraiii/gliidance/gLiide/qppw 05.pdf. 383 layer is able to flow across most of the city, making its climate relatively cool and windy. 13 However, the area of South San Francisco and San Francisco International Airport (SFO) experience lower winds and a greater frequency of calm winds (approximately 13 percent of the year), especially during the nighttime and cooler season, due to sheltering effect of terrain to the west. Meteorological data collected at the SFO, which is approximately two miles south of the project site, are representative of general project conditions. Average maximum and minimum winter (i.e., January) temperatures at SFO are 56 and 42 Fahrenheit ( °F), respectively, while average summer (i.e., July) maximum and minimum temperatures are 72 and 54 °F, respectively. Precipitation at SFO averages approximately 20 inches per year. 14 Annual average wind speeds range from five to 10 miles per hour (mph) throughout the peninsula. The east side of the mountains has a westerly wind pattern; however, it is influenced by local topographic features. That is, a few hundred feet rise in elevation will induce flow around that feature instead of over it during stable atmospheric conditions. This can change the wind pattern by as much as 90 °F over short distances. On mornings without a strong pressure gradient, areas on the east side of the peninsula often experience eastern flow in the surface layer, induced by upslope flow on the east - facing slopes and by the bay breeze. The bay breeze is rarely seen in the afternoon because the stronger sea breeze dominates the flow pattern. 15 Local Air Quality The BAAQMD maintains a network of monitoring stations within the Air Basin that monitor air quality and compliance with applicable ambient standards. The monitoring station closest to the project site is in San Francisco, approximately 7.5 miles to the north of the project site; where levels of ozone (03), PM10, PM2.5, CO, NO2, and S02 are recorded. Table 1 summarizes the most recent three years of data (2012 through 2014) from the San Francisco air monitoring station at 10 Arkansas Street. The State 24 -hour PM10 standard and federal 24 -hour PM2.5 standard were each exceeded once in 2012. The federal 1 -hour NO2 standard was exceeded once in 2012. The federal 24 -hour PM2.5 standard was exceeded twice in 2013. No exceedances of the air quality standards occurred during 2014. No other State or federal air quality standards were exceeded during the three year period. " Bay Area Air Quality Management District. October 4, 2010, Bay Area Climatology — Peninsula h1W: / /www.baagmd.gov/ Divisions / Communications - and - Outreach / Air - Quality -in- the- Bay- Area/Bay -Area- Climatolo , /Sy ibregions/Penins Lila. aspx. 14 Western Regional Climate Center, Local Climate Data Summaries for San Francisco International Airport, California. 1-ittp:// www. wrcc. dri .edu /cgi- bin /clilcd.pl ?ca23234. 15 Bay Area Air Quality Management District. October 4, 2010, Bay Area Climatology — Peninsula http:// www. baagmd. gov / Divisions / Communications - and - Outreach / Air - Quality -in- the- Bay- Area/Bay -Area- Climatolo , /g Sy ibregions/Penins Lila. aspx. ., The Bay Area is considered a nonattainment area for ground -level ozone and fine particulate matter (PM2.5) under both the Federal Clean Air Act and the California Clean Air Act. The area is also considered nonattainment for respirable particulates (PM10) under the California Clean Air Act, but not the Federal Clean Air Act. The area has attained both State and National Ambient Air Quality Standards for CO, S02, and NO2. As part of an effort to attain and maintain ambient air quality standards for ozone and particulate matter, the BAAQMD has established thresholds of significance for these air pollutants and their precursors. These thresholds are for ozone precursor pollutants (ROG and NOX), PM10 and PM2.5, and apply to both construction period and operational period impacts. Table 1: Air Quality Data Summary (2012 - 2014) Source: USEPA (hip. / /www.epagov /air /data) CARE Air Quality Data Statistics ( http.// www .arb.ca.gov /adamhvelcome.html, 2012 -2014. The BAAQMD's Community Air Risk Evaluation (CARE) program was initiated in 2004 to evaluate and reduce health risks associated with exposure to outdoor air toxics (TACs) in the Bay Area. Based on findings of the latest report, DPM was found to account for approximately 85 percent of the cancer risk from airborne toxics. Carcinogenic compounds from gasoline - powered cars and light duty trucks were also identified as significant contributors: 1,3- butadiene 385 contributed four percent of the cancer risk - weighted emissions, and benzene contributed three percent. Collectively, five compounds—diesel PM, 1,3- butadiene, benzene, formaldehyde, and acetaldehyde —were found to be responsible for more than 90 percent of the cancer risk attributed to emissions. All of these compounds are associated with emissions from internal combustion engines. The most important sources of cancer risk- weighted emissions were combustion - related sources of DPM, including on -road mobile sources (31 percent), construction equipment (29 percent), and ships and harbor craft (13 percent). A 75 percent reduction in DPM was predicted between 2005 and 2015 when the inventory accounted for CARB's diesel regulations. Overall, cancer risk from TAC dropped by more than 50 percent between 2005 and 2015, when emissions inputs accounted for state diesel regulations and other reductions. 16 Modeled cancer risks from TAC in 2005 were highest near sources of DPM: near core urban areas, along major roadways and freeways, and near maritime shipping terminals. Peak modeled risks were found to be located east of San Francisco, near West Oakland, and the maritime Port of Oakland. BAAQMD has identified seven impacted communities in the Bay Area: • Western Contra Costa County and the cities of Richmond and San Pablo. • Western Alameda County along the Interstate 880 corridor and the cities of Berkeley, Alameda, Oakland, and Hayward. • San Jose. • Eastern side of San Francisco. • Concord. • Vallejo. • Pittsburgh and Antioch. The proposed project is within the city of South San Francisco, which is not part of the seven CARE program impacted communities in the Bay Area. The health impacts in the Bay Area, as determined both by pollution levels and by existing health vulnerabilities in a community, is approximately 160 cancer risk per million persons, while in South San Francisco, the health impacts is approximately 110 cancer risk per million persons. 17 Nearby Sensitive Receptors Land uses such as schools, children's daycare centers, hospitals, and convalescent homes are considered to be more sensitive than the general public to poor air quality because the population :. groups associated with these uses have increased susceptibility to respiratory distress. Persons engaged in strenuous work or exercise also have increased sensitivity to poor air quality. The CARB has identified the following people as most likely to be affected by air pollution: children less than 14 years of age, the elderly over 65 years of age, athletes, and those with cardiovascular and chronic respiratory diseases. These groups are classified as sensitive population groups. Residential areas are considered more sensitive to air quality conditions than commercial and industrial areas, because people generally spend longer periods of time at their residences, resulting in greater exposure to ambient air quality conditions. Recreational uses are also considered sensitive, due to the greater exposure to ambient air quality conditions and because the presence of pollution detracts from the recreational experience. According to the BAAQMD, workers are not considered sensitive receptors because all employers must follow regulations set forth by the Occupation Safety and Health Administration to ensure the health and well -being of their employees. BAAQMD considers the relevant zone of influence for an assessment of air quality health risks to be within 1,000 feet of a project site. The project property is generally bound by commercial and light industrial to the east, along Cypress Avenue and Airport Boulevard, and immediately south of the proposed project. Multifamily and single family residential is located to the north, west, and south of the proposed project. These residential units tend to be one to three story structures. The nearest existing residential land uses are within 100 feet to the north and within adjacent properties to the west of the project site. No schools are located within 1,000 feet of the proposed project. 5.0 IMPACT ANALYSIS AND MITIGATION The air quality analysis includes a review of pollutant emissions such as CO, NO,, S02, VOC as ROG, PM10, and PM2.5. The HRA addresses the DPM emissions from on -site construction equipment and haul trucks associated with the proposed project and cumulative impacts from nearby permitted sources, CalTrain (located to the east), nearby roadways, and Highway 101 (located to the east). Threshold of Significance The significance of potential impacts was determined based on State CEQA Guidelines, Appendix G, and the BAAQMD CEQA Air Quality Guidelines. Using Appendix G evaluation thresholds, the proposed project would be considered to have significant air quality impacts if it were to: A. Conflict with or obstruct implementation of the applicable air quality plan; B. Violate any air quality standard or contribute substantially to an existing or projected air quality violation; C. Expose sensitive receptors to substantial pollutant concentrations; 387 D. Create objectionable odors affecting a substantial number of people; or E. Result in a cumulatively considerable net increase of any nonattainment pollutant, and /or health impacts (including releasing emissions that exceed quantitative thresholds for ozone precursors). The air quality analysis follows the methodology presented in the recent CEQA Guidelines released by the BAAQMD in May 2012. However, since the May 2012 CEQA Air Quality Guidelines do not provide specific significance thresholds, the thresholds and methodologies from the BAAQMD's 2011 CEQA Air Quality Guidelines were used to evaluate the potential impacts of construction and operation of the proposed project. The thresholds of significance applied to assess project -level air quality impacts are: • Average daily construction exhaust emissions of 54 pounds per day of ROG, NOX, or PM2.5 or 82 pounds per day of PM 10; • Average daily operation emissions of 54 pounds per day of ROG, NOX, or PM2.5 or 82 pounds per day of PM 10; or result in maximum annual emissions of 10 tons per year of ROG, NOX, or PM2.5 or 15 tons per year of PM 10; • Exposure of persons by siting a new source or a new sensitive receptor to substantial levels of TACs resulting in (a) a cancer risk level greater than 10 in one million, (b) a noncancerous risk (chronic or acute) hazard index greater than 1.0, or (c) an increase of annual average PM2.5 of greater than 0.3 micrograms per cubic meter (µg/m3). For this threshold, sensitive receptors include residential uses, schools, parks, daycare centers, nursing homes, and medical centers; or • Frequently and for a substantial duration, create or expose sensitive receptors to substantial objectionable odors affecting a substantial number of people. Assessment of a significant cumulative impact if it would result in: • Exposure of persons, by siting a new source or a new sensitive receptor, to substantial levels of TACs during either construction or operation resulting in (a) a cancer risk level greater than 100 in a million, (b) a noncancer risk (chronic or acute) hazard index greater than 10.0, or (c) annual average PM2.5 of greater than 0.8 µg/m3. The BAAQMD air quality significance thresholds are found in Table 2. Table 2: BAAQMD Air Quality Significance Thresholds Illgll 111111 �,qn�u uuii�iipiuu�iuuu�u��nr�a� ttiYu uuu ° °iiii ,,;�� �u a �ii� uuu NH Nprynnqncp�lu� "'ail �°�'"�,uuu�HUU�q��,�i� �ii� �uu NH Nprynnqncp�lu� ,;, " Criteria Air Pollutants ROG 54 54 10 NOX 54 54 10 , PM 10 82 82 15 PM2.5 54 54 10 CO NA 9.0 ppm (8 -hour) and 20.0 ppm (1 -hour) Fugitive Dust Best Management NA Practices Project Health Risk and Hazards Excess Cancer Risk 10 per million 10 per million Chronic Hazard Index 1.0 1.0 Acute Hazard Index 1.0 1.0 Incremental Annual Average PM2.5 0.3 µg /m3 0.3 µg /m3 Cumulative Health Risk and Hazards Excess Cancer Risk 100 per million 100 per million Chronic Hazard Index 10.0 10.0 Acute Hazard Index 10.0 10.0 Incremental Annual Average PM2.5 0.8 µg/m3 0.8 µg/m3 SOURCE: BAAQMD Adopted Air Quality CEQA Thresholds of Significance - June 2, 2010, hlW: / /www.baagmd.gov /—/ media / Files / Planning %20and %2OResearch /CEQA /Summary Table Proposed BAAQM D CEQA Thresholds May ®3 2010.ashx ?la =en IMPACT AQ -1: Would the proposed project conflict with or obstruct implementation of the applicable air quality plan? Less - than - Significant Impact The BAAQMD adopted its 2010 Bay Area Clean Air Plan (CAP) in accordance with the requirements of the California Clean Air Act (CCAA) to implement all feasible measures to reduce ozone; provide a control strategy to reduce ozone, particulate matter, air toxics, and GHG emissions in a single, integrated plan; and establish emission control measures to be adopted or implemented in the 2010 through 2012 timeframe.18 The primary goals of the 2010 Bay Area CAP are to: • Attain air quality standards; • Reduce population exposure and protecting public health in the Bay Area; and • Reduce GHG emissions and protect the climate. " In 2015, the BAAQMD initiated an update to the 2010 Bay Area Clean Air Plan. On February 28, 2014, the District held a public meeting to report progress on implementing the control measures in the 2010 Clean Air Plan , to solicit ideas and strategies to further reduce ozone precursors, particulate matter, toxic air contaminants, and greenhouse gases, and to seek input on innovative strategies to reduce greenhouse gases, mechanisms for tracking progress in reducing GHG's, and how the BAAQMD may further support actions to reduce GHGs. The culmination of this effort will be an updated Clean Air Plan. BAAQMD recommends that approving a project where an air quality plan consistency determination is required to analyze the project with respect to the following questions: (1) Does the project support the primary goals of the air quality plan; (2) Does the project include applicable control measures from the air quality plan; and (3) Does the project disrupt or hinder implementation of any 2010 CAP control measures? If the first two questions are concluded in the affirmative and the third question concluded in the negative, the BAAQMD considers the project consistent with air quality plans prepared for the Bay Area. Any project that would not support the 2010 CAP goals would not be considered consistent with the 2010 CAP. The recommended measure for determining project support of these goals is consistency with BAAQMD CEQA thresholds of significance. As presented in the subsequent impact discussions, the proposed project with mitigations would not exceed the BAAQMD significance thresholds; therefore, the proposed project with mitigations would support the primary goals of the 2010 CAP. As mentioned, projects that incorporate all feasible control measures in the air quality plan are considered consistent with the 2010 CAP. The proposed project would support the primary goals of the 2010 CAP, it would be consistent with all applicable 2010 CAP control measures, and would not disrupt or hinder implementation of any 2010 CAP control measures. Therefore, there would be a less- than - significant impact associated with, conflicting with, or obstructing implementation of the applicable air quality plan. The recommended measure for determining project support of these goals is consistency with BAAQMD- approved CEQA thresholds of significance. Therefore, if approval of a project would not result in significant and unavoidable air quality impacts after the application of all feasible mitigation, the proposed project would be considered consistent with the 2010 Bay Area CAP. The proposed project would result in a less- than - significant impact based on the construction and operational emission estimates and the entirety of this analysis directly. Therefore, as defined by the BAAQMD's significance criteria, the proposed project would be consistent with the 2010 Bay Area CAP, and thus, the impact would be less than significant. IMPACT AQ -2: Would proposed project construction activities conflict with or obstruct implementation of the applicable air quality plan or violate any air quality standards or contribute substantially to an existing or projected air quality violation? Less -than- Significant Impact Construction activities are expected to commence in early 2016 with demolition of the existing structures. Grading and site improvements would occur during the spring of 2016 and building construction and paving would occur within the summer and fall of 2016. The proposed project would be constructed in a single phase estimated to require 12 months. Table 3 provides the 390 estimated construction schedule for each phase: demolition, site preparation, grading, building construction, paving, and coating. Table 3: Estimated Project Construction Schedule 1 Demolition 1/1/2016 1/14/2016 10 2 Site Preparation 1/15/2016 1/15/2016 1 3 Grading 1/16/2016 1/19/2016 2 4 Building Construction 1/20/2016 12/17/2016 238 5 Paving 12/18/2016 12/24/2016 5 6 Architectural Coating 12/25/2016 12/31/2016 5 SOURCE: GARB CaIEEMod Version 2013.2.2. 1 8 81 Proposed project construction would generate short -term emissions of air pollutants, including fugitive dust and equipment exhaust emissions. The BAAQMD CEQA Air Quality Guidelines recommend quantification of construction- related exhaust emissions and comparison of those emissions to significance thresholds. The CalEEMod (California Emissions Estimator Model, Version 2013.2.2) was used to quantify construction- related pollutant emissions. CalEEMod output worksheets are included in Attachment A. The demolition, site preparation, and grading would occur sequentially for a period of approximately 13 days using equipment such as backhoes, graders, dozers, loaders, and haul trucks. The site is currently occupied by structures totaling approximately 4,000 square feet that would be demolished prior to construction. Site preparation would consist of land clearing and grubbing. The estimated construction equipment associated with the proposed project along with the number of pieces of equipment, daily hours of operation, horsepower (hp), and load factor (i.e., percent of full throttle) are shown in Table 4. Table 4: Estimated Project Construction Equipment Usage Demolition Concrete/Industrial Saws 1 8 81 0.73 Demolition Tractors/Loaders /Backhoes 2 6 97 0.37 Demolition Rubber Tired Dozers 1 1 255 0.40 Site Preparation Graders 1 8 174 0.41 Site Preparation Tractors/Loaders /Backhoes 1 8 97 0.37 Grading Concrete/Industrial Saws 1 8 81 0.73 Grading Rubber Tired Dozers 1 1 255 0.40 Grading Tractors/Loaders /Backhoes 2 6 97 0.37 Building Construction Cranes 1 4 226 0.29 Building Construction Forklifts 2 6 89 0.20 Building Construction Tractors/Loaders /Backhoes 2 8 97 0.37 391 Paving Cement and Mortar Mixers 4 6 9 0.56 Paving Pavers 1 7 125 0.42 Paving Rollers 1 7 80 0.38 Paving Tractors/Loaders /Backhoes 1 7 97 0.37 Architectural Coating Air Compressors 1 6 78 0.48 SOURCE: CARB CaIEEMod Version 2013.2.2. Based on CalEEMod, a total of approximately 18 haul truck trips were estimated during demolition. An average daily construction crew of 38 employees would be present on -site during building construction with less workers during other construction phases. Table 5 provides a list of the expected trips and trip lengths by construction phase of haul trucks, vendors, and construction workers. A total of 500 cubic yards of soil export is anticipated during construction to create a subsurface parking structure; requiring 62 haul truck trips. Table 5: Construction Trips and Trip Lengths Demolition 10 0 18 12.4 7.3 20.0 Site Preparation 5 0 0 12.4 7.3 20.0 Grading 10 0 0 12.4 7.3 20.0 Building Construction 38 7 62 12.4 7.3 20.0 Paving 18 0 0 12.4 7.3 20.0 Architectural Coating 8 0 0 12.4 7.3 20.0 SOURCE: CARB CaIEEMod Version 2013.2.2. The emissions generated from these construction activities include: • Dust (including PM10 and PM2.5) primarily from "fugitive" sources (i.e., emissions released through means other than through a stack or tailpipe) such as material handling and travel on unpaved surfaces; and • Combustion emissions of criteria air pollutants (ROG, NOX, CO, PM10, and PM2.5) primarily from operation of heavy off -road construction equipment, haul trucks, (primarily diesel- operated), and construction worker automobile trips (primarily gasoline - operated). Construction- related fugitive dust emissions would vary from day to day, depending on the level and type of activity, silt content of the soil, and the weather. High winds (greater than 10 miles per hour) occur infrequently in the area, less than two percent of the time. In the absence of mitigation, construction activities may result in significant quantities of dust, and as a result, local visibility and PM10 concentrations may be adversely affected on a temporary and intermittent basis during construction. In addition, the fugitive dust generated by construction would include not only PM10, but also larger particles, which would fall out of the atmosphere within several hundred feet of the site and could result in nuisance -type impacts. 392 Erosion control measures and water programs are typically undertaken to minimize these fugitive dust and particulate emissions. A dust control efficiency of over 50 percent due to daily watering and other measures (e.g., limiting vehicle speed to 15 mph, management of stockpiles, screening process controls, etc.) was estimated. Based on CalEEMod, one water application per day reduces fugitive dust by 34 percent, two water applications per day reduces fugitive dust by 55 percent, and three water applications per day reduces fugitive dust by 61 percent. Table 6 provides the estimated short -term construction emissions that would be associated with the proposed project and compares those emissions to the BAAQMD's significance thresholds for construction exhaust emissions. As the construction phases (i.e., grading, building construction, paving, etc.) are sequential, the average daily construction period emissions (i.e., total construction period emissions divided by the number of construction days) were compared to the BAAQMD significance thresholds. All construction- related emissions would be below the BAAQMD significance thresholds. Table 6: Estimated Daily Construction Emissions (pounds) SOURCE: CARB CalEEMod Version 2013.2.2. Nevertheless, BAAQMD's CEQA Air Quality Guidelines require a number of best management practices to control fugitive dust and exhaust emissions. With regard to construction activities, the Air Quality Conditions of Approval that are required to be implemented as part of the proposed project pursuant to the City of South San Francisco's project review and building permit process are also summarized within the following: AIR QUALITY DUST CONTROL: All construction projects are required to comply with the BAAQMD dust control measures. These measures are levied by the Engineering Division as a condition of building permit issuance and are monitored for compliance by staff and /or special City Engineering and /or Planning inspectors. The measures include all the Basic Fugitive Dust Emissions Reduction Measures and some of the Additional Fugitive Dust Emissions Reduction Measures identified by the BAAQMD May, 2011. The City requires projects to: a) Water all active construction sites at least twice daily. 393 Unmitigated Construction 5.4 14.3 0.9 0.9 11.2 Significance Threshold 54 54 82 54 - -- Significant (Yes or No)? No No No No No Mitigated Construction 4.5 11.4 0.1 0.1 10.9 Significance Threshold 54 54 82 54 - -- Significant (Yes or No)? No No No No No SOURCE: CARB CalEEMod Version 2013.2.2. Nevertheless, BAAQMD's CEQA Air Quality Guidelines require a number of best management practices to control fugitive dust and exhaust emissions. With regard to construction activities, the Air Quality Conditions of Approval that are required to be implemented as part of the proposed project pursuant to the City of South San Francisco's project review and building permit process are also summarized within the following: AIR QUALITY DUST CONTROL: All construction projects are required to comply with the BAAQMD dust control measures. These measures are levied by the Engineering Division as a condition of building permit issuance and are monitored for compliance by staff and /or special City Engineering and /or Planning inspectors. The measures include all the Basic Fugitive Dust Emissions Reduction Measures and some of the Additional Fugitive Dust Emissions Reduction Measures identified by the BAAQMD May, 2011. The City requires projects to: a) Water all active construction sites at least twice daily. 393 b) Cover all trucks hauling soil, sand, and other loose materials or require all trucks to maintain at least two feet of freeboard. c) Pave, apply water three times daily, or apply (non- toxic) soil stabilizers on all unpaved access roads, parking areas, and staging areas at construction sites. d) Sweep daily (with water sweepers) all paved access roads, parking areas and staging areas at construction sites. e) Sweep streets daily (with wet power vacuum sweepers) if visible soil material is carried onto adjacent public streets at least once per day. The use of dry power sweeping is prohibited. f) Hydroseed or apply (non- toxic) soil stabilizers to inactive construction areas (previously graded areas inactive for ten days or more). g) Enclose, cover, water twice daily, or apply non -toxic soil binders to exposed stockpiled materials. h) Install sandbags or other erosion - control measures to prevent silt runoff to public roadways. i) Replant vegetation in disturbed areas as quickly as possible. j) Watering should be used to control dust generation during the break -up of pavement. k) Cover all trucks hauling demolition debris from the site. 1) Use dust -proof chutes to load debris into trucks whenever feasible. m) Water or cover stockpiles of debris, soil, sand or other materials that can be blown by the wind. AIR QUALITY COMBUSTION EXHUAST CONTROL: All construction projects are required to comply with the BAAQMD's combustion exhaust control measures. The measures include Basic Exhaust Emissions Reduction Measures and some of the Enhanced Exhaust Emissions Reduction Measures identified by the BAAQMD May, 2011. The City requires projects to: n) All construction equipment shall be maintained and properly tuned in accordance with manufacturer's specifications. All equipment shall be checked by a certified mechanic and determined to be in proper running order prior to operation. o) Use alternative fueled construction equipment, if possible. p) All vehicle speeds on unpaved roads shall be limited to 15 mph. 394 q) All roadways, driveways, and sidewalks to be paved shall be completed as soon as possible. Building pads shall be laid as soon as possible after grading unless seeding or soil binders are used. r) Diesel powered equipment shall not be left inactive and idling for more than five minutes, and shall comply with applicable BAAQMD rules. s) Idling times shall be minimized either by shutting equipment off when not in use or reducing the maximum idling time to five (5) minutes (as required by the California airborne toxics control measure Title 13, Section 2484 of the California Code of regulations). Clear signage shall be provided for construction workers at all access points. t) Post a visible sign with the telephone number and person to contact at the Lead Agency regarding dust complaints. This person shall respond and take corrective action within 24 hours. The Air District phone number shall also be visible to ensure compliance with applicable regulations. u) All off -road equipment greater than 25 horsepower (hp) and operating for more than 20 total hours over the entire duration of construction activities shall meet the following requirements: 1. Where access to alternative sources of power are available, portable diesel engines shall be prohibited; and 2. All off -road equipment shall have: a. Engines that meet or exceed either USEPA or CARB Tier 2 off -road emission standards, and b. Engines that are retrofitted with a CARB Level 3 Verified Diesel Emissions Control Strategy (VDECS). Acceptable options for reducing emissions include the use of late model engines, low- emission diesel products, alternative fuels, engine retrofit technology, after - treatment products, add -on devices such as particulate filters, and /or other options as such are available. AIR QUALITY TOXIC AIR CONTAMINANTS: The potential for toxic air contaminants (asbestos and lead based paint) to be released into the environment is regulated and monitored through the Building Division in compliance with BAAQMD Regulation 11, Rule 2 during Demolition. Any applicant requesting a building or demolition permit involving a structure suspected of containing asbestos (defined as a building constructed prior to 1978) and /or lead based paint (defined as a building constructed prior to 1960) is required to obtain a J- Permit from the BAAQMD. The J Permit is required to be posted on the job site and if it is not there the job can be fined 395 by the BAAQMD and may be shut down by the City's Building Division. Through this process, the BAAQMD and the City Building Division ensure that asbestos and lead based paints are handled, removed, encapsulated and disposed of in accordance with prevailing law requisite to protect the environment, the people conducting the work and nearby sensitive receptors. The process typically requires surveys and removal of lead based paints and asbestos by licensed contractors certified in the handling methods requisite to protect the environment and public health and safety. The process also provides for BAAQMD and City supervision to insure compliance. AIR QUALITY VOLATILE ORGANIC COMPOUNDS: BAAQMD Regulation 8, Rule 3 for Architectural Coatings. Emissions of VOC due to the use of architectural coatings are regulated by the limits contained in Regulation 8: Organic Compounds, Rule 3: Architectural Coatings (Rule 8 -3). Rule 8 -3 was revised on January 1, 2011 to include more stringent VOC limit requirements. The revised VOC architectural coating limits specify that the use paints and solvents with a VOC content of 100 grams per liter or less for interior and 150 grams per liter or less for exterior surfaces shall be required. All construction emissions would be below the BAAQMD significance thresholds with the implementation of these measures that are required by law. Therefore, proposed project impacts that would be associated with construction - related exhaust emissions would be less than significant with implementation of the measures the City requires by law. IMPACT AQ -3: Would the operation of the proposed project conflict with or obstruct implementation of the applicable air quality plan or violate any air quality standards or contribute substantially to an existing or projected air quality violation? Less -than- Significant Impact CalEEMod was used to estimate emissions that would be associated with motor vehicle use, space and water heating, and landscape maintenance emissions expected to occur after the proposed project construction is complete and operational. The proposed project land use types and size and other project - specific information were input to the model. Unless otherwise noted, the CalEEMod model defaults for San Mateo County were used. CalEEMod provides emissions for transportation, areas sources, electricity consumption, natural gas combustion, electricity usage associated with water usage and wastewater discharge, and solid waste land filling and transport. CalEEMod output worksheets are included in Attachment A. The proposed project land uses were input into CalEEMod, which included 46 apartment units (as Apartment Mid - Rise), 6,000 feet of retail space, and 58 parking spaces on a 0.46 -acre site. The following default CalEEMod trip rates were used in the air quality analysis: Apartment Mid - Rise — 303 daily trips per weekday and Retail — 258 daily trips per weekday. The default trip lengths and trip types specified by CalEEMod for San Mateo County were used. 396 Estimated daily and annual operational emissions that would be associated with the proposed project are presented in Tables 7 and 8 and are compared to BAAQMD's thresholds of significance. Fireplaces and wood stoves, if part of the proposed project, would result in potentially significant operational ROG emissions, but such emissions would be reduced through restrictions on hearths as part of the proposed project. As indicated in Tables 7 and 8, the estimated proposed project operational emissions would be below the BAAQMD's significance thresholds and would be less than significant. Table 7: Estimated Daily Project Operational Emissions (pounds) SOURCE: CARB CalEEMod Version 2013.2.2. Table 8: Estimated Annual Project Operational Emissions (tons) Unmitigated Unmitigated Area 18.2 0.27 2.87 2.87 23.9 Energy 0.01 0.11 <0.01 <0.01 0.05 Mobile 1.91 3.31 0.04 0.04 18.3 Total Project 20.1 3.68 2.92 2.91 42.2 Significance Threshold 54 54 82 54 - -- Significant Impact? Yes No No No No No Mitigated Mitigated Area 2.06 0.04 0.07 0.07 3.84 Energy 0.01 0.11 _ <0.01 <0.01 0.05 Mobile 1.91 3.31 0.04 0.04 18.3 Total Project 3.98 3.46 0.12 0.12 22.2 Significance Threshold 54 54 82 54 - -- Significant Impact? No No No No No SOURCE: CARB CalEEMod Version 2013.2.2. Table 8: Estimated Annual Project Operational Emissions (tons) SOURCE: CARB CalEEMod Version 2013.2.2. 397 Unmitigated Area 0.39 <0.01 <0.01 <0.01 0.40 Energy <0.01 0.02. <0.01 <0.01 <0.01 Mobile 0.28 0.51 _ <0.01 <0.01 2.72 Total Project 0.67 0.53 0.02 0.02 3.12 Significance Threshold 10 10 15 10 - -- Significant (Yes or No)? No No No No No Mitigated Area 0.35 <0.01 <0.01 <0.01 0.35 Energy <0.01 0.02 <0.01 <0.01 <0.01 Mobile 0.28 0.51 <0.01 <0.01 2.72 Total Project 0.64 0.53 0.01 0.01 3.07 Significance Threshold 10 10 15 10 - -- Significant (Yes or No)? No No No No No SOURCE: CARB CalEEMod Version 2013.2.2. 397 With regard to proposed project operations, the Air Quality Conditions of Approval that are required to be implemented as part of the proposed project pursuant to the City of South San Francisco's project review and building permit process are also summarized within the following: AIR QUALITY VEHICLE EMISSIONS: The potential for air quality degradation from vehicle emissions is regulated to some extent by Section 20.400.003 of the South San Francisco Code. Table 20.400.003 in the Zoning Ordinance establishes specific program requirements for a project generating one hundred or more vehicle trips per day or a project seeking a floor area ratio (FAR) bonus. The required alternative mode (mode shift) use for all projects is twenty -eight percent below standard trip rates modeled for the project without TDM measures in place. Projects with an increased FAR are required to increase their alternative mode use accordingly. The Planning Division implements and monitors this requirement. AIR QUALITY HEARTH EMISSIONS: The BAAQMD adopted Regulation 6, Rule 3: Wood - Burning Devices to reduce the harmful emissions that come from wood smoke. The Rule requires cleaner - burning (e.g., natural gas or propane) USEPA- certified stoves and inserts in new housing construction. As indicated, the estimated operational emissions that would be associated with the proposed project would be below the BAAQMD's significance thresholds and would be less than significant. IMPACT AQ -4: Would proposed project operational activities cause an exceedance of the California Ambient Air Quality Standards (CAAQS) for CO at traffic intersections? Less - than- Significant Impact Increased traffic volumes due to the project would result in increased pollutant emissions in the vicinity of the roads utilized by this traffic, which can cause pollutant levels to exceed the ambient air quality standards. The BAAQMD has identified the following screening criteria for determining whether a project's motor vehicle CO emissions would likely cause ambient air quality standards to be exceeded: • The project is not consistent with an applicable congestion management program established by the county congestion management agency for designated roads or highways, the regional transportation plan, and local congestion management agency plans. • The project traffic would increase traffic volumes at affected intersections to more than 44,000 vehicles per day. • The project traffic would increase traffic volumes at affected intersections to more than 24,000 vehicles per day where vertical and /or horizontal mixing is substantially limited (e.g., tunnel, parking garage, bridge underpass, natural or urban street canyon, below - grade roadway). The proposed project would generate minimal new traffic trips and would comply with these screening criteria. Based on the BAAQMD's criteria, proposed project traffic would not exceed CO standards and therefore, no further analysis was conducted for CO impacts. This impact would be considered less than significant on a project -level and cumulative basis. The proposed project would be approximately 74,491 gross square feet in area. The daily traffic trip rate would be 561, according to CalEEMod Version 2013.2.2; the default emissions model value. Compared to the Trip Generation Manual, 9,h Edition Institute of Transportation Engineers, the air quality results tend to be an overestimation of the impacts given the air quality analysis often uses a conservatively high value for the trip rate. Vehicular access to the site would not include going through any tunnels, underpasses or natural or urban street canyons. The proposed project would include a parking garage. Nevertheless, the proposed project traffic would not cause the daily traffic volumes to exceed the screening criteria based on the circulation infrastructure and the projected traffic volumes. Therefore, impacts that would be associated with long -term operational CO exhaust emissions would be less than significant. IMPACT AQ -5: Would proposed project operational activities expose sensitive receptors to substantial concentrations of toxic air contaminants (TACs)? Less - than - Significant Impact According to BAAQMD CEQA Air Quality Guidelines and Air Toxics New Source Review Program Health Risk Screening Analysis Guidelines19, health effects from carcinogenic air toxics are usually described in terms of individual cancer risk. "Individual Cancer Risk" is the likelihood that a person exposed to concentrations of TACs over a 70 -year lifetime will contract cancer, based on the use of standard risk - assessment methodology. The Maximally Exposed Individual (MEI) represents the worst —case risk estimate, based on a theoretical person continuously exposed for 70 years at the point of highest compound concentration in the air. This is a highly conservative assumption, since most people do not remain at home all day and on average residents change residences every 11 to 12 years. In addition, this assumption assumes that residents are experiencing outdoor concentrations for the entire exposure period. The significance of impact to sensitive receptors is dependent on the chance of contracting cancer from exposure to TACs such as DPM or of having adverse health effects from exposure to non - carcinogenic TACs. A project is considered to be significant if the incremental cancer risk at an existing receptor exceeds 10 in a million. 19 Bay Area Air Quality Management District. Air Toxics New Source Review Program Health Risk Screening Analysis Guidelines. January 2010. h! W:// www .baagmd.gov /—/media/Files /En ing eerinL Air %2OToxics %2OPrograms /hrsa guidelines.ashx 399 This HRA analyzed the potential incremental cancer risks to sensitive receptors in the project vicinity of the proposed project, using CalEEMod and emission rates from CARB's EMFAC2011 and OFFROAD2011 emission models. Emission factors were input into the USEPA AERMOD (Version 14134)20 atmospheric dispersion model to calculate ambient air concentrations at receptors in the project vicinity. This assessment is intended to provide a worst —case estimate of the increased exposure by employing a standard emission estimation program, an accepted pollutant dispersion model, approved toxicity factors, and exposure parameters. These conservative health risk methodologies were used in this HRA in order to estimate maximum potential health risks. These methodologies overestimate both non - carcinogenic and carcinogenic health risk, possibly by an order of magnitude or more. Therefore, for carcinogenic risks, the actual probabilities of cancer formation in the populations of concern due to exposure to carcinogenic pollutants are likely to be lower than the risks derived using the risk assessment methodology. The extrapolation of toxicity data in animals to humans, the estimation of concentration prediction methods within dispersion models; and the variability in lifestyles, fitness and other confounding factors of the human population also contribute to the overestimation of health impacts. Therefore, the results of the HRA are highly overstated. Emissions of PM2.5 are associated with health risks. The BAAQMD has established a separate significance threshold for PM2.5 to protect public health. For individual projects, the BAAQMD significant threshold for PM2.5 impacts is an average annual increase of 0.3 µg/m3. For cumulative analysis, BAAQMD recommends that the PM2.5 concentrations from all sources within a 1,000 foot radius of the project's impact area be assessed and compared to a cumulative threshold of an average annual increase of 0.8 µg /m3. In accordance with California Office of Environmental Health Hazard Assessment (OEHHA) guidelines, 21 the HRA was accomplished by applying the highest estimated concentrations of TAC at the receptors analyzed to the established cancer potency factors and acceptable reference concentrations for non - cancer health effects. Attachment B provides additional information on the methodology used for the HRA. Cumulative Health Impact Methodology The BAAQMD's CEQA Air Quality Guidelines also include standards and methods for determining the significance of cumulative health risk impacts. The method for determining cumulative health risk requires the tallying of health risk from permitted stationary sources, zo US Environmental Protection Agency, AERMOD Modeling System, hlW: / /www.epa. gov /scram001 /dispersion prefrec.htm. 21 Office of Environmental Health Hazard Assessment. Air Toxics Hot Spots Program Guidance Manual for Preparation ofHealth Risk Assessment. August 2003. h!W: / /oehha.ca. gov / air /hot spots /pdf /HRAguidetinal.pdf X11 major roadways and any other identified substantial TAC sources in the vicinity of a project site (i.e., within a 1,000 -foot radius) and then adding the individual sources to determine whether the BAAQMD's cumulative health risk thresholds of 100 in one million are exceeded. The non - cancer hazard index significance threshold of 1.0 is defined in the BAAQMD CEQA Air Quality Guidelines. For cumulative analysis of non - cancer hazard index, BAAQMD requires that the hazards from all sources within a 1,000 foot radius of the proposed project's impact area be assessed and compared to a cumulative hazard index threshold of 10. BAAQMD has developed a geo- referenced database of permitted stationary emissions sources throughout the San Francisco Bay Area and the Stationary Source Risk & Hazard Analysis Tool (May, 2012) for estimating cumulative health risks from the permitted sources. Eleven permitted sources are located within 1,000 feet of the project site. The CalTrain commuter rail line is also located within 1,000 feet to the west. BAAQMD has also developed a geo- referenced database of major roadways in the Bay Area and the Highway Screening Analysis Tool (May 2011) for estimating cumulative health risks from such roadways. An identified major roadway, Highway 101, is located 465 feet to the east of the project site and 535 feet to the east of existing residences. BAAQMD CEQA Air Quality Guidelines also require the inclusion of surface streets within 1,000 feet of the project with annual average daily traffic (AADT) of 10,000 or greater 22. The following roadways meet this criterion: Grand Avenue, Linden Avenue, and Airport Boulevard. Incremental Cancer Risk Cancer risk is defined as the lifetime probability of developing cancer from exposure to carcinogenic substances. Cancer risks are expressed as the chances in one million of contracting cancer, for example, ten cancer cases among one million people exposed. Following HRA guidelines established by California Office of Environmental Health Hazard Assessment (OEHHA)23 and BAAQMD's Health Risk Screening Analysis Guidelines, incremental cancer risks were calculated by applying toxicity factors to modeled TAC concentrations in order to determine the inhalation dose (milligrams per kilogram of body weight per day [mg /kg- day]). Health Impacts on Existing Residences As a result of construction activities (with implementation of the measures the City requires by law), the maximum cancer risk for a residential -adult receptor would be 0.38 per million and for a 22 BAAQMD County Surface Street Screening Tables, May 2011 and CEHTP Traffic Linkage Service Demonstration, http: / /www.ehib.org/traffic tootisp. 23 Office of Environmental Health Hazard Assessment. Air Toxics Hot Spots Program Guidance Manual for Preparation ofHealth Risk Assessment. August 2003. h!W: / /oehha.ca.2ov/ air /hot spots /pdf/HRAguidefinal.pdf 401 residential -child would be 4.34 per million (based on a 70 -year annual average DPM concentration of 0.0007 µg /m3 per dispersion modeling analysis and risk exposure calculation methodologies). The maximum cancer risk for a school child receptor would be less than 0.01 per million. Thus, the cancer risk due to construction activities is below the BAAQMD threshold of 10 per million and would be less than significant. Non - Cancer Health Hazard Both acute (short -term) and chronic (long -term) adverse health impacts unrelated to cancer are measured against a hazard index (HI), which is defined as the ratio of the predicted incremental exposure concentration from the project to a published reference exposure level (REL) that could cause adverse health effects. The RELs are published by OEHHA based on epidemiological research. The ratio (referred to as the Hazard Quotient [HQ]) of each non - carcinogenic substance that affects a certain organ system is added to produce an overall HI for that organ system. The overall HI is calculated for each organ system. The impact is considered to be significant if the overall HI for the highest- impacted organ system is greater than 1.0. The chronic reference exposure level for DPM was established by the California OEHHA24 as 5 µg/m3. Thus, the project - related annual concentration of DPM cannot exceed 5.0 µg /m3; resulting in a chronic acute HI of greater than 1.0 (i.e., DPM annual concentration /5.0 µg /m). There is no acute REL for DPM. However, diesel exhaust does contain acrolein and other compounds, which do have an acute REL. Based on BAAQMD's DPM speciation data, acrolein emissions are approximately 1.3 percent of the total DPM emissions. The acute REL for acrolein was established by the California OEHHA25 as 2.5 µg /m3. Thus, the project - related 1 -hour concentration of acrolein cannot exceed 2.5 µg /m3; resulting in an acute HI of greater than 1.0 (i.e., acrolein 1 -hour concentration /2.5 µg /m). The chronic HI would be less than 0.01, based on a project - related maximum annual diesel concentration of 0.050 µg /m3 (per dispersion modeling analysis) or 0.050 µg /m315.0 µg /m3, which is less than 0.01. The chronic HI would be below the BAAQMD threshold of 1 and the impact of the proposed project would therefore be less than significant. The acute HI would be 0.02, based on a project - related maximum 1 -hour diesel concentration of 3.0 µg/m3 (per dispersion modeling analysis) and acrolein speciation of 1.3 percent for DPM or 3.0 µg /m3/2.5 µg /m3 times 1.3 percent (acrolein per DPM), which is 0.02. The acute HI would be below the BAAQMD threshold of 1 and the impact of the proposed project would therefore be less than significant. 24 California Office of Environmental Health Hazards Assessment - Acute, 8 -hour, and Chronic Reference Exposure Levels, June 2014, http: / /www.oehha.ca.gov /air /allrels.html 2' California Office of Environmental Health Hazards Assessment - Acute, 8 -hour, and Chronic Reference Exposure Levels, June 2014, 1-itt12 www.oehha.ca.gov /air /allrels.html 402 PM2.5 Concentration Dispersion modeling was also used to estimate exposure of sensitive receptors to project - related concentrations of PM2.5. Because emissions of PM2.5 are associated with health risks, the BAAQMD has established a separate significance threshold to protect public health. For individual projects, the BAAQMD significance threshold for PM2.5 impacts is an average annual increase of 0.3 µg /m3. The BAAQMD guidance requires inclusion of PM2.5 exhaust emissions only in this analysis (i.e., fugitive dust emissions are addressed under BAAQMD dust control measures and are required by law to be implemented into project construction. The maximum annual PM2.5 concentration as a result of proposed project construction would be 0.05 µg /m3. The annual PM2.5 concentration due to implementation of the proposed project would be below the BAAQMD threshold of 0.3 pg /m3, and hence is considered less than significant. Cumulative Impacts on Existing Residences Table 9 lists the BAAQMD - permitted facility, major roadways, nearby roadways, and CalTrain within 1,000 feet of the proposed project. Table 9 also shows the cumulative cancer risk, hazard impact, and PM2.5 concentrations (in µg /m3) associated with these facilities (developed by BAAQMD), as well as the proposed project. The estimated cancer risk impacts at the nearest existing residence due to Highway 101 is 7.3 per million. The estimated cancer risk impacts at the nearest existing residence due to other nearby roadways is 6.2 per million. The estimated cancer risk impacts at the nearest existing residence due to CalTrain is 12.1 per million. The estimated cancer risk impacts at the nearest existing residence due to nearby permitted sources is 2.5 per million. The cumulative cancer risk from the construction activities and other nearby sources is 28.4 per million. Table 9 represents the cumulative health impacts on the maximum exposed existing receptors. The cumulative impacts are below the BAAQMD significance thresholds. Thus, the proposed project health impacts (due to construction activities) plus existing sources would be a less than significant cumulative impact. Secondly, given that the proposed project would not result in increased health impacts exceeding the project -level thresholds, the proposed project would also not result in a cumulatively considerable contribution to localized health risk and hazard impacts, resulting in a less- than - significant cumulative air quality impact. 403 Table 9: Estimated Health Impacts for Existing Receptors IIIIIIIIIIIIIIIIIIIIuIIIIJI �,�, �N N IVVup N,NN "" »�fl�ry�� � � NNN yN� ;, ?il'Y inirc�n» k�INNIN N���NN�NC» �1N qq N » »io uyy�r�, v »s »���� � NNRNNN�NN�� ➢AA91I�IU! �!� ������������I�I�����I����I����I�����w���������I����I������C �C1q �C��» �CflgC ������� Nflflq��BflftCflgp Ill& RNttgCftBflgCftBflqCftB���ft����tl����������������������������flft�E »flflq »��flgpNBfl »CflgC »Cflq »ft�flq�NB� »� »ft�0q ftC�1q ft�flgCftCflq�» flflq» »Bflq »ftCflq »ftN'�d &�� »4N�Rflb'�» »ft�t� »��flq »ft�flgNh�C q» »»�gC�fl� »�flflq »�fl»q�Bflq� »Bft�ft�fl Proposed Project Proposed Project 0.38/4.34 0.02/0.01 0.05 Significance Threshold 10 1.0 0.3 Significant (Yes or No)? No No No Cumulative Unocal #1026 Grand Martcoa 1.85 <0.01 NOD Auto Body Shop No risk/concentration. No further study needed. Wright Cleaners Replaced equipment with Petroleum machine. No risk or concentration. South City Shelly 0.44 <0.01 First Class Pupa's Auto Body Shop No risk/concentration. No further study needed. Chino's Service Stationa 0.16. <0.01 E &S Ahuactzin Auto Body Shop No risk/concentration. No further study needed. Carrera Auto Body/Tai Shing Auto Body No risk/concentration. No further study needed. Autobahn Specialties No risk/concentration. No further study needed. Central Cleaners Facility closed in September of 2010. No risk/concentration. Harbor Auto Body No risk/concentration. No further study needed. CalTrain Operations' 12.1 0.05/0.03 0.15 Highway 101 7.30 0.01 0.07 Grand Avenue 3.97 0.01 0.15 Linden Avenue 1.01 0.01 0.04 Airport Boulevard 1.19 0.01 0.05 Proposed Project 0.38 0.02/0.01 0.05 Cumulative Impact 28.4 0.14/0.11 0.51 Significance Threshold 100 10 0.8 Significant (Yes or No)? No No No Note: Proposed project cancer risk values are 16r adult and child, respectively. Proposed project hazard impact values are 16r acute and chronic, respectively. a Cancer Risk, Hazard Impact, and PM2.5 Concentration values for the source gasoline station was adjusted using the BAAQMD Gas Station Distance Multiplier. b CalTrain Cancer Risk, Hazard Impact, and PM2.5 Concentration values based on the assumption of the number of diesel locomotives passing by on a weekly basis. The AERMOD model was used to estimate maximum downwind concentrations and potential health risk at sensitive receptors from the rail line source. Additional information is provided in Attachment B. c Highway 101 Cancer Risk, Hazard Impact, and PM2.5 Concentration values for Highway 101 are based on 6 foot height estimates provided by the BAAQMD developed geo- referenced database of permitted and Highway TAC emissions. Additional information is provided in Attachment B. . n Health Impacts on Proposed Residences The following describes the health risk assessment associated with proposed residences as a result of existing cumulative sources such as permitted sources (i.e., diesel generators, gasoline stations), CalTrain operations, nearby roadways, and Highway 101. The BAAQMD's CEQA Air Quality Guidelines include standards and methods for determining the significance of cumulative health risk impacts. The method for determining cumulative health risk requires the tallying of health risk from permitted stationary sources, major roadways and any other identified substantial TAC sources in the vicinity of a project site (i.e., within a 1,000 -foot radius) and then adding the individual sources to determine whether the BAAQMD's cumulative health risk thresholds are exceeded. Table 10 lists the BAAQMD - permitted facility, major roadways, and CalTrain within 1,000 feet of the proposed project. Table 10 shows the cumulative cancer risk, hazard impact, and PM2.5 concentrations (in µg/m3) associated with these facilities. Table 10 represents the cumulative health impacts on proposed receptors. Of note, the highest health impacts for proposed receptors occur at the first floor of the complex and decrease with increasing height. The estimated cancer risk impacts at the proposed residence due to Highway 101 is 8.0 per million. The estimated cancer risk impacts at the proposed residence due to other nearby roadways is 6.6 per million. The estimated cancer risk impacts at the proposed residence due to CalTrain is 4.59 per million. The estimated cancer risk impacts at the proposed residence due to nearby permitted sources is 6.1 per million. The cumulative cancer risk from the roadways and other nearby sources is 25.3 per million. The cumulative impacts are below the BAAQMD significance thresholds. Thus, the siting of new residence at the project site would be a less - than- significant health impact. 405 Table 10: Estimated Health Impacts for Proposed Receptors IIIIIIIIIIIIIIIIIIIIIII N ",r�fN nN IIIIIIIVVuU N,NNuN ��� flfl����dtl gpg9 � NNN NNE ; �Y q�pll ��KKU k NNIN N,���NN�NCn ��N N viuu up IVuluu � vAV���� � NNRNNN�1 N ➢NA91I IU! Unocal #1026 Grand Martcoa 5.37 <0.01 - NOD Auto Body Shop No risk/concentration. No further study needed. Wright Cleaners Replaced equipment with Petroleum machine. No risk or concentration. South City Shelly 0.55_ <0.01 First Class Pupa's Auto Body Shop No risk/concentration. No further study needed. Chino's Service Stationa 0.19 <0.01 E &S Ahuactzin Auto Body Shop No risk/concentration. No further study needed. Carrera Auto Body/Tai Shing Auto Body No risk/concentration. No further study needed. Autobahn Specialties No risk/concentration. No further study needed. Central Cleaners Facility closed in September of 2010. No risk/concentration. Harbor Auto Body No risk/concentration. No further study needed. CalTrain Operations' 4.59 0.03/0.01 0.06 Highway 101 8.04. 0.01 0.07 Grand Avenue 3.97 0.01 0.15 Linden Avenue 1.08 0.01 0.04 Airport Boulevard 1.53 0.01 0.06 Cumulative Impact 25.3 0.07/0.05 0.38 Significance Threshold 100 10 0.8 Significant (Yes or No)? No _ No No Note: Cancer risk values are for adult and child, respectively. Hazard impact values are for acute and chronic, respectively. a Cancer Risk, Hazard Impact, and PM2.5 Concentration values for the source gasoline station was adjusted using the BAAQMD Gas Station Distance Multiplier. b CalTrain Cancer Risk, Hazard Impact, and PM2.5 Concentration values based on the assumption of the number of diesel locomotives passing by on a weekly basis. The AERMOD model was used to estimate maximum downwind concentrations and potential health risk at sensitive receptors from the rail line source. Additional information is provided in Attachment B. c Highway 101 Cancer Risk, Hazard Impact, and PM2.5 Concentration values for Highway 101 are based on 6 foot height estimates provided by the BAAQMD developed geo- referenced database of permitted and Highway TAC emissions. Additional information is provided in Attachment B. IMPACT AQ -6: Would the proposed project create objectionable odors affecting a substantial amount of people? Less - than - Significant Impact Though offensive odors from stationary and mobile sources rarely cause any physical harm, they still remain unpleasant and can lead to public distress, generating citizen complaints to local governments. The occurrence and severity of odor impacts depend on the nature, frequency, and intensity of the source; wind speed and direction; and the sensitivity of receptors. The BAAQMD's significance criteria for odors are subjective and are based on the number of odor complaints generated by a project. Generally, the BAAQMD considers any project with the potential to frequently expose members of the public to objectionable odors to cause a significant impact. With respect to the proposed project, diesel - fueled construction equipment exhaust would generate some odors. However, these emissions typically dissipate quickly and would be unlikely to affect a substantial number of people. I1• Odor impacts could also result from siting a new sensitive receptor near an existing odor source. Examples of land uses that have the potential to generate considerable odors include, but are not limited to wastewater treatment plants; landfills; refineries; and chemical plants. In the BAAQMD CEQA Air Quality Guidelines (dated May 2011), odor screening distances were recommended by BAAQMD for a variety of land uses. Projects that would site a new receptor farther than the applicable screening distance from an existing odor source would not likely result in a significant odor impact. The odor screening distances are not used as absolute screening criteria, rather as information to consider along with the odor parameters and complaint history. The odor screening distances for a sewage treatment plant, refinery, and chemical plant are two miles. 2' The proposed project is not within the odor screening distances for a sewage treatment plant, refinery, or other odor producing sources. Generally, odor emissions are highly dispersive, especially in areas with higher average wind speeds. However, odors disperse less quickly during inversions or during calm conditions, which hamper vertical mixing and dispersion. Therefore, odor impacts associated with the location of the proposed project would be less than significant. 6.0 REFERENCES Bay Area Air Quality Management District, 2005. BAAQMD Health Risk Screening Analysis Guidelines, http: / /www.baagmd.gov/pmt /air toxics /risk procedures j2olicies /hrsa guidelines.pdf. Bay Area Air Quality Management District. Air Toxics New Source Review Program Health Risk Screening Analysis Guidelines. January 2010. http: / /www.baagmd .gov /—/media/Files /Enineerin/ Air% 20Toxics %20Prorams /hrsa�aideline s.ashx Bay Area Air Quality Management District. Revised Draft Options and Justification Report California Environmental Quality Act Thresholds of Significance, October 2009. htlp: / /baagmd.gov / —/ media / Files/% 20PIanning ° /a20and %2OResearch/CEQ /Revised %20Draft% 20CLQA% 20Thresholds% 20% 2OJustification %2ORgporl %20Oct %202009.ashx Bay Area Air Quality Management District. Bay Area 2010 Clean Air Plan. September 15, 2010. http: / /www.baagmd. gov/ Divisions /Planning - and - Research /Plans /Clean - Air - Plans. aspx Bay Area Air Quality Management District. October 4, 2010, Bay Area Climatology. http: / /www.baagmd. gov/ Divisions / Communications - and- Outreach/Air- Quality -in -the -B ay- Area/Bay- Area- Climatology.aspx. 26 Sacramento Metropolitan Air Quality Management District, Guide to Air Quality Assessment in Sacramento County, June 2014, hlW: / /www.airquali .or cega/ce a uideLipdate/ Ch7OdorScreeningDistancesFINAL .pdf 407 Bay Area Air Quality Management District. October 4, 2010, Bay Area Climatology — Peninsula htlp: / /www.baagmd. gov/ Divisions / Communications - and- Outreach/Air- Quality -in -the -B ay- Area / Bay - Area - Climatology /Subregions/Peninsula.aspx. Bay Area Air Quality Management District. County Surface Street Screening Tables. May 2011. htlp: / /www.baagmd. gov / —/ media / Files / Planning ° /`20and %20Research/CEQA /County %20Surfac e% 20Street% 20Screening% 20Tables %20Dec %202011.ashx ?la =en Bay Area Air Quality Management District. CEQA Air Quality Guidelines. May 2012. http: / /www.baagmd. gov /—/ media / Files / Planning° /a20and ° /a20Re search/CEQA /BAAQMD ° /a20CE OA %20Guidelines Final May %202012.ashx ?la =en Bay Area Air Quality Management District. Recommended Methods for Screening and Modeling Local Risks and Hazards. May 2012. hlp: / /www.baagmd. gov / —/ media / Files / Planning %20and ° /a20Research/CE A /Risk %20Modeling % 20Approach %20May %202012.ashx ?la =en Bay Area Air Quality Management District. Identifying Areas with Cumulative Impacts from Air Pollution in the San Francisco Bay Area. March 2014. htlp: / /www.baagmd. gov / —/ media / Files /Planning ° /`20and %20Research /CARE %20Program /Docu meats/ hnpactCommunities- 2— Methodology.ashx ?la =en Bay Area Air Quality Management District. Improving Air Quality & Health in Bay Area Communities, Community Air Risk Program (CARE) Retrospective & Path Forward (2004 — 2013). April 2014. htlp: / /www.baagmd. gov / —/ media / Files / Planning% 20and %20Research /CARE %20Program /Docu meats /CARE Retrospective Apri12014.ashx ?la =en California Air Pollution Control Officers Association. CEQA and Climate Change: Evaluating and Addressing Greenhouse Gas Emissions from Projects Subject to the California Environmental Quality Act. January 2008. htlp://www.capcoa.org/wp- content /unloads /2012 /03 /CAPCOA- White- Paper.pdf from Diesel - Fueled Engines and Vehicles. October 2000. l'ittE://www.arb.ca.gov/diesel/documents/rEpfinal.j2df California Air Resources Board. Risk Management Guidance for the Permitting of New Stationary Diesel - Fueled Engines. October 2000. l'ittE://www.arb.ca.gov/diesel/documents/nngfinal.pdf California Air Resources Board. Air Quality and Land Use Handbook: A Community Health Perspective. April 2005. http:/ /www.arb.ca.�4ov /ch/handbook.pdf M California Air Resource Board. Diesel Particulate Matter Exposure Assessment Study for the Governor's Office of Planning and Research. Preliminary Draft CEQA Guideline Amendments 410 Attachment A Construction and Operational Emissions CalEEIVIod Output Files - Annual - Summer - Winter - Mitigation Report Rail Emission Files IG II t III Ies avaibbIe a t II a °ii °ii �-i� g 315 11N4a e Ave ii i ie, 411 Attachment B Health Risk Assessment Assumptions and Methodologies A health risk assessment (HRA) is accomplished in four steps: 1) hazards identification, 2) exposure assessment, 3) toxicity assessment, and 4) risk characterization. These steps cover the estimation of air emissions, the estimation of the air concentrations resulting from a dispersion analysis, the incorporation of the toxicity of the pollutants emitted, and the characterization of the risk based on exposure parameters such as breathing rate, age adjustment factors, and exposure duration; each depending on receptor type. This HRA was conducted in accordance with technical guidelines developed by federal, state, and regional agencies, including U.S. Environmental Protection Agency (USEPA), California Environmental Protection Agency (CalEPA), California Office of Environmental Health Hazard Assessment (OEHHA) Air Toxics Hot Spots Program Guidances, and the Bay Area Air Quality Management District (BAAQMD) Health Risk Screening Analysis Guidelines.2 According to CalEPA, a HRA should not be interpreted as the expected rates of cancer or other potential human health effects, but rather as estimates of potential risk or likelihood of adverse effects based on current knowledge, under a number of highly conservative assumptions and the best assessment tools currently available. TERMS AND DEFINITIONS As the practice of conducting a HRA is particularly complex and involves concepts that are not altogether familiar to most people, several terms and definitions are provided that are considered essential to the understanding of the approach, methodology and results: Acute effect — a health effect (non- cancer) produced within a short period of time (few minutes to several days) following an exposure to Toxic Air Contaminants (TACs). Cancer risk — the probability of an individual contracting cancer from a lifetime (i.e., 70 year) exposure to TAC such as DPM in the ambient air. Chronic effect — a health effect (non- cancer) produced from a continuous exposure occurring over an extended period of time (weeks, months, years). Hazard Index (HI) — the unitless ratio of an exposure level over the acceptable reference dose (RfC). The HI can be applied to multiple compounds in an additive manner. Hazard Quotient (HQ) — the unitless ratio of an exposure level over the acceptable reference dose (RfC). The HQ is applied to individual compounds. 1 Office of Environmental Health Hazard Assessment, 2003. Air Toxics Hot Spots Program Guidance Manual for Preparation ofHealth Risk Assessments, http: / /www.oehha.org/ air /hot spots /pdf/HRAgttidefinal.pdf. 2 Bay Area Air Quality Management District, 2005. BAAQMD Health Risk Screening Analysis Guidelines, hlW: / /www.baagmd.gov /pmt/air txics /risk procedures policies/hrsa guidelines.pdf. 412 Toxic air contaminants (TAC) — any air pollutant that is capable of causing short -term (acute) and /or long -term (chronic or carcinogenic, i.e., cancer causing) adverse human health effects (i.e., injury or illness). The current California list of TAC lists approximately 200 compounds, including particulate emissions from diesel - fueled engines. Human Health Effects - comprise disorders such as eye watering, respiratory or heart ailments, and other (i.e., non - cancer) related diseases. Health Risk Assessment (HRA) — an analysis designed to predict the generation and dispersion of TAC in the outdoor environment, evaluate the potential for exposure of human populations, and to assess and quantify both the individual and population -wide health risks associated with those levels of exposure. Incremental — under CEQA, the net difference (or change) in conditions or impacts when comparing the baseline to future year project conditions. Maximum exposed individual (MEI) — an individual assumed to be located at the point where the highest concentrations of TACs, and therefore, health risks are predicted to occur. Non - cancer risks — health risks such as eye watering, respiratory or heart ailments, and other non - cancer related diseases. Receptors — the locations where potential health impacts or risks are predicted (i.e., schools, residences, and recreational sites). LIMITATIONS AND UNCERTAINTIES There are a number of important limitations and uncertainties commonly associated with a HRA due to the wide variability of human exposures to TACs, the extended timeframes over which the exposures are evaluated and the inability to verify the results. Among these challenges are the following: • The HRA exposure estimates do not take into account that people do not usually reside at the same location for 70 years and that other exposures (i.e., school children) are also of much shorter durations than was assumed in this analysis. Therefore, the results of the HRA are highly overstated for those cases. • Other limitations and uncertainties associated with HRA and identified by the CalEPA include: (a.) lack of reliable monitoring data; (b.) extrapolation of toxicity data in animals to humans; (c.) estimation errors in calculating TACs emissions; (d.) concentration prediction errors with dispersion models; and (e.) the variability in lifestyles, fitness and other confounding factors of the human population. HAZARDS IDENTIFICATION Diesel exhaust is a complex mixture of numerous individual gaseous and particulate compounds emitted from diesel - fueled combustion engines. Diesel particulate matter (DPM) is formed primarily through the incomplete combustion of diesel fuel. DPM is removed from the 413 atmosphere through physical processes including atmospheric fall -out and washout by rain. Humans can be exposed to airborne DPM by deposition on water, soil, and vegetation; although the main pathway of exposure is inhalation. In August 1998, the California Air Resource Board (GARB) identified DPM as an air toxic. The CARB developed the Risk Reduction Plan to Reduce Particulate Matter Emissions from Diesel - Fueled Engines and Vehicles and Risk Management Guidance for the Permitting of New Stationary Diesel - Fueled Engines and approved these documents on September 28, 2000.34 The documents represent proposals to reduce DPM emissions, with the goal of reducing emissions and the associated health risk by 75 percent in 2010 and by 85 percent in 2020. The program aimed to require the use of state -of -the -art catalyzed DPM filters and ultra - low - sulfur diesel fuel. In 2001, CARB assessed the state -wide health risks from exposure to diesel exhaust and to other toxic air contaminants. It is difficult to distinguish the health risks of diesel emissions from those of other air toxics, since diesel exhaust contains approximately 40 different TACs. The CARB study detected diesel exhaust by using ambient air carbon soot measurements as a surrogate for diesel emissions. The study reported that the state -wide cancer risk from exposure to diesel exhaust was about 540 per million population as compared to a total risk for exposure to all ambient air toxics of 760 per million. This estimate, which accounts for about 70 percent of the total risk from TACs, included both urban and rural areas in the state. The estimate can also be considered an average worst -case for the state, since it assumes constant exposure to outdoor concentrations of diesel exhaust and does not account for expected lower concentrations indoors, where most of time is spent. EXPOSURE ASSESSMENT Dispersion is the process by which atmospheric pollutants disseminate due to wind and vertical stability. The results of a dispersion analysis are used to assess pollutant concentrations at or near an emission source. The results of an analysis allow predicted concentrations of pollutants to be compared directly to air quality standards and other criteria such as health risks based on modeled concentrations. Dispersion Modeling Approach This section presents the methodology used for the dispersion modeling analysis. This section addresses all of the fundamental components of an air dispersion modeling analysis including: • Model selection and options • Receptor locations • Meteorological data 3 California Air Resources Board. Risk Reduction Plan to Reduce Particulate Matter Emissions from Diesel - Fueled Engines and Vehicles. October 2000. http: / /www.arb.ca.gov /diesel /documents /rrpfinal.pdf 4 California Air Resources Board. Risk Management Guidance for the Permitting ofNew Stationary Diesel - Fueled Engines. October 2000. http: / /www.arb.ca.gov /diesel /documents /rmgfinal.pdf 414 • Source release characteristics Air dispersion modeling was performed to estimate the downwind dispersion of DPM exhaust emissions resulting from construction activities and rail operations. A description of the air quality modeling parameters, including air dispersion model selection, modeling domain, source exhaust parameters, meteorological data selection, and receptor network, is provided. Model Selection and Options AERMOD (Version 14134)5 was used for the dispersion analysis. AERMOD is the USEPA preferred atmospheric dispersion modeling system for general industrial sources. The model can simulate point, area, volume, and line sources. AERMOD is the appropriate model for this analysis based on the coverage of simple, intermediate, and complex terrain. It also predicts both short -term and long -term (annual) average concentrations. The model was executed using the regulatory default options (stack -tip downwash, buoyancy- induced dispersion, and final plume rise), default wind speed profile categories, default potential temperature gradients, and assuming no pollutant decay. The selection of the appropriate dispersion coefficients depends on the land use within three kilometers (km) of the Project site. The types of land use were based on the classification method defined by Auer (1978); using pertinent United States Geological Survey (USGS) 1:24,000 scale (7.5 minute) topographic maps of the area. If the Auer land use types of heavy industrial, light - to- moderate industrial, commercial, and compact residential account for 50 percent or more of the total area, the USEPA Guideline on Air Quality Models recommends using urban dispersion coefficients; otherwise, the appropriate rural coefficients can be used. Based on observation of the area surrounding the project site, rural (urban is only designated within dense city centers such as downtown San Francisco) dispersion coefficients were applied in the analysis. Receptor Locations Some receptors are considered more sensitive to air pollutants than others, because of preexisting health problems, proximity to the emissions source, or duration of exposure to air pollutants. Land uses such as primary and secondary schools, hospitals, and convalescent homes are considered to be relatively sensitive to poor air quality because the very young, the old, and the infirm are more susceptible to respiratory infections and other air quality- related health problems than the general public. Residential areas are also considered sensitive to poor air quality because people in residential areas are often at home for extended periods. Recreational land uses are moderately sensitive to air pollution because vigorous exercise associated with recreation places having a high demand on respiratory system function. Sensitive receptors such as residences, schools, and outdoor recreational areas near the Project were chosen as the receptors to be analyzed. The project property is generally bound by commercial and light industrial to the east, along Cypress Avenue and Airport Boulevard, and 5 US Environmental Protection Agency, AERMOD Modeling System, hlW: / /www.epa.gov /scram001 /dispersion prefrec.htm. 415 immediately south of the proposed project. Multifamily and single residential is located to the north, west, and south of the proposed project. These residential units tend to be one to three story structures. The nearest existing residential land uses are within 100 feet to the north and within adjacent properties to the west of the project site. No schools are located within 1,000 feet of the proposed project. Receptors were placed at a height of 1.8 meters (typical breathing height). Terrain elevations for receptor locations were used (i.e., complex terrain) based on available USGS information for the area. Figure B -1 displays the location of the sensitive receptors used in the HRA. Sensitive receptors were placed at existing residences and schools to estimate health impacts due to proposed project construction on existing receptors. Sensitive receptors were also placed at the proposed project to estimate health impacts on new residences from existing sources such as the CalTrains operations and Highway 101. Meteorological Data Air quality is a function of both the rate and location of pollutant emissions under the influence of meteorological conditions and topographic features affecting pollutant movement and dispersal. Atmospheric conditions such as wind speed, wind direction, atmospheric stability, and air temperature gradients interact with the physical features of the landscape to determine the movement and dispersal of air pollutants, and consequently affect air quality. Hourly meteorological data from San Francisco International Airport (surface data), located approximately 2.0 miles to the south of the Project, and Oakland International Airport (upper air) were used in the dispersion modeling analysis. Meteorological data from 2010 through 2014 were used. Exhibit B -2 displays the wind rose during this period. Wind directions are predominately from the west and northwest with a high frequency of calm and low wind conditions, as shown in Exhibit B -3. The regional average annual wind speed is 10.7 miles per hour. 416 r-I W 7 G.7 W a O H a w U W H Z W W Q x x x H a Q w x FIGURE B -2 418 FIGURE B -3 WIND SPEED DISTRIBUTION FOR SAN FRANCISCO INTERNATIONAL AIRPORT 419 Source Release Characteristics Construction equipment activities were treated as an area source. The release height of the off - road equipment exhaust was 3.05 meters. Haul trucks and employee trips were treated as a line source (i.e., volume sources placed at regular intervals) located along the access road. The haul trucks were assigned a release height of 3.05 meters and an initial vertical dimension of 4.15 meters, which accounts for dispersion from the movement of vehicles. Model parameters for volume sources include emission rate, release height, and plume width. Locomotive line haul activities for the CalTrains were simulated as volume sources with a release height of five meters, and a plume width of eight meters. Terrain elevations for emission source locations were used (i.e., complex terrain) based on available USGS DEM for the area. AERMAP (Version 11103 )6 was used to develop the terrain elevations, although the project site is generally flat. Temporal factors (Table B -1) are used to describe the relationship of activity levels in one period of time to another period of time (i.e., the relationship of the activity during one -hour to the activity during a 24 -hour period). The use of temporal factors gives the model the ability to more accurately reflect real world conditions. Table B -1: CalTrains Emission Source Temporal Distribution Hour Ending Weekday Weekend 1 0.10 0.10 2 0.00 0.00 3 0.00 0.00 4 0.00 0.00 5 0.00 0.00 6 0.30 0.00 7 0.50 0.00 8 1.00 0.00 9 1.00 0.20 10 0.70 0.20 11 0.30 0.20 12 0.20 0.30 13 0.20 0.30 14 0.20 0.20 15 0.30 0.20 16 0.40 0.20 17 0.60 0.20 18 1.00 0.20 19 1.00 0.40 20 0.60 0.20 21 0.30 0.20 22 0.20 0.20 23 0.20 0.20 24 0.10 0.10 SOURCE: CalTrains Schedule of Service, htt p:// www.caltraiii.com /scliedules/PDF Sc Railroad operations are typically described in terms of two different types of operation, line haul and switching. Line haul operations involve long - distance transportation along a route whereas 6 US Environmental Protection Agency, AERMAP, http:// www.ga.gov /ttn/scram/dispersion related. htm#aen- a . 420 switching is the local movement of railcars to prepare them for line haul transportation or to distribute them to destination terminals upon their arrival. Along the route near the project site, no switching operations were assumed. Published emissions information7 for line haul locomotive operations in both throttle notch and fuel consumption modes along with scheduled operational data was used to estimate emissions. Locomotives operate differently from other types of mobile sources with respect to how they transmit power from engine to wheels. While most mobile sources use a physical coupling such as a transmission to transfer power from the engine to the wheels, a locomotive's engine turns a generator or alternator powering an electric motor that, in turn, powers the locomotive's wheels. The physical connection of a typical mobile source means that the engine's speed is dictated by the vehicle's speed through a fixed set of gear ratios, resulting in the highly transient operating conditions (particularly engine speed and load) that characterize mobile source operations. In contrast, the locomotive's engine and drive system operate more independently, such that the engine can be operated at a particular speed without respect to the speed of the locomotive itself. This allows operation under more steady -state load and speed conditions, and as a result locomotives have been designed to operate in a series of discrete throttle settings called notches, ranging from notch positions one through eight, plus an idle position. Line haul locomotives are typically operated in groups of two to five units, with three or four units being most common, depending on the power requirements of the specific train being pulled and the horsepower capacities of available locomotives. Thus, two higher- horsepower locomotives may be able to pull a train that would take three units with lower power outputs. Locomotives operated in sets are connected such that every engine in the set is operated in unison by an engineer in one of the locomotives. Based on the CalTrains Schedule of Service, the air quality analysis included 76 daily rail (average per week) operations (northbound and southbound).$ An additional 20 rail operations were included to account for other rail operators such as Union Pacific and Amtrak. One line haul engine were assumed to operate for the CalTrains route. Emission estimates were estimated for the CalTrains activities. For locomotives, emissions were estimated as a function of power demand (expressed in horsepower- hours) multiplied by an emission factor (shown in Table B -2), expressed in terms of grams per horsepower -hour (g/hp- hour), and then applied to the various activity data (Table B -3). Estimate emission efficiency improvements were accounted for to determine the average exposure during a lifetime (Table B- 4). Of note, CalTrains is expected to replace diesel locomotives sometime after 2017. Thus, emission estimates are likely to be conservative by assuming diesel locomotive would operate throughout the period. 7 U.S. Environmental Protection Agency. Emission Factors for Locomotives. April 2009. 1-ittp:// www. epa. gov /nonroad /locomoty /420tO9025.pdf 8 CalTrains Schedule of Service, http: // www. caltrain. com /schedules/PDF ®Schedules.html 421 Table B -2: Emission Factors for Locomotives Haul Emission Factor Pollutant (g /hp -hour) PM10 0.18 PM2s 0.17 SOURCE: U.S. Environmental Protection Agency. Emission Factors for Locomotives, April 2009. Table B -3: Operational Assumptions for Locomotives Parameters Line Haul Load Factor 0.20 Horsepower 3,300 Daily Operations 96 SOURCE: CalTrains Schedule of Service, lit tp. Table B-4: PM10 Emission Factors for Locomotives by Year 422 Haul Emission Factor Year (g /gal) 2006 6.4 2007 6.3 2008 5.1 2009 4.9 2010 4.7 2011 4.4 2012 4.1 2013 3.8 2014 3.6 2015 3.4 2016 3.1 2017 2.9 2018 2.7 2019 2.5 2020 2.3 2021 2.2 2022 2.0 2023 1.9 2024 1.7 2025 1.6 2026 1.5 2027 1.4 2028 1.3 2029 1.1 2030 1.0 2031 1.0 2032 0.9 2033 0.8 2034 0.7 2035 0.7 2036 0.6 2037 0.6 422 2038 0.5 2039 0.5 2040 0.4 SOURCE: U.S. Environmental Protection Agency. Emission Factors for Locomotives, April 2009. Dispersion Modeling Results Using AERMOD, the maximum annual and 70 -year average annual concentrations were determined for DPM emissions for the emission sources of concern. These concentrations were estimated for a unit emission rate (1 gram per second) and adjusted based on the calculated emission rate. The HRA was conducted following methodologies in BAAQMD's Health Risk Screening Analysis Guidelines and OEHHA's Air Toxics Hot Spots Program Guidance10. This was accomplished by applying the highest estimated concentrations at the receptors analyzed to the established cancer risk estimates and acceptable reference concentrations (RfC) for non - cancer health effects. The toxicity values used in this analysis were based on OEHHA guidance. These toxicity values are for carcinogenic effects and acute /chronic health impacts. The primary pathway for exposures was assumed to be inhalation and carcinogenic and non - carcinogenic effects were evaluated separately. The incremental risks were determined for each emission source of TAC and summed to obtain an estimated total incremental carcinogenic health risk. The 801' percentile adult breathing rate of 302 liters per kilogram per day (L /kg -day) was used to determine cancer risks to residents from exposure to TAC. The residential exposure frequency and duration was assumed to be 350 days per year and 70 years. For children, OEHHA recommends assuming a breathing rate of 581 L /kg -day to assess potential risk via the inhalation exposure pathway. This value represents the upper 95th percentile of daily breathing rates for children. The modeled DPM concentrations were used to represent the exposure concentrations in the air. The inhalation absorption factor was assumed to be 1. Cancer risk estimates also incorporate age sensitivity factors (ASFs). This approach provides updated calculation procedures that factor in the increased susceptibility of infants and children to carcinogens as compared to adults. OEHHA recommends that cancer risks be weighted by a factor of 10 for exposures that occur from the third trimester of pregnancy to 2 years of age, and by a factor of 3 for exposures from 2 years through 15 years of age. For estimating cancer risks for residential receptors over a 70 year lifetime, the incorporation of the ASFs results in a cancer risk adjustment factor (CRAF) of 1.7. 9 Bay Area Air Quality Management District, 2005. BAAQMD Health Risk Screening Analysis Guidelines, June 2005, http: / /www.baacimd.gov /bmt/air txics /risk procedures policies /hrsa guidelines. pd . 10 Office of Environmental Health Hazard Assessment, 2003. Air Toxics Hot Spots Program Guidance Manual for Preparation ofHealth Risk Assessments, http: / /www.oehha.org/ air /hot spots /pdf/HRAgttidefinal.pdf. 423 For occupational receptors, BAAQMD guidance suggests that the exposure be based on 8 hours per day, 5 days per week, 245 working days per year, and a 40 -year working lifetime. This is a conservative assumption, since most people do not remain at the same job for 40 years. Based on OEHHA recommendations (see Table B -5), the cancer risk to residential receptors assumes exposure occurs 24 hours per day for 350 days per year. For children at school sites, exposure is assumed to occur 10 hours per day for 180 days (or 36 weeks) per year. Cancer risk to residential receptors based on a 70 -year lifetime exposure. Cancer risk estimates for children at school sites are calculated based on 9 year exposure duration. Table 13-5: Health Risk Assessment Exposure Parameters SOURCE: Bay Area Air Quality Management District, Health Risk Screening Analysis Guidelines, June 2005, httL): / /www.baagmd.gov /pmt /air toxics /risk procedures policies /hrsa guidelines.pdf. RISK CHARACTERIZATION Cancer risk is defined as the lifetime probability of developing cancer from exposure to carcinogenic substances. Cancer risks are expressed as the chance in one million of getting cancer (i.e., number of cancer cases among one million people exposed). The cancer risks are assumed to occur exclusively through the inhalation pathway. The cancer risk can be estimated by using the cancer potency factor (milligrams per kilogram of body weight per day [mg/kg- day]), the 70 -year annual average concentration (microgram per cubic meter [[tg/m3]), and the lifetime exposure adjustment. Following guidelines established by OEHHA, the incremental cancer risks attributable to the Project were calculated by applying exposure parameters to modeled DPM concentrations in order to determine the inhalation dose (mg/kg -day) or the amount of pollutants inhaled per body weight mass per day. The cancer risks occur exclusively through the inhalation pathway; therefore, the cancer risks can be estimated from the following equation: Where: Dose -inh = Cair * {DBR} * A * CRAF * EF * ED * 10 -6 AT Dose -inh = Dose of the toxic substance through inhalation in mg/kg -day 10 -6 = Micrograms to milligrams conversion, Liters to cubic meters conversion Cair = Concentration in air in microgram (µg) /cubic meter (m3) {DBR} = Daily breathing rate in liter (L) /kg body weight — day 424 Cancer Risk Breathing Adjustment Daily Annual Exposure Receptor Rate (DBR) Factor (CRAF) Exposure Exposure Duration (ED) Adult 302 1.7 24 hours 350 days 70 years Child 581 10 24 hours 350 days 3 years School 581 3 10 hours 180 days 9 years SOURCE: Bay Area Air Quality Management District, Health Risk Screening Analysis Guidelines, June 2005, httL): / /www.baagmd.gov /pmt /air toxics /risk procedures policies /hrsa guidelines.pdf. RISK CHARACTERIZATION Cancer risk is defined as the lifetime probability of developing cancer from exposure to carcinogenic substances. Cancer risks are expressed as the chance in one million of getting cancer (i.e., number of cancer cases among one million people exposed). The cancer risks are assumed to occur exclusively through the inhalation pathway. The cancer risk can be estimated by using the cancer potency factor (milligrams per kilogram of body weight per day [mg/kg- day]), the 70 -year annual average concentration (microgram per cubic meter [[tg/m3]), and the lifetime exposure adjustment. Following guidelines established by OEHHA, the incremental cancer risks attributable to the Project were calculated by applying exposure parameters to modeled DPM concentrations in order to determine the inhalation dose (mg/kg -day) or the amount of pollutants inhaled per body weight mass per day. The cancer risks occur exclusively through the inhalation pathway; therefore, the cancer risks can be estimated from the following equation: Where: Dose -inh = Cair * {DBR} * A * CRAF * EF * ED * 10 -6 AT Dose -inh = Dose of the toxic substance through inhalation in mg/kg -day 10 -6 = Micrograms to milligrams conversion, Liters to cubic meters conversion Cair = Concentration in air in microgram (µg) /cubic meter (m3) {DBR} = Daily breathing rate in liter (L) /kg body weight — day 424 A = Inhalation absorption factor CRAF = Cancer Risk Adjustment Factor, Age Sensitivity Factor EF = Exposure frequency (days /year) ED = Exposure duration (years) AT = Averaging time period over which exposure is averaged in days (25,550 days for a 70 year cancer risk) To determine incremental cancer risk, the estimated inhalation dose attributed to the Project was multiplied by the cancer potency slope factor (cancer risk per mg/kg -day). The cancer potency slope factor is the upper bound on the increased cancer risk from a lifetime exposure to a pollutant. These slope factors are based on epidemiological studies and are different values for different pollutants. This allows the estimated inhalation dose to be equated to a cancer risk. Non - cancer adverse health impacts, acute (short -term) and chronic (long - term), are measured against a hazard index (HI), which is defined as the ratio of the predicted incremental exposure concentration from the Project to a published reference exposure level (REL) that could cause adverse health effects as established by OEHHA. The ratio (referred to as the Hazard Quotient [HQ]) of each non - carcinogenic substance that affects a certain organ system is added to produce an overall HI for that organ system. The overall HI is calculated for each organ system. If the overall HI for the highest- impacted organ system is greater than one, then the impact is considered to be significant. The HI is an expression used for the potential for non - cancer health effects. The relationship for the non - cancer health effects is given by the annual concentration (in µg /m3) and the REL (in µg/m3). The acute hazard index was determined using the "simple" concurrent maximum approach, which tends to be conservative (i.e., overpredicts). The relationship for the non - cancer health effects is given by the following equation: Where: HI = C /REL HI = Hazard index; an expression of the potential for non - cancer health effects. C = Annual average concentration (µg /m3) during the 70 year exposure period. REL = Concentration at which no adverse health effects are anticipated. The chronic REL for DPM was established by the California OEHHAii as 5 µg /m3. There is no acute REL for DPM. However, diesel exhaust does contain acrolein and other compounds, which do have an acute REL. BAAQMD's DPM speciation table (based on profile 4674 within the USEPA Speciate 4.2) 12 was used to assess the acute impacts. Acrolein emissions are California Office of Environmental Health Hazards Assessment Toxicity Criteria Database, 2010, hlW://www.oehha.cL.gov//. 12 Provides for a speciation faction of 1.3 percent of acrolein per DPM emission rate, http: / /www.ga.gov / / / /.html. 425 approximately 1.3 percent of the total emissions. The acute REL for acrolein was established by the California OEHHA13 as 2.5 µg /m3. CUMULATIVE SOURCES The BAAQMD's CEQA Air Quality Guidelines include standards and methods for determining the significance of cumulative health risk impacts.14 The method for determining cumulative health risk requires the tallying of health risk from permitted sources and major roadways in the vicinity of a project (i.e., within a 1,000 -foot radius of the location of the new project - related receptors), then adding the Project impacts to determine whether the cumulative health risk thresholds are exceeded. BAAQMD has developed a geo- referenced database of permitted emissions sources throughout the San Francisco Bay Area, and has developed the Stationary Source Risk & Hazard Analysis Tool for estimating cumulative health risks from permitted sources. Eleven permitted sources are located within 1,000 feet of the Project impact area. Table B -6 provides the estimated screening cancer risk, hazard impacts, and the PM2.5 concentrations for the cumulative permitted source in association with existing receptors. Table B -7 provides the estimated screening cancer risk, hazard impacts, and the PM2.5 concentrations for the cumulative permitted source in association with proposed receptors. 13 California Office of Environmental Health Hazards Assessment Toxicity Criteria Database, 2010, hlW://www.oehha.cL.gov//. 14 Bay Area Air Quality Management District. CEQA Air Quality Guidelines. May 2012. hlW: / /www.baagmd.gov /—/ media / Files / Planning% 20and% 2OResearch /CEQABAAQMD %2OCEQA %2OGuidelines Final May %202012.ashx ?la =en 426 Table 13-6: Cumulative Health Impacts for Existing Receptors — Permitted Sources Facility Adjustment Cancer Hazard PM2.5 # Facility Type Address Factor Risk Impact Concentration Unocal 41026 Grand G9214 Martco 221 Airport Blvd 0.126 1.85 <0.01 - 15132 NOD Auto Body Shop 296 Baden Ave - No risk/concentration. No further study needed. Replaced equipment with Petroleum machine. No 4316 Wright Cleaners 316 Grand Ave - risk or concentration. G10695 South City Shell 123 Linden Ave 0.036 0.44 <0.01 - First Class Pupa's Auto 16311 Body Shop 136 Linden Ave - No risk/concentration. No further study needed. G11137 Chino's Service Station 401 Linden Ave 0.028 0.16 <0.01 - E&S Ahuactzin Auto 16753 Body Shop 303 Commercial Ave - No risk/concentration. No further study needed. Carrera Auto Body/Tai 11618 Shing Auto Body 99 Linden Ave - No risk/concentration. No further study needed. 15764 Autobahn Specialties 33 Linden Ave - No risk/concentration. No further study needed. Facility closed September of 2010. No 14612 Central Cleaners 386 Grand Ave - risk/concentration. 16678 Harbor Auto Body 512 Cypress Ave - No risk/concentration. No further study needed. SOURCE: Email from Alison Kirk at BAAQMD on April 15, 2015 - 255 Cypress Avenue Stationary Source Inquiry Form. Table 13-7: Cumulative Health Impacts for Proposed Receptors — Permitted Sources Facility Adjustment Cancer Hazard PM2.5 # Facility Type Address Factor Risk Impact Concentration Unocal 41026 Grand G9214 Martco 221 Airport Blvd 0.65 5.37 <0.01 - 15132 NOD Auto Body Shop 296 Baden Ave - No risk/concentration. No further study needed. Replaced equipment with Petroleum machine. No 4316 Wright Cleaners 316 Grand Ave - risk or concentration. G10695 South City Shell 123 Linden Ave 0.045 0.55 <0.01 - First Class Pupa's Auto 16311 Body Shop 136 Linden Ave - No risk/concentration. No further study needed. G11137 Chino's Service Station 401 Linden Ave 0.0335 0.19 <0.01 - E&S Ahuactzin Auto 16753 Body Shop 303 Commercial Ave - No risk/concentration. No further study needed. Carrera Auto Body/Tai 11618 Shing Auto Body 99 Linden Ave - No risk/concentration. No further study needed. 15764 Autobahn Specialties 33 Linden Ave - No risk/concentration. No further study needed. Facility closed September of 2010. No 14612 Central Cleaners 386 Grand Ave - risk/concentration. 16678 Harbor Auto Body 512 Cypress Ave - No risk/concentration. No further study needed. SOURCE: Email from Alison Kirk at BAAQMD on April 15, 2015 - 255 Cypress Avenue Stationary Source Inquiry Form. Information (cancer risks and chronic index) was adjusted for distance from source to receptor, based on BAAQMD's Distance Adjustment Multiplier for Gas Station. BAAQMD has also developed a geo- referenced database of roadways throughout the San Francisco Bay Area and 427 has developed the Highway Screening Analysis Tool for estimating cumulative health risks from roadways. US 101 is located 465 feet to the east of the Project site (new residences) and is located 535 feet from existing residences. Table B -8 display the health impacts from US 101 at a height of 6 feet above ground; representing ground floor occupants. Table B -9 display the health impacts from US 101 at a height of 20 feet above ground; representing above ground floor occupants. As shown, the health impacts from US 101 decrease the higher above the ground floor of the Project. BAAQMD CEQA Air Quality Guidelines also require the inclusion of surface streets within 1,000 feet of the Project with annual average daily traffic of 10,000 or greater. 15 Upon review of nearby roadways, Grand Avenue, Linden Avenue, and Airport Boulevard meets the criteria. Table 13-8: US 101 Health Impacts at 6 Feet Above Ground Distance from Nearest Travel Lane Cancer Chronic Acute PM2.5 (feet) Risk Impact Impact Concentration 10 42.9 0.042 0.039 0.385 25 35.8 0.035 0.034 0.321 50 28.4 0.027 0.028 0.255 75 23.8 0.023 0.024 0.214 100 20.7 0.020 0.021 0.185 200 13.9 0.013 0.014 0.124 300 10.8 0.010 0.011 0.096 400 8.86 0.008 0.009 0.079 500 7.60 0.007 0.008 0.068 750 5.74 0.005 0.006 0.051 1000 4.64 0.004 0.005 0.041 SOURCE: BAAQMD Highway Screening Analysis Tool, May 2011. 15 Bay Area Air Quality Management District County Surface Street Screening Tables, May 2011 and C E H T P Traffic Linkage Service Demonstration, hlW: / /www.ehib.org/traffic tooljsp. MW Table B -9: US 101 Health Impacts at 20 Feet Above Ground Distance from Nearest Travel Lane Cancer Chronic Acute PM2.5 (feet) Risk Impact Impact Concentration 10 24.4 0.023 0.032 0.218 25 23.4 0.022 0.029 0.209 50 21.4 0.021 0.025 0.192 75 19.4 0.019 0.022 0.174 100 17.7 0.017 0.019 0.158 200 12.9 0.012 0.013 0.116 300 10.3 0.010 0.010 0.092 400 8.58 0.008 0.009 0.077 500 7.42 0.007 0.008 0.066 750 5.65 0.005 0.006 0.050 1000 4.59 0.004 0.005 0.041 SOURCE: BAAQMD Highway Screening Analysis Tool, May 2011. 429 Attachment 8.b 418 Linden Avenue Air Quality Analysis and Health Risk Assessment, dated May 5, 2015 430 488 Linden Avenue Air Quality Analysis and Health Risk Assessment Brookwood Equities LLC Two Embarcadero Center Suite 2910 San Francisco, CA 94111 Prepared by: RCH Group 11060 White Rock Road Rancho Cordova, California 95670 2,;''; ............ ..... . May 5, 2015 431 TABLE OF CONTENTS 488 Linden Avenue Air Quality Analysis and Health Risk Assessment Section 1. Introduction Section 2. Project Overview Section 3. Analysis Methodologies Section 4. Existing Conditions Section 5. Impact Analysis and Mitigation Section 6. References Table 1 — Air Quality Data Summary (2012 - 2014) 5 Table 2 — BAAQMD Air Quality Significance Thresholds 9 Table 3 — Estimated Project Construction Schedule 11 Table 4 — Estimated Project Construction Equipment Usage 11 Table 5 — Construction Trips and Trip Lengths 12 Table 6 — Estimated Daily Construction Emissions (pounds) 13 Table 7 — Estimated Daily Project Operational Emissions (pounds) 17 Table 8 — Estimated Annual Project Operational Emissions (tons) 17 Table 9 — Estimated Health Impacts for Existing Receptors 24 Table 10 — Estimated Health Impacts for Proposed Receptors 26 ATTACHMENTS A - Construction and Operational Emission Calculations B - Health Risk Assessment 432 Page 1 1 1 3 7 27 1.0 INTRODUCTION This document provides an overview of the existing air quality conditions at the proposed project site, the air quality regulatory framework, an analysis of potential air quality impacts that would result from implementation of the proposed project, and identification of applicable mitigation measures. Other issues related to air emissions covered in this document include the assessment of emissions related to air quality health impacts (health risk assessment or HRA). The supporting methodology and assumptions used in the air quality analysis are provided in Attachment A: Emission Calculation Output Files and Attachment B: Health Risk Assessment. 2.0 PROJECT OVERVIEW The proposed project would be located at 488 Linden Avenue in South San Francisco.' The proposed project includes the development of 38 residential units with a total of 45,368 square feet of enclosed space and 47 parking spaces, built on 0.32 acres (14,000 square feet) of land, with 109 residents. The CalTrain South San Francisco station is located approximately 0.25 miles to the east. The project site is currently a surface parking lot with related equipment and signage. 3.0 ANALYSIS METHODOLGY Intermittent (short -term construction emissions that occur from activities, such as removal of structures, site - grading, and building construction) and long -term air quality impacts related to the operation of the proposed project were evaluated. The analysis focuses on daily and annual emissions from these construction and operational (mobile, area, stationary, and fugitive sources) activities. This air quality analysis is consistent with the methods described in the Bay Area Air Quality Management District (BAAQMD) CEQA Air Quality Guidelines (dated June 2010, updated in May 2011, and revised in May 2012). Mitigation measures are presented to reduce impacts to less than significant. The air quality analysis includes a review of criteria pollutant emissions such as carbon monoxide (CO)4, nitrogen oxides (NO,), sulfur dioxide (S02), volatile organic compounds ' Current Address: 418 Linden Avenue, South San Francisco 2 The BAAQMD's June 2010 adopted thresholds of significance were challenged in a lawsuit. Although the BAAQMD's adoption of significance thresholds for air quality analysis has been subject to judicial actions, the lead agency has determined that BAAQMD's Revised Draft Options and Justification Report (October 2009) provide substantial evidence to support the BAAQMD recommended thresholds. Therefore, the lead agency has determined the BAAQMD recommended thresholds are appropriate for use in this analysis. 3 Criteria air pollutants refer to those air pollutants for which the United States Environmental Protection Agency (USEPA) and California Air Resources Board (CARB) has established National Ambient Air Quality Standards (NAAQS) and California Ambient Air Quality Standards (CAAQS) under the Federal Clean Air Act (CAA). 433 (VOC) as reactive organic gases (ROG)5, particulate matter less than 10 micrometers or less (coarse or PM10), particulate matter less than 2.5 micrometers or less (fine or PM2.5 ).6 The HRA addresses diesel particulate matter (DPM) emissions from on -site construction equipment and haul trucks and cumulative impacts from nearby permitted stationary sources, CalTrain operations, nearby roadways, and Highway 101. Regulatory models used to estimate air quality impacts include: • California Air Resources Board's (CARB) EMFAC201 17 emissions inventory model. EMFAC2011 is the latest emission inventory model that calculates emission inventories and emission rates for motor vehicles operating on roads in California. This model reflects CARB's current understanding of how vehicles travel and how much they emit. EMFAC2011 can be used to show how California motor vehicle emissions have changed over time and are projected to change in the future. • CARB OFFROAD2011 s emissions inventory model. OFFROAD2011 is the latest emission inventory model that calculates emission inventories and emission rates for off - road equipment such as loaders, excavators, and off -road haul trucks operating in California. This model reflects CARB's current understanding of how equipment operates and how much they emit. OFFROAD2011 can be used to show how California off -road equipment emissions have changed over time and are projected to change in the future. • CalEEMod (California Emissions Estimator Model Version 2013.2.2)9 land use emissions model estimates construction emissions due to demolition and construction activities and operations. • AERMOD (American Meteorological Society /USEPA Regulatory Model) is an atmospheric dispersion model which can simulate point, area, volume, and line emissions sources and has the capability to include simple, intermediate, and complex terrain along 4 CO is a non — reactive pollutant that is a product of incomplete combustion of organic material, and is mostly associated with motor vehicle traffic, and in wintertime, with wood — burning stoves and fireplaces. 5 VOC means any compound of carbon, excluding carbon monoxide, carbon dioxide, carbonic acid, metallic carbides or carbonates, and ammonium carbonate, which participates in atmospheric photochemical reactions and thus, a precursor of ozone formation. ROGs are any reactive compounds of carbon, excluding methane, CO, CO2 carbonic acid, metallic carbides or carbonates, ammonium carbonate, and other exempt compounds. The terms VOC and ROG are often used interchangeably. 6 PM10 and PM2.5 consists of airborne particles that measure 10 micrometers or less in diameter and 2.5 micrometers or less in diameter, respectively. PM10 and PM2.5 represent fractions of total particulate matter that can be inhaled into the air passages and the lungs, causing adverse health effects. CARB EMFAC2011 User's Guide, December 20, 2012, hlW://www.arb.ca.gov/msei/modeling.htm 8 CARB OFFROAD2011 Instructions, http: / /www.arb.ca. og v /msproLordiesel /info 1085 /oei write up.pdf 9 California Emissions Estimator Model User's Guide, July 2013. http: / /www.caleemod.com/ 434 with meteorological conditions and multiple receptor locations.10,ii AERMOD is commonly executed to yield 1 -hour maximum and annual average concentrations (in µg/m3) at each receptor. 4.0 EXISTING CONDITIONS The project site is located within the San Francisco Bay Area Air Basin (Air Basin), which encompasses Alameda, Contra Costa, Santa Clara, San Francisco, San Mateo, Marin, and Napa Counties, and the southern portions of Solano and Sonoma Counties. The Air Basin is characterized by complex terrain which distorts normal wind flow patterns, consisting of coastal mountain ranges, inland valleys, and bays. Regional Meteorology Air quality is affected by the rate, amount, and location of pollutant emissions and the associated meteorological conditions that influence pollutant movement and dispersal. Atmospheric conditions, including wind speed, wind direction, stability, and air temperature, in combination with local surface topography (i.e., geographic features such as mountains, valleys, and San Francisco Bay), determine the effect of air pollutant emissions on local air quality. The climate of the greater San Francisco Bay Area, including San Mateo County, is a Mediterranean -type climate characterized by warm, dry summers and mild, wet winters. The climate is determined largely by a high- pressure system that is often present over the eastern Pacific Ocean. In winter, the Pacific high - pressure system shifts southward, allowing storms to pass through the region. During summer and fall, air emissions generated within the Bay Area can combine with abundant sunshine under the restraining influences of topography and subsidence inversions to create conditions that are conducive to the formation of photochemical pollutants, such as ozone and secondary particulates, such as sulfates and nitrates. The peninsula region of the Bay Area Air Basin (Bay Area) extends from the area northwest of San Jose to the Golden Gate. The Santa Cruz Mountains extend up the center of the peninsula, with elevations exceeding 2,000 feet at the south end, and gradually decreasing to an elevation of 500 feet in South San Francisco, where it terminates. San Francisco is at the north end of the peninsula and because most of the topography of San Francisco is less than 200 feet, the marine layer is able to flow across most of the city, making its climate relatively cool and windy. 12 However, the area of South San Francisco and San Francisco International Airport (SFO) " USEPA Preferred /Recommended Models, AERMOD Modeling System, h!W: / /www.epa.gov /ttn/ scram /dispersion prefrec.htm#aermod. " Title 40 CFR Part 51, Revision to the Guideline on Air Quality Models: Adoption of a Preferred General Purpose (Flat and Complex Terrain) Dispersion Model and Other Revisions; Final Rule, hlW://www.epa.gov/ttn/scraiii/gliidance/gLiide/qppw 05.pdf. 12 Bay Area Air Quality Management District. October 4, 2010, Bay Area Climatology — Peninsula h1W: / /www.baagmd.gov/ Divisions / Communications - and - Outreach / Air - Quality -in- the- Bay- Area/Bay -Area- Climatolo , /g Sy ibregions/Penins Lila. aspx. 435 experience lower winds and a greater frequency of calm winds (approximately 13 percent of the year), especially during the nighttime and cooler season, due to sheltering effect of terrain to the west. Meteorological data collected at the SFO, which is approximately two miles south of the project site, are representative of general project conditions. Average maximum and minimum winter (i.e., January) temperatures at SFO are 56 and 42 Fahrenheit ( °F), respectively, while average summer (i.e., July) maximum and minimum temperatures are 72 and 54 °F, respectively. Precipitation at SFO averages approximately 20 inches per year. 13 Annual average wind speeds range from five to 10 miles per hour (mph) throughout the peninsula. The east side of the mountains has a westerly wind pattern; however, it is influenced by local topographic features. That is, a few hundred feet rise in elevation will induce flow around that feature instead of over it during stable atmospheric conditions. This can change the wind pattern by as much as 90 °F over short distances. On mornings without a strong pressure gradient, areas on the east side of the peninsula often experience eastern flow in the surface layer, induced by upslope flow on the east - facing slopes and by the bay breeze. The bay breeze is rarely seen in the afternoon because the stronger sea breeze dominates the flow pattern. 14 Local Air Quality The BAAQMD maintains a network of monitoring stations within the Air Basin that monitor air quality and compliance with applicable ambient standards. The monitoring station closest to the project site is in San Francisco, approximately 7.5 miles to the north of the project site; where levels of ozone (03), PM10, PM2.5, CO, NO2, and S02 are recorded. Table 1 summarizes the most recent three years of data (2012 through 2014) from the San Francisco air monitoring station at 10 Arkansas Street. The State 24 -hour PM10 standard and federal 24 -hour PM2.5 standard were each exceeded once in 2012. The federal 1 -hour NO2 standard was exceeded once in 2012. The federal 24 -hour PM2.5 standard was exceeded twice in 2013. No exceedances of the air quality standards occurred during 2014. No other State or federal air quality standards were exceeded during the three year period. The Bay Area is considered a nonattainment area for ground -level ozone and fine particulate matter (PM2.5) under both the Federal Clean Air Act and the California Clean Air Act. The area is also considered nonattainment for respirable particulates (PM10) under the California Clean Air Act, but not the Federal Clean Air Act. The area has attained both State and National " Western Regional Climate Center, Local Climate Data Summaries for San Francisco International Airport, California. 1-ittp:// www. wrcc. dri .edu /cgi- bin /clilcd.pl ?ca23234. 14 Bay Area Air Quality Management District. October 4, 2010, Bay Area Climatology — Peninsula http:// www. baagmd. gov / Divisions / Communications - and - Outreach / Air - Quality -in- the- Bay- Area/Bay -Area- Climatolo , /g Sy ibregions/Penins Lila. aspx. 436 Ambient Air Quality Standards for CO, S02, and NO2. As part of an effort to attain and maintain ambient air quality standards for ozone and particulate matter, the BAAQMD has established thresholds of significance for these air pollutants and their precursors. These thresholds are for ozone precursor pollutants (ROG and NO,), PM10 and PM2.5, and apply to both construction period and operational period impacts. Table 1: Air Quality Data Summary (2012 - 2014) Source: USEPA (hip. / /www.epagov /air /data) CARE Air Quality Data Statistics ( http.// www .arb.ca.gov /adamhvelcome.html, 2012 -2014. The BAAQMD's Community Air Risk Evaluation (CARE) program was initiated in 2004 to evaluate and reduce health risks associated with exposure to outdoor air toxics (TACs) in the Bay Area. Based on findings of the latest report, DPM was found to account for approximately 85 percent of the cancer risk from airborne toxics. Carcinogenic compounds from gasoline - powered cars and light duty trucks were also identified as significant contributors: 1,3- butadiene contributed four percent of the cancer risk - weighted emissions, and benzene contributed three percent. Collectively, five compounds—diesel PM, 1,3- butadiene, benzene, formaldehyde, and acetaldehyde —were found to be responsible for more than 90 percent of the cancer risk attributed to emissions. All of these compounds are associated with emissions from internal 437 combustion engines. The most important sources of cancer risk - weighted emissions were combustion - related sources of DPM, including on -road mobile sources (31 percent), construction equipment (29 percent), and ships and harbor craft (13 percent). A 75 percent reduction in DPM was predicted between 2005 and 2015 when the inventory accounted for CARB's diesel regulations. Overall, cancer risk from TAC dropped by more than 50 percent between 2005 and 2015, when emissions inputs accounted for state diesel regulations and other reductions. 15 Modeled cancer risks from TAC in 2005 were highest near sources of DPM: near core urban areas, along major roadways and freeways, and near maritime shipping terminals. Peak modeled risks were found to be located east of San Francisco, near West Oakland, and the maritime Port of Oakland. BAAQMD has identified seven impacted communities in the Bay Area: • Western Contra Costa County and the cities of Richmond and San Pablo. • Western Alameda County along the Interstate 880 corridor and the cities of Berkeley, Alameda, Oakland, and Hayward. • San Jose. • Eastern side of San Francisco. • Concord. • Vallejo. • Pittsburgh and Antioch. The proposed project is within the city of South San Francisco, which is not part of the seven CARE program impacted communities in the Bay Area. The health impacts in the Bay Area, as determined both by pollution levels and by existing health vulnerabilities in a community, is approximately 160 cancer risk per million persons, while in South San Francisco, the health impacts is approximately 110 cancer risk per million persons. 16 Nearby Sensitive Receptors Land uses such as schools, children's daycare centers, hospitals, and convalescent homes are considered to be more sensitive than the general public to poor air quality because the population groups associated with these uses have increased susceptibility to respiratory distress. Persons engaged in strenuous work or exercise also have increased sensitivity to poor air quality. The CARB has identified the following people as most likely to be affected by air pollution: children EM less than 14 years of age, the elderly over 65 years of age, athletes, and those with cardiovascular and chronic respiratory diseases. These groups are classified as sensitive population groups. Residential areas are considered more sensitive to air quality conditions than commercial and industrial areas, because people generally spend longer periods of time at their residences, resulting in greater exposure to ambient air quality conditions. Recreational uses are also considered sensitive, due to the greater exposure to ambient air quality conditions and because the presence of pollution detracts from the recreational experience. According to the BAAQMD, workers are not considered sensitive receptors because all employers must follow regulations set forth by the Occupation Safety and Health Administration to ensure the health and well -being of their employees. BAAQMD considers the relevant zone of influence for an assessment of air quality health risks to be within 1,000 feet of a project site. The project property is generally bound by commercial land uses to the north, south, east and, west. Commercial and light industrial exists further east, along Cypress Avenue and Airport Boulevard. West of the project site along Linden Avenue is predominately commercial. Multifamily and single family residential is located to the north, east, and west of the proposed project. These residential units tend to be one to three story structures. The nearest existing residential land uses are within 100 feet to the east of the project site. No schools are located within 1,000 feet of the proposed project. 5.0 IMPACT ANALYSIS AND MITIGATION The air quality analysis includes a review of pollutant emissions such as CO, NO,, S02, VOC as ROG, PM10, and PM2.5. The HRA addresses the DPM emissions from on -site construction equipment and haul trucks associated with the proposed project and cumulative impacts from nearby permitted sources, CalTrain (located to the east), nearby roadways, and Highway 101 (located to the east). Threshold of Significance The significance of potential impacts was determined based on State CEQA Guidelines, Appendix G, and the BAAQMD CEQA Air Quality Guidelines. Using Appendix G evaluation thresholds, the proposed project would be considered to have significant air quality impacts if it were to: A. Conflict with or obstruct implementation of the applicable air quality plan; B. Violate any air quality standard or contribute substantially to an existing or projected air quality violation; C. Expose sensitive receptors to substantial pollutant concentrations; D. Create objectionable odors affecting a substantial number of people; or 439 E. Result in a cumulatively considerable net increase of any nonattainment pollutant, and /or health impacts (including releasing emissions that exceed quantitative thresholds for ozone precursors). The air quality analysis follows the methodology presented in the recent CEQA Guidelines released by the BAAQMD in May 2012. However, since the May 2012 CEQA Air Quality Guidelines do not provide specific significance thresholds, the thresholds and methodologies from the BAAQMD's 2011 CEQA Air Quality Guidelines were used to evaluate the potential impacts of construction and operation of the proposed project. The thresholds of significance applied to assess project -level air quality impacts are: • Average daily construction exhaust emissions of 54 pounds per day of ROG, NOX, or PM2.5 or 82 pounds per day of PM 10; • Average daily operation emissions of 54 pounds per day of ROG, NOX, or PM2.5 or 82 pounds per day of PM 10; or result in maximum annual emissions of 10 tons per year of ROG, NOX, or PM2.5 or 15 tons per year of PM 10; • Exposure of persons by siting a new source or a new sensitive receptor to substantial levels of TACs resulting in (a) a cancer risk level greater than 10 in one million, (b) a noncancerous risk (chronic or acute) hazard index greater than 1.0, or (c) an increase of annual average PM2.5 of greater than 0.3 micrograms per cubic meter (µg/m3). For this threshold, sensitive receptors include residential uses, schools, parks, daycare centers, nursing homes, and medical centers; or • Frequently and for a substantial duration, create or expose sensitive receptors to substantial objectionable odors affecting a substantial number of people. Assessment of a significant cumulative impact if it would result in: • Exposure of persons, by siting a new source or a new sensitive receptor, to substantial levels of TACs during either construction or operation resulting in (a) a cancer risk level greater than 100 in a million, (b) a noncancer risk (chronic or acute) hazard index greater than 10.0, or (c) annual average PM2.5 of greater than 0.8 µg/m3. The BAAQMD air quality significance thresholds are found in Table 2. ..K Table 2: BAAQMD Air Quality Significance Thresholds Illgll 111111 �,qn�u uuii�iipiuu�iuuu�u��nr�a� ttiYu uuu ° °iiii ,,;�� �u a �ii� uuu NH Nprynnqncp�lu� "'ail �°�'"�,uuu�HUU�q��,�i� �ii� �uu NH Nprynnqncp�lu� ,;, " Criteria Air Pollutants ROG 54 54 10 NOX 54 54 10 , PM 10 82 82 15 PM2.5 54 54 10 CO NA 9.0 ppm (8 -hour) and 20.0 ppm (1 -hour) Fugitive Dust Best Management NA Practices Project Health Risk and Hazards Excess Cancer Risk 10 per million 10 per million Chronic Hazard Index 1.0 1.0 Acute Hazard Index 1.0 1.0 Incremental Annual Average PM2.5 0.3 µg /m3 0.3 µg /m3 Cumulative Health Risk and Hazards Excess Cancer Risk 100 per million 100 per million Chronic Hazard Index 10.0 10.0 Acute Hazard Index 10.0 10.0 Incremental Annual Average PM2.5 0.8 µg/m3 0.8 µg/m3 SOURCE: BAAQMD Adopted Air Quality CEQA Thresholds of Significance - June 2, 2010, hlW: / /www.baagmd.gov /—/ media / Files / Planning %20and %2OResearch /CEQA /Summary Table Proposed BAAQM D CEQA Thresholds May ®3 2010.ashx ?la =en IMPACT AQ -1: Would the proposed project conflict with or obstruct implementation of the applicable air quality plan? Less - than - Significant Impact The BAAQMD adopted its 2010 Bay Area Clean Air Plan (CAP) in accordance with the requirements of the California Clean Air Act (CCAA) to implement all feasible measures to reduce ozone; provide a control strategy to reduce ozone, particulate matter, air toxics, and GHG emissions in a single, integrated plan; and establish emission control measures to be adopted or implemented in the 2010 through 2012 timeframe.17 The primary goals of the 2010 Bay Area CAP are to: • Attain air quality standards; • Reduce population exposure and protecting public health in the Bay Area; and • Reduce GHG emissions and protect the climate. 17 In 2015, the BAAQMD initiated an update to the 2010 Bay Area Clean Air Plan. On February 28, 2014, the District held a public meeting to report progress on implementing the control measures in the 2010 Clean Air Plan, to solicit ideas and strategies to further reduce ozone precursors, particulate matter, toxic air contaminants, and greenhouse gases, and to seek input on innovative strategies to reduce greenhouse gases, mechanisms for tracking progress in reducing GHG's, and how the BAAQMD may further support actions to reduce GHGs. The culmination of this effort will be an updated Clean Air Plan. 441 BAAQMD recommends that approving a project where an air quality plan consistency determination is required to analyze the project with respect to the following questions: (1) Does the project support the primary goals of the air quality plan; (2) Does the project include applicable control measures from the air quality plan; and (3) Does the project disrupt or hinder implementation of any 2010 CAP control measures? If the first two questions are concluded in the affirmative and the third question concluded in the negative, the BAAQMD considers the project consistent with air quality plans prepared for the Bay Area. Any project that would not support the 2010 CAP goals would not be considered consistent with the 2010 CAP. The recommended measure for determining project support of these goals is consistency with BAAQMD CEQA thresholds of significance. As presented in the subsequent impact discussions, the proposed project with mitigations would not exceed the BAAQMD significance thresholds; therefore, the proposed project with mitigations would support the primary goals of the 2010 CAP. As mentioned, projects that incorporate all feasible control measures in the air quality plan are considered consistent with the 2010 CAP. The proposed project would support the primary goals of the 2010 CAP, it would be consistent with all applicable 2010 CAP control measures, and would not disrupt or hinder implementation of any 2010 CAP control measures. Therefore, there would be a less- than - significant impact associated with, conflicting with, or obstructing implementation of the applicable air quality plan. The recommended measure for determining project support of these goals is consistency with BAAQMD- approved CEQA thresholds of significance. Therefore, if approval of a project would not result in significant and unavoidable air quality impacts after the application of all feasible mitigation, the proposed project would be considered consistent with the 2010 Bay Area CAP. The proposed project would result in a less- than - significant impact based on the construction and operational emission estimates and the entirety of this analysis directly. Therefore, as defined by the BAAQMD's significance criteria, the proposed project would be consistent with the 2010 Bay Area CAP, and thus, the impact would be less than significant. IMPACT AQ -2: Would proposed project construction activities conflict with or obstruct implementation of the applicable air quality plan or violate any air quality standards or contribute substantially to an existing or projected air quality violation? Less -than- Significant Impact Construction activities are expected to commence in early 2016. Grading and site improvements would occur first in early 2016, followed by building construction throughout the year until the winter when paving and coating would occur. The proposed project would be constructed in a 442 single phase estimated to require 12 months. Table 3 provides the estimated construction schedule for each phase: site preparation, grading, building construction, paving, and coating. Table 3: Estimated Project Construction Schedule 1 Site Preparation 1/1/2016 1/1/2016 1 2 Grading 1/2/2016 1/5/2016 _ 2 3 Building Construction 1/6/2016 12/17/2016 248 4 Paving 12/18/2016 12/24/2016 5 5 Architectural Coating 12/25/2016 12/31/2016 5 SOURCE: GARB CaIEEMod Version 2013.2.2. 6 97 0.37 Proposed project construction would generate short -term emissions of air pollutants, including fugitive dust and equipment exhaust emissions. The BAAQMD CEQA Air Quality Guidelines recommend quantification of construction- related exhaust emissions and comparison of those emissions to significance thresholds. The CalEEMod (California Emissions Estimator Model, Version 2013.2.2) was used to quantify construction- related pollutant emissions. CalEEMod output worksheets are included in Attachment A. Site preparation and grading would occur sequentially for a period of approximately 3 days using equipment such as backhoes, graders, dozers, loaders, and haul trucks. The site is currently a paved surface parking lot with related equipment and signage. Site preparation would consist of land clearing and grubbing. The estimated construction equipment associated with the proposed project along with the number of pieces of equipment, daily hours of operation, horsepower (hp), and load factor (i.e., percent of full throttle) are shown in Table 4. Table 4: Estimated Project Construction Equipment Usage Site Preparation Graders 1 8 174 0.41 Site Preparation Tractors/Loaders /Backhoes 1 8 97 0.37 Grading Concrete/Industrial Saws 1 8 81 0.73 Grading Rubber Tired Dozers 1 1 255 0.40 Grading Tractors/Loaders /Backhoes 2 6 97 0.37 Building Construction Cranes 1 4 226 0.29 Building Construction Forklifts 2 6 89 0.20 Building Construction Tractors/Loaders /Backhoes 2 8 97 0.37 Paving Cement and Mortar Mixers 4 6 9 0.56 Paving Pavers 1 7 125 0.42 Paving Rollers 1 7 80 0.38 Paving Tractors/Loaders /Backhoes 1 7 97 0.37 Architectural Coating Air Compressors 1 6 78 0.48 443 SOURCE: CARB CaIEEMod Version 2013.2.2. Based on CalEEMod, an average daily construction crew of 29 employees would be present on- site during building construction with less workers during other construction phases. Table 5 provides a list of the expected trips and trip lengths by construction phase of haul trucks, vendors, and construction workers. A total of 500 cubic yards of soil export is anticipated during construction to create a subsurface parking structure; requiring 62 haul truck trips. Table 5: Construction Trips and Trip Lengths Site Preparation 5 0 0 12.4 7.3 20.0 Grading 10 0 0 12.4 7.3 20.0 Building Construction 29 5 62 12.4 7.3 20.0 Paving 18 0 0 12.4 7.3 20.0 Architectural Coating 6 0 0 12.4 7.3 20.0 SOURCE: CARB CaIEEMod Version 2013.2.2. The emissions generated from these construction activities include: • Dust (including PM10 and PM2.5) primarily from "fugitive" sources (i.e., emissions released through means other than through a stack or tailpipe) such as material handling and travel on unpaved surfaces; and • Combustion emissions of criteria air pollutants (ROG, NOX, CO, PM10, and PM2.5) primarily from operation of heavy off -road construction equipment, haul trucks, (primarily diesel- operated), and construction worker automobile trips (primarily gasoline - operated). Construction- related fugitive dust emissions would vary from day to day, depending on the level and type of activity, silt content of the soil, and the weather. High winds (greater than 10 miles per hour) occur infrequently in the area, less than two percent of the time. In the absence of mitigation, construction activities may result in significant quantities of dust, and as a result, local visibility and PM10 concentrations may be adversely affected on a temporary and intermittent basis during construction. In addition, the fugitive dust generated by construction would include not only PM10, but also larger particles, which would fall out of the atmosphere within several hundred feet of the site and could result in nuisance -type impacts. Erosion control measures and water programs are typically undertaken to minimize these fugitive dust and particulate emissions. A dust control efficiency of over 50 percent due to daily watering and other measures (e.g., limiting vehicle speed to 15 mph, management of stockpiles, screening process controls, etc.) was estimated. Based on CalEEMod, one water application per day reduces fugitive dust by 34 percent, two water applications per day reduces fugitive dust by 55 percent, and three water applications per day reduces fugitive dust by 61 percent. ... Table 6 provides the estimated short -term construction emissions that would be associated with the proposed project and compares those emissions to the BAAQMD's significance thresholds for construction exhaust emissions. As the construction phases (i.e., grading, building construction, paving, etc.) are sequential, the average daily construction period emissions (i.e., total construction period emissions divided by the number of construction days) were compared to the BAAQMD significance thresholds. All construction- related emissions would be below the BAAQMD significance thresholds. Table 6: Estimated Daily Construction Emissions (pounds) SOURCE: CARB CalEEMod Version 2013.2.2. Nevertheless, BAAQMD's CEQA Air Quality Guidelines require a number of best management practices to control fugitive dust and exhaust emissions. With regard to construction activities, the Air Quality Conditions of Approval that are required to be implemented as part of the proposed project pursuant to the City of South San Francisco's project review and building permit process are also summarized within the following: AIR QUALITY DUST CONTROL: All construction projects are required to comply with the BAAQMD dust control measures. These measures are levied by the Engineering Division as a condition of building permit issuance and are monitored for compliance by staff and /or special City Engineering and /or Planning inspectors. The measures include all the Basic Fugitive Dust Emissions Reduction Measures and some of the Additional Fugitive Dust Emissions Reduction Measures identified by the BAAQMD May, 2011. The City requires projects to: a) Water all active construction sites at least twice daily. b) Cover all trucks hauling soil, sand, and other loose materials or require all trucks to maintain at least two feet of freeboard. c) Pave, apply water three times daily, or apply (non- toxic) soil stabilizers on all unpaved access roads, parking areas, and staging areas at construction sites. 445 Unmitigated Construction 4.2 14.1 0.9 0.9 10.4 Significance Threshold 54 54 82 54 - -- Significant (Yes or No)? No No No No No Mitigated Construction 3.3 11.1 0.1 0.1 10.1 Significance Threshold 54 54 82 54 - -- Significant (Yes or No)? No No No No No SOURCE: CARB CalEEMod Version 2013.2.2. Nevertheless, BAAQMD's CEQA Air Quality Guidelines require a number of best management practices to control fugitive dust and exhaust emissions. With regard to construction activities, the Air Quality Conditions of Approval that are required to be implemented as part of the proposed project pursuant to the City of South San Francisco's project review and building permit process are also summarized within the following: AIR QUALITY DUST CONTROL: All construction projects are required to comply with the BAAQMD dust control measures. These measures are levied by the Engineering Division as a condition of building permit issuance and are monitored for compliance by staff and /or special City Engineering and /or Planning inspectors. The measures include all the Basic Fugitive Dust Emissions Reduction Measures and some of the Additional Fugitive Dust Emissions Reduction Measures identified by the BAAQMD May, 2011. The City requires projects to: a) Water all active construction sites at least twice daily. b) Cover all trucks hauling soil, sand, and other loose materials or require all trucks to maintain at least two feet of freeboard. c) Pave, apply water three times daily, or apply (non- toxic) soil stabilizers on all unpaved access roads, parking areas, and staging areas at construction sites. 445 d) Sweep daily (with water sweepers) all paved access roads, parking areas and staging areas at construction sites. e) Sweep streets daily (with wet power vacuum sweepers) if visible soil material is carried onto adjacent public streets at least once per day. The use of dry power sweeping is prohibited. f) Hydroseed or apply (non- toxic) soil stabilizers to inactive construction areas (previously graded areas inactive for ten days or more). g) Enclose, cover, water twice daily, or apply non -toxic soil binders to exposed stockpiled materials. h) Install sandbags or other erosion - control measures to prevent silt runoff to public roadways. i) Replant vegetation in disturbed areas as quickly as possible. j) Watering should be used to control dust generation during the break -up of pavement. k) Cover all trucks hauling demolition debris from the site. 1) Use dust -proof chutes to load debris into trucks whenever feasible. m) Water or cover stockpiles of debris, soil, sand or other materials that can be blown by the wind. AIR QUALITY COMBUSTION EXHUAST CONTROL: All construction projects are required to comply with the BAAQMD's combustion exhaust control measures. The measures include Basic Exhaust Emissions Reduction Measures and some of the Enhanced Exhaust Emissions Reduction Measures identified by the BAAQMD May, 2011. The City requires projects to: n) All construction equipment shall be maintained and properly tuned in accordance with manufacturer's specifications. All equipment shall be checked by a certified mechanic and determined to be in proper running order prior to operation. o) Use alternative fueled construction equipment, if possible. p) All vehicle speeds on unpaved roads shall be limited to 15 mph. q) All roadways, driveways, and sidewalks to be paved shall be completed as soon as possible. Building pads shall be laid as soon as possible after grading unless seeding or soil binders are used. MR r) Diesel powered equipment shall not be left inactive and idling for more than five minutes, and shall comply with applicable BAAQMD rules. s) Idling times shall be minimized either by shutting equipment off when not in use or reducing the maximum idling time to five (5) minutes (as required by the California airborne toxics control measure Title 13, Section 2484 of the California Code of regulations). Clear signage shall be provided for construction workers at all access points. t) Post a visible sign with the telephone number and person to contact at the Lead Agency regarding dust complaints. This person shall respond and take corrective action within 24 hours. The Air District phone number shall also be visible to ensure compliance with applicable regulations. u) All off -road equipment greater than 25 horsepower (hp) and operating for more than 20 total hours over the entire duration of construction activities shall meet the following requirements: 1. Where access to alternative sources of power are available, portable diesel engines shall be prohibited; and 2. All off -road equipment shall have: a. Engines that meet or exceed either USEPA or CARB Tier 2 off -road emission standards, and b. Engines that are retrofitted with a CARB Level 3 Verified Diesel Emissions Control Strategy (VDECS). Acceptable options for reducing emissions include the use of late model engines, low- emission diesel products, alternative fuels, engine retrofit technology, after - treatment products, add -on devices such as particulate filters, and /or other options as such are available. AIR QUALITY TOXIC AIR CONTAMINANTS: The potential for toxic air contaminants (asbestos and lead based paint) to be released into the environment is regulated and monitored through the Building Division in compliance with BAAQMD Regulation 11, Rule 2 during Demolition. Any applicant requesting a building or demolition permit involving a structure suspected of containing asbestos (defined as a building constructed prior to 1978) and /or lead based paint (defined as a building constructed prior to 1960) is required to obtain a J- Permit from the BAAQMD. The J Permit is required to be posted on the job site and if it is not there the job can be fined by the BAAQMD and may be shut down by the City's Building Division. Through this process, the BAAQMD and the City Building Division ensure that asbestos and lead based paints are handled, removed, encapsulated and disposed of in accordance with 447 prevailing law requisite to protect the environment, the people conducting the work and nearby sensitive receptors. The process typically requires surveys and removal of lead based paints and asbestos by licensed contractors certified in the handling methods requisite to protect the environment and public health and safety. The process also provides for BAAQMD and City supervision to insure compliance. AIR QUALITY VOLATILE ORGANIC COMPOUNDS: BAAQMD Regulation 8, Rule 3 for Architectural Coatings. Emissions of VOC due to the use of architectural coatings are regulated by the limits contained in Regulation 8: Organic Compounds, Rule 3: Architectural Coatings (Rule 8 -3). Rule 8 -3 was revised on January 1, 2011 to include more stringent VOC limit requirements. The revised VOC architectural coating limits specify that the use paints and solvents with a VOC content of 100 grams per liter or less for interior and 150 grams per liter or less for exterior surfaces shall be required. All construction emissions would be below the BAAQMD significance thresholds with the implementation of these measures that are required by law. Therefore, proposed project impacts that would be associated with construction- related exhaust emissions would be less than significant with implementation of the measures the City requires by law. IMPACT AQ -3: Would the operation of the proposed project conflict with or obstruct implementation of the applicable air quality plan or violate any air quality standards or contribute substantially to an existing or projected air quality violation? Less -than- Significant Impact CalEEMod was used to estimate emissions that would be associated with motor vehicle use, space and water heating, and landscape maintenance emissions expected to occur after the proposed project construction is complete and operational. The proposed project land use types and size and other project - specific information were input to the model. Unless otherwise noted, the CalEEMod model defaults for San Mateo County were used. CalEEMod provides emissions for transportation, areas sources, electricity consumption, natural gas combustion, electricity usage associated with water usage and wastewater discharge, and solid waste land filling and transport. CalEEMod output worksheets are included in Attachment A. The proposed project land uses were input into CalEEMod, which included 38 apartment units (as Apartment Mid -Rise) and 47 parking spaces on a 0.32 -acre site. The following default CalEEMod trip rate was used in the air quality analysis: Apartment Mid -Rise — 250 daily trips per weekday. The default trip lengths and trip types specified by CalEEMod for San Mateo County were used. Estimated daily and annual operational emissions that would be associated with the proposed project are presented in Tables 7 and 8 and are compared to BAAQMD's thresholds of significance. Fireplaces and wood stoves, if part of the proposed project, would result in no potentially significant operational ROG emissions, but such emissions would be reduced through restrictions on hearths as part of the proposed project. As indicated in Tables 7 and 8, the estimated proposed project operational emissions would be below the BAAQMD's significance thresholds and would be less than significant. Table 7: Estimated Daily Project Operational Emissions (pounds) SOURCE: CARB CalEEMod Version 2013.2.2. Table 8: Estimated Annual Project Operational Emissions (tons) Unmitigated Unmitigated Area 14.8 0.22 2.87 2.87 23.9 Energy 0.01 0.09 <0.01 <0.01 0.05 Mobile 0.9 1.56 0.04 0.04 18.3 Total Project 15.6 1.87 2.92 2.91 42.2 Significance Threshold 54 54 82 54 - -- Significant Impact? No No No No No No Mitigated Mitigated Area 1.43 0.04 0.06 0.06 3.17 Energy 0.01 0.09 <0.01 <0.01 0.04 Mobile 0.85 1.56 0.02 0.02 8.49 Total Project 2.29 1.69 0.09 0.08 11.7 Significance Threshold 54 54 82 54 - -- Significant Impact? No No No No No SOURCE: CARB CalEEMod Version 2013.2.2. Table 8: Estimated Annual Project Operational Emissions (tons) SOURCE: CARB CalEEMod Version 2013.2.2. With regard to proposed project operations, the Air Quality Conditions of Approval that are required to be implemented as part of the proposed project pursuant to the City of South San Unmitigated Area 0.27 <0.01 <0.01 <0.01 0.33 Energy <0.01 0.02 <0.01 <0.01 <0.01 Mobile 0.13 0.25 _ <0.01 <0.01 1.32 Total Project 0.40 0.27 0.01 0.01 1.66 Significance Threshold 10 10 15 10 - -- Significant (Yes or No)? No No No No No Mitigated Area 0.24 <0.01 <0.01 <0.01 0.29 Energy <0.01 0.02 _ <0.01 <0.01 <0.01 Mobile 0.13 0.25 <0.01 <0.01 1.32 Total Project 0.37 0.27 0.01 0.01 1.61 Significance Threshold 10 10 15 10 - -- Significant (Yes or No)? No No No No No SOURCE: CARB CalEEMod Version 2013.2.2. With regard to proposed project operations, the Air Quality Conditions of Approval that are required to be implemented as part of the proposed project pursuant to the City of South San Francisco's project review and building permit process are also summarized within the following: AIR QUALITY VEHICLE EMISSIONS: The potential for air quality degradation from vehicle emissions is regulated to some extent by Section 20.400.003 of the South San Francisco Code. Table 20.400.003 in the Zoning Ordinance establishes specific program requirements for a project generating one hundred or more vehicle trips per day or a project seeking a floor area ratio (FAR) bonus. The required alternative mode (mode shift) use for all projects is twenty -eight percent below standard trip rates modeled for the project without TDM measures in place. Projects with an increased FAR are required to increase their alternative mode use accordingly. The Planning Division implements and monitors this requirement. AIR QUALITY HEARTH EMISSIONS: The BAAQMD adopted Regulation 6, Rule 3: Wood - Burning Devices to reduce the harmful emissions that come from wood smoke. The Rule requires cleaner - burning (e.g., natural gas or propane) USEPA- certified stoves and inserts in new housing construction. As indicated, the estimated operational emissions that would be associated with the proposed project would be below the BAAQMD's significance thresholds and would be less than significant. IMPACT AQ -4: Would proposed project operational activities cause an exceedance of the California Ambient air Quality Standards (CAAQS) for CO at traffic intersections? Less - than- Significant Impact Increased traffic volumes due to the project would result in increased pollutant emissions in the vicinity of the roads utilized by this traffic, which can cause pollutant levels to exceed the ambient air quality standards. The BAAQMD has identified the following screening criteria for determining whether a project's motor vehicle CO emissions would likely cause ambient air quality standards to be exceeded: • The project is not consistent with an applicable congestion management program established by the county congestion management agency for designated roads or highways, the regional transportation plan, and local congestion management agency plans. • The project traffic would increase traffic volumes at affected intersections to more than 44,000 vehicles per day. • The project traffic would increase traffic volumes at affected intersections to more than 24,000 vehicles per day where vertical and /or horizontal mixing is substantially limited (e.g., tunnel, parking garage, bridge underpass, natural or urban street canyon, below - grade roadway). 450 The proposed project would generate minimal new traffic trips and would comply with these screening criteria. Based on the BAAQMD's criteria, proposed project traffic would not exceed CO standards and therefore, no further analysis was conducted for CO impacts. This impact would be considered less than significant on a project -level and cumulative basis. The proposed project would be approximately 45,368 gross square feet in area. The daily traffic trip rate would be 250, according to CalEEMod Version 2013.2.2; the default emissions model value. Compared to the Trip Generation Manual, 9,h Edition Institute of Transportation Engineers, the air quality results tend to be an overestimation of the impacts given the air quality analysis often uses a conservatively high value for the trip rate. Vehicular access to the site would not include going through any tunnels, underpasses or natural or urban street canyons. The proposed project would include a parking garage. Nevertheless, the proposed project traffic would not cause the daily traffic volumes to exceed the screening criteria based on the circulation infrastructure and the projected traffic volumes. Therefore, impacts that would be associated with long -term operational CO exhaust emissions would be less than significant. IMPACT AQ -5: Would proposed project operational activities expose sensitive receptors to substantial concentrations of toxic air contaminants (TACs)? Less - than - Significant Impact According to BAAQMD CEQA Air Quality Guidelines and Air Toxics New Source Review Program Health Risk Screening Analysis Guidelines 18, health effects from carcinogenic air toxics are usually described in terms of individual cancer risk. "Individual Cancer Risk" is the likelihood that a person exposed to concentrations of TACs over a 70 -year lifetime will contract cancer, based on the use of standard risk - assessment methodology. The Maximally Exposed Individual (MEI) represents the worst —case risk estimate, based on a theoretical person continuously exposed for 70 years at the point of highest compound concentration in the air. This is a highly conservative assumption, since most people do not remain at home all day and on average residents change residences every 11 to 12 years. In addition, this assumption assumes that residents are experiencing outdoor concentrations for the entire exposure period. The significance of impact to sensitive receptors is dependent on the chance of contracting cancer from exposure to TACs such as DPM or of having adverse health effects from exposure to non - carcinogenic TACs. A project is considered to be significant if the incremental cancer risk at an existing receptor exceeds 10 in a million. This HRA analyzed the potential incremental cancer risks to sensitive receptors in the project vicinity of the proposed project, using CalEEMod and emission rates from CARB's 18 Bay Area Air Quality Management District. Air Toxics New Source Review Program Health Risk Screening Analysis Guidelines. January 2010. hlW:// www .baagmd.gov /—/media/Files /En ing eerinL Air %2OToxics %2OPrograms /hrsa guidelines.ashx 451 EMFAC2011 and OFFROAD2011 emission models. Emission factors were input into the USEPA AERMOD (Version 14134)19 atmospheric dispersion model to calculate ambient air concentrations at receptors in the project vicinity. This assessment is intended to provide a worst —case estimate of the increased exposure by employing a standard emission estimation program, an accepted pollutant dispersion model, approved toxicity factors, and exposure parameters. These conservative health risk methodologies were used in this HRA in order to estimate maximum potential health risks. These methodologies overestimate both non - carcinogenic and carcinogenic health risk, possibly by an order of magnitude or more. Therefore, for carcinogenic risks, the actual probabilities of cancer formation in the populations of concern due to exposure to carcinogenic pollutants are likely to be lower than the risks derived using the risk assessment methodology. The extrapolation of toxicity data in animals to humans, the estimation of concentration prediction methods within dispersion models; and the variability in lifestyles, fitness and other confounding factors of the human population also contribute to the overestimation of health impacts. Therefore, the results of the HRA are highly overstated. Emissions of PM2.5 are associated with health risks. The BAAQMD has established a separate significance threshold for PM2.5 to protect public health. For individual projects, the BAAQMD significant threshold for PM2.5 impacts is an average annual increase of 0.3 µg/m3. For cumulative analysis, BAAQMD recommends that the PM2.5 concentrations from all sources within a 1,000 foot radius of the project's impact area be assessed and compared to a cumulative threshold of an average annual increase of 0.8 µg /m3. In accordance with California Office of Environmental Health Hazard Assessment (OEHHA) guidelines, 20 the HRA was accomplished by applying the highest estimated concentrations of TAC at the receptors analyzed to the established cancer potency factors and acceptable reference concentrations for non - cancer health effects. Attachment B provides additional information on the methodology used for the HRA. Cumulative Health Impact Methodology The BAAQMD's CEQA Air Quality Guidelines also include standards and methods for determining the significance of cumulative health risk impacts. The method for determining cumulative health risk requires the tallying of health risk from permitted stationary sources, major roadways and any other identified substantial TAC sources in the vicinity of a project site (i.e., within a 1,000 -foot radius) and then adding the individual sources to determine whether the 19 US Environmental Protection Agency, AERMOD Modeling System, hlW: / /www.epa. gov /scram001 /dispersion prefrec.htm. 20 Office of Environmental Health Hazard Assessment. Air Toxics Hot Spots Program Guidance Manual for Preparation ofHealth Risk Assessment. August 2003. h!W: / /oehha.ca. gov / air /hot spots /pdf/HRAguidefinal.pdf 452 BAAQMD's cumulative health risk thresholds of 100 in one million are exceeded. The non - cancer hazard index significance threshold of 1.0 is defined in the BAAQMD CEQA Air Quality Guidelines. For cumulative analysis of non - cancer hazard index, BAAQMD requires that the hazards from all sources within a 1,000 foot radius of the proposed project's impact area be assessed and compared to a cumulative hazard index threshold of 10. BAAQMD has developed a geo- referenced database of permitted stationary emissions sources throughout the San Francisco Bay Area and the Stationary Source Risk & Hazard Analysis Tool (May, 2012) for estimating cumulative health risks from the permitted sources. Six permitted sources are located within 1,000 feet of the project site. The CalTrain commuter rail line is also located within 1,000 feet to the east. BAAQMD has also developed a geo- referenced database of major roadways in the Bay Area and the Highway Screening Analysis Tool (May 2011) for estimating cumulative health risks from such roadways. An identified major roadway, Highway 101, is located 725 feet to the east of the project site and 630 feet to the east of existing residences. BAAQMD CEQA Air Quality Guidelines also require the inclusion of surface streets within 1,000 feet of the project with annual average daily traffic (AADT) of 10,000 or greater. 21 The following roadways meet this criterion: Grand Avenue, Linden Avenue, and Airport Boulevard. Incremental Cancer Risk Cancer risk is defined as the lifetime probability of developing cancer from exposure to carcinogenic substances. Cancer risks are expressed as the chances in one million of contracting cancer, for example, ten cancer cases among one million people exposed. Following HRA guidelines established by California Office of Environmental Health Hazard Assessment (OEHHA)22 and BAAQMD's Health Risk Screening Analysis Guidelines, incremental cancer risks were calculated by applying toxicity factors to modeled TAC concentrations in order to determine the inhalation dose (milligrams per kilogram of body weight per day [mg /kg- day]). Health Impacts on Existing Residences As a result of construction activities (with implementation of the measures the City requires by law), the maximum cancer risk for a residential -adult receptor would be 0.61 per million and for a residential -child would be 6.87 per million (based on a 70 -year annual average DPM concentration of 0.0011 µg /m3 per dispersion modeling analysis and risk exposure calculation methodologies). 21 BAAQMD County Surface Street Screening Tables, May 2011 and CEHTP Traffic Linkage Service Demonstration, http: / /www.ehib.org/traffic tootisp. 22 Office of Environmental Health Hazard Assessment. Air Toxics Hot Spots Program Guidance Manual for Preparation ofHealth Risk Assessment. August 2003. h!W: / /oehha.ca.2ov/ air /hot spots /pdf/HRAguidefinal.pdf 453 The maximum cancer risk for a school child receptor would be less than 0.01 per million. Thus, the cancer risk due to construction activities is below the BAAQMD threshold of 10 per million and would be less than significant. Non - Cancer Health Hazard Both acute (short -term) and chronic (long -term) adverse health impacts unrelated to cancer are measured against a hazard index (HI), which is defined as the ratio of the predicted incremental exposure concentration from the project to a published reference exposure level (REL) that could cause adverse health effects. The RELs are published by OEHHA based on epidemiological research. The ratio (referred to as the Hazard Quotient [HQ]) of each non - carcinogenic substance that affects a certain organ system is added to produce an overall HI for that organ system. The overall HI is calculated for each organ system. The impact is considered to be significant if the overall HI for the highest- impacted organ system is greater than 1.0. The chronic reference exposure level for DPM was established by the California OEHHA23 as 5 µg/m3. Thus, the project - related annual concentration of DPM cannot exceed 5.0 µg /m3; resulting in a chronic acute HI of greater than 1.0 (i.e., DPM annual concentration /5.0 µg /m). There is no acute REL for DPM. However, diesel exhaust does contain acrolein and other compounds, which do have an acute REL. Based on BAAQMD's DPM speciation data, acrolein emissions are approximately 1.3 percent of the total DPM emissions. The acute REL for acrolein was established by the California OEHHA24 as 2.5 µg /m3. Thus, the project - related 1 -hour concentration of acrolein cannot exceed 2.5 µg /m3; resulting in an acute HI of greater than 1.0 (i.e., acrolein 1 -hour concentration /2.5 µg /m). The chronic HI would be less than 0.02, based on a project - related maximum annual diesel concentration of 0.08 µg /m3 (per dispersion modeling analysis) or 0.08 µg /m315.0 µg /m3, which is less than 0.02. The chronic HI would be below the BAAQMD threshold of 1 and the impact of the proposed project would therefore be less than significant. The acute HI would be 0.02, based on a project - related maximum 1 -hour diesel concentration of 3.3 µg/m3 (per dispersion modeling analysis) and acrolein speciation of 1.3 percent for DPM or 3.3 µg /m3/2.5 µg /m3 times 1.3 percent (acrolein per DPM), which is 0.02. The acute HI would be below the BAAQMD threshold of 1 and the impact of the proposed project would therefore be less than significant. 23 California Office of Environmental Health Hazards Assessment - Acute, 8 -hour, and Chronic Reference Exposure Levels, June 2014, http: / /www.oehha.ca.gov /air /allrels.html 24 California Office of Environmental Health Hazards Assessment - Acute, 8 -hour, and Chronic Reference Exposure Levels, June 2014, 1-itt12 www.oehha.ca.gov /air /allrels.html 454 PM2.5 Concentration Dispersion modeling was also used to estimate exposure of sensitive receptors to project - related concentrations of PM2.5. Because emissions of PM2.5 are associated with health risks, the BAAQMD has established a separate significance threshold to protect public health. For individual projects, the BAAQMD significance threshold for PM2.5 impacts is an average annual increase of 0.3 µg /m3. The BAAQMD guidance requires inclusion of PM2.5 exhaust emissions only in this analysis (i.e., fugitive dust emissions are addressed under BAAQMD dust control measures and are required by law to be implemented into project construction. The maximum annual PM2.5 concentration as a result of proposed project construction would be 0.08 µg /m3. The annual PM2.5 concentration due to implementation of the proposed project would be below the BAAQMD threshold of 0.3 pg /m3, and hence is considered less than significant. Cumulative Impacts on Existing Residences Table 9 lists the BAAQMD - permitted facility, major roadways, nearby roadways, and CalTrain within 1,000 feet of the proposed project. Table 9 also shows the cumulative cancer risk, hazard impact, and PM2.5 concentrations (in µg/m3) associated with these facilities (developed by BAAQMD), as well as the proposed project. The estimated cancer risk impacts at the nearest existing residence due to Highway 101 is 6.6 per million. The estimated cancer risk impacts at the nearest existing residence due to other nearby roadways is 2.4 per million. The estimated cancer risk impacts at the nearest existing residence due to CalTrain is 4.7 per million. The estimated cancer risk impacts at the nearest existing residence due to nearby permitted sources is 0.8 per million. The cumulative cancer risk from the construction activities and other nearby sources is 15.2 per million. Table 9 represents the cumulative health impacts on the maximum exposed existing receptors. The cumulative impacts are below the BAAQMD significance thresholds. Thus, the proposed project health impacts (due to construction activities) plus existing sources would be a less than significant cumulative impact. Secondly, given that the proposed project would not result in increased health impacts exceeding the project -level thresholds, the proposed project would also not result in a cumulatively considerable contribution to localized health risk and hazard impacts, resulting in a less- than - significant cumulative air quality impact. 455 Table 9: Estimated Health Impacts for Existing Receptors IIIIIIIIIIIIIIIIIIIIuIIIIJI �,�, �N N IVVup N,NN "" »�fl�ry�� � � NNN yN� ;, ?il'Y inirc�n» k�INNIN N���NN�NC» �1N qq N » »io uyy�r�, v »s »���� � NNRNNN�NN�� ➢AA91I�IU! �!� ������������I�I�����I����I����I�����w���������I����I������C �C1q �C��» �CflgC ������� Nflflq��BflftCflgp Ill& RNttgCftBflgCftBflqCftB���ft����tl����������������������������flft�E »flflq »��flgpNBfl »CflgC »Cflq »ft�flq�NB� »� »ft�0q ftC�1q ft�flgCftCflq�» flflq» »Bflq »ftCflq »ftN'�d &�� »4N�Rflb'�» »ft�t� »��flq »ft�flgNh�C q» »»�gC�fl� »�flflq »�fl»q�Bflq� »Bft�ft�fl Proposed Project Proposed Project 0.61/6.87 0.02/0.02 0.08 Significance Threshold 10 1.0 0.3 Significant (Yes or No)? No No No Cumulative Unocal #1026 Grand Martcoa 0.43 <0.01 NOD Auto Body Shop No risk/concentration. No further study needed. Wright Cleaners Replaced equipment with Petroleum machine. No risk or concentration. Chino's Service Stationa 0.41 <0.01 Central Cleaners Facility closed in September of 2010. No risk/concentration. Harbor Auto Body No risk/concentration. No further study needed. CalTrain Operations' 4.70 0.03/0.01 0.06 Highway 101c 6.63 0.01 0.06 Grand Avenue 0.44 0.01 0.02 Linden Avenue 1.33 0.01 0.05 Airport Boulevard 0.62 0.01 0.02 Proposed Project 0.61 0.02/0.02 0.08 Cumulative Impact 15.2 0.06/0.09 0.29 Significance Threshold 100 10 0.8 Significant (Yes or No)? No No No Note: Proposed project cancer risk values are for adult and child, respectively. Proposed project hazard impact values are for acute and chronic, respectively. a Cancer Risk, Hazard Impact, and PM2.5 Concentration values for the source gasoline station was adjusted using the BAAQMD Gas Station Distance Multiplier. b CalTrain Cancer Risk, Hazard Impact, and PM2.5 Concentration values based on the assumption of the number of diesel locomotives passing by on a weekly basis. The AERMOD model was used to estimate maximum downwind concentrations and potential health risk at sensitive receptors from the rail line source. Additional information is provided in Attachment B. c Highway 101 Cancer Risk, Hazard Impact, and PM2.5 Concentration values for Highway 101 are based on 6 foot height estimates provided by the BAAQMD developed geo- referenced database of permitted and Highway TAC emissions. Additional information is provided in Attachment B. 456 Health Impacts on Proposed Residences The following describes the health risk assessment associated with proposed residences as a result of existing cumulative sources such as permitted sources (i.e., diesel generators, gasoline stations), CalTrain operations, nearby roadways, and Highway 101. The BAAQMD's CEQA Air Quality Guidelines include standards and methods for determining the significance of cumulative health risk impacts. The method for determining cumulative health risk requires the tallying of health risk from permitted stationary sources, major roadways and any other identified substantial TAC sources in the vicinity of a project site (i.e., within a 1,000 -foot radius) and then adding the individual sources to determine whether the BAAQMD's cumulative health risk thresholds are exceeded. Table 10 lists the BAAQMD - permitted facility, major roadways, and CalTrain within 1,000 feet of the proposed project. Table 10 shows the cumulative cancer risk, hazard impact, and PM2.5 concentrations (in µg/m3) associated with these facilities. Table 10 represents the cumulative health impacts on proposed receptors. Of note, the highest health impacts for proposed receptors occur at the first floor of the complex and decrease with increasing height. The estimated cancer risk impacts at the proposed residence due to Highway 101 is 5.9 per million. The estimated cancer risk impacts at the proposed residence due to other nearby roadways is 3.6 per million. The estimated cancer risk impacts at the proposed residence due to CalTrain is 2.0 per million. The estimated cancer risk impacts at the proposed residence due to nearby permitted sources is 1.6 per million. The cumulative cancer risk from roadways and other nearby sources is 13.1 per million. The cumulative impacts are below the BAAQMD significance thresholds. Thus, the siting of new residence at the project site would be a less - than- significant health impact. 457 Table 10: Estimated Health Impacts for Proposed Receptors IIIIIIIIIIIIIIIIIIIIIII N ",r�fN nN IIIIIIIVVuU N,NNuN ��� flfl����dtl gpg9 � NNN NNE ; �Y q�pll ��KKU k NNIN N,���NN�NCn �1N N viuu up IVuluu � vAV���� � NNRNNN�i N ➢NA91I IU! Unocal #1026 Grand Martcoa 0.32 <0.01 - NOD Auto Body Shop No risk/concentration. No further study needed. Wright Cleaners Replaced equipment with Petroleum machine. No risk or concentration. Chino's Service Stationa 1.30 <0.01 Central Cleaners Facility closed in September of 2010. No risk/concentration. Harbor Auto Body No risk/concentration. No further study needed. CalTrain Operations' 1.98 0.01 /0.01 0.02 Highway 101c 5.92 0.01 0.05 Grand Avenue 0.53 0.01 0.02 Linden Avenue 2.47_ 0.01 0.10 Airport Boulevard 0.58 0.01 0.02 Cumulative Impact 13.1 0.07/0.07 0.21 Significance Threshold 100 10 0.8 Significant (Yes or No)? No No No Note: Cancer risk values are for adult and child, respectively. Hazard impact values are for acute and chronic, respectively. a Cancer Risk, Hazard Impact, and PM2.5 Concentration values for the source gasoline station was adjusted using the BAAQMD Gas Station Distance Multiplier. b CalTrain Cancer Risk, Hazard Impact, and PM2.5 Concentration values based on the assumption of the number of diesel locomotives passing by on a weekly basis. The AERMOD model was used to estimate maximum downwind concentrations and potential health risk at sensitive receptors from the rail line source. Additional information is provided in Attachment B. c Highway 101 Cancer Risk, Hazard Impact, and PM2.5 Concentration values for Highway 101 are based on 6 foot height estimates provided by the BAAQMD developed geo- referenced database of permitted and Highway TAC emissions. Additional information is provided in Attachment B. IMPACT AQ -6: Would the proposed project create objectionable odors affecting a substantial amount of people? Less - than - Significant Impact Though offensive odors from stationary and mobile sources rarely cause any physical harm, they still remain unpleasant and can lead to public distress, generating citizen complaints to local governments. The occurrence and severity of odor impacts depend on the nature, frequency, and intensity of the source; wind speed and direction; and the sensitivity of receptors. The BAAQMD's significance criteria for odors are subjective and are based on the number of odor complaints generated by a project. Generally, the BAAQMD considers any project with the potential to frequently expose members of the public to objectionable odors to cause a significant impact. With respect to the proposed project, diesel - fueled construction equipment exhaust would generate some odors. However, these emissions typically dissipate quickly and would be unlikely to affect a substantial number of people. Odor impacts could also result from siting a new sensitive receptor near an existing odor source. Examples of land uses that have the potential to generate considerable odors include, but are not limited to wastewater treatment plants; landfills; refineries; and chemical plants. EM In the BAAQMD CEQA Air Quality Guidelines (dated May 2011), odor screening distances were recommended by BAAQMD for a variety of land uses. Projects that would site a new receptor farther than the applicable screening distance from an existing odor source would not likely result in a significant odor impact. The odor screening distances are not used as absolute screening criteria, rather as information to consider along with the odor parameters and complaint history. The odor screening distances for a sewage treatment plant, refinery, and chemical plant are two miles. 2' The proposed project is not within the odor screening distances for a sewage treatment plant, refinery, or other odor producing sources. Generally, odor emissions are highly dispersive, especially in areas with higher average wind speeds. However, odors disperse less quickly during inversions or during calm conditions, which hamper vertical mixing and dispersion. Therefore, odor impacts associated with the location of the proposed project would be less than significant. 6.0 REFERENCES Bay Area Air Quality Management District, 2005. BAAQMD Health Risk Screening Analysis Guidelines, http: / /www.baagmd.gov/pmt /air toxics /risk procedures j2olicies /hrsa guidelines.pdf. Bay Area Air Quality Management District. Air Toxics New Source Review Program Health Risk Screening Analysis Guidelines. January 2010. http: / /www.baagmd. gov /—/media/Files /Enineerin/ Air% 20Toxics %20Prorams /hrsa�aideline s.ashx 15 Sacramento Metropolitan Air Quality Management District, Guide to Air Quality Assessment in Sacramento County, June 2014, hlW: / /www.airquali .or cega/ce a uideupdate/ Ch7OdorScreeningDistancesFINAL .pdf 459 Bay Area Air Quality Management District. County Surface Street Screening Tables. May 2011. htlp: / /www.baagmd. gov / —/ media / Files / Planning ° /`20and %20Research/CEQA /County %20Surfac e% 20Street% 20Screening% 20Tables %20Dec %202011.ashx ?la =en Bay Area Air Quality Management District. CEQA Air Quality Guidelines. May 2012. http: / /www.baagmd. gov /—/ media / Files / Planning°/ a20and°/ a20Research /CEQA /BAACIMD ° /a20CE OA %20Guidelines Final May %202012.ashx ?la =en Bay Area Air Quality Management District. Recommended Methods for Screening and Modeling Local Risks and Hazards. May 2012. hlp: / /www.baagmd. gov / —/ media / Files / Planning %20and ° /a20Research/CE A /Risk %20Modeling % 20Approach %20May %202012.ashx ?la =en Bay Area Air Quality Management District. Identifying Areas with Cumulative Impacts from Air Pollution in the San Francisco Bay Area. March 2014. htlp: / /www.baagmd. gov / —/ media / Files /Planning ° /`20and %20Research /CARE %20Program /Docu meats /hnpactCommunities_2_ Methodology.ash0la =en Bay Area Air Quality Management District. Improving Air Quality & Health in Bay Area Communities, Community Air Risk Program (CARE) Retrospective & Path Forward (2004 — 2013). April 2014. htlp: / /www.baagmd. gov / —/ media / Files / Planning% 20and %20Research /CARE %20Program /Docu meats /CARE Retrospective Apri12014.ashx ?la =en California Air Pollution Control Officers Association. CEQA and Climate Change: Evaluating and Addressing Greenhouse Gas Emissions from Projects Subject to the California Environmental Quality Act. January 2008. htlp://www.capcoa.org/wp- content /unloads /2012 /03 /CAPCOA- White- Paper.pdf from Diesel - Fueled Engines and Vehicles. October 2000. l'ittE://www.arb.ca.gov/diesel/documents/rEpfinal.j2df California Air Resources Board. Risk Management Guidance for the Permitting of New Stationary Diesel - Fueled Engines. October 2000. l'ittE://www.arb.ca.gov/diesel/documents/nngfinal.pdf California Air Resources Board. Air Quality and Land Use Handbook: A Community Health Perspective. April 2005. http:/ /www.arb.ca.gov /ch/handbook.pdf California Air Resource Board. Diesel Particulate Matter Exposure Assessment Study for the Ports of Los Angeles and Long Beach. April 2006. http: / /www.arb.ca. ov/ ports /marinevess /documents /portstudy0406.pdf M 461 462 Attachment A Construction and Operational Emissions CalEEIVIod Output Files - Annual - Summer - Winter - Mitigation Report Rail Emission Files A I Ies avaii IabIe t 315 11 'MaIIIfle Ave i�-i� ie, SSI 463 Attachment B Health Risk Assessment Assumptions and Methodologies A health risk assessment (HRA) is accomplished in four steps: 1) hazards identification, 2) exposure assessment, 3) toxicity assessment, and 4) risk characterization. These steps cover the estimation of air emissions, the estimation of the air concentrations resulting from a dispersion analysis, the incorporation of the toxicity of the pollutants emitted, and the characterization of the risk based on exposure parameters such as breathing rate, age adjustment factors, and exposure duration; each depending on receptor type. This HRA was conducted in accordance with technical guidelines developed by federal, state, and regional agencies, including U.S. Environmental Protection Agency (USEPA), California Environmental Protection Agency (CalEPA), California Office of Environmental Health Hazard Assessment (OEHHA) Air Toxics Hot Spots Program Guidances, and the Bay Area Air Quality Management District (BAAQMD) Health Risk Screening Analysis Guidelines.2 According to CalEPA, a HRA should not be interpreted as the expected rates of cancer or other potential human health effects, but rather as estimates of potential risk or likelihood of adverse effects based on current knowledge, under a number of highly conservative assumptions and the best assessment tools currently available. TERMS AND DEFINITIONS As the practice of conducting a HRA is particularly complex and involves concepts that are not altogether familiar to most people, several terms and definitions are provided that are considered essential to the understanding of the approach, methodology and results: Acute effect — a health effect (non- cancer) produced within a short period of time (few minutes to several days) following an exposure to Toxic Air Contaminants (TACs). Cancer risk — the probability of an individual contracting cancer from a lifetime (i.e., 70 year) exposure to TAC such as DPM in the ambient air. Chronic effect — a health effect (non- cancer) produced from a continuous exposure occurring over an extended period of time (weeks, months, years). Hazard Index (HI) — the unitless ratio of an exposure level over the acceptable reference dose (RfC). The HI can be applied to multiple compounds in an additive manner. Hazard Quotient (HQ) — the unitless ratio of an exposure level over the acceptable reference dose (RfC). The HQ is applied to individual compounds. 1 Office of Environmental Health Hazard Assessment, 2003. Air Toxics Hot Spots Program Guidance Manual for Preparation ofHealth Risk Assessments, http: / /www.oehha.org/ air /hot spots /pdf/HRAgttidefinal.pdf. 2 Bay Area Air Quality Management District, 2005. BAAQMD Health Risk Screening Analysis Guidelines, hlW: / /www.baagmd.gov /pmt/air txics /risk procedures policies/hrsa guidelines.pdf. En Toxic air contaminants (TAC) — any air pollutant that is capable of causing short -term (acute) and /or long -term (chronic or carcinogenic, i.e., cancer causing) adverse human health effects (i.e., injury or illness). The current California list of TAC lists approximately 200 compounds, including particulate emissions from diesel - fueled engines. Human Health Effects - comprise disorders such as eye watering, respiratory or heart ailments, and other (i.e., non - cancer) related diseases. Health Risk Assessment (HRA) — an analysis designed to predict the generation and dispersion of TAC in the outdoor environment, evaluate the potential for exposure of human populations, and to assess and quantify both the individual and population -wide health risks associated with those levels of exposure. Incremental — under CEQA, the net difference (or change) in conditions or impacts when comparing the baseline to future year project conditions. Maximum exposed individual (MEI) — an individual assumed to be located at the point where the highest concentrations of TACs, and therefore, health risks are predicted to occur. Non - cancer risks — health risks such as eye watering, respiratory or heart ailments, and other non - cancer related diseases. Receptors — the locations where potential health impacts or risks are predicted (i.e., schools, residences, and recreational sites). LIMITATIONS AND UNCERTAINTIES There are a number of important limitations and uncertainties commonly associated with a HRA due to the wide variability of human exposures to TACs, the extended timeframes over which the exposures are evaluated and the inability to verify the results. Among these challenges are the following: • The HRA exposure estimates do not take into account that people do not usually reside at the same location for 70 years and that other exposures (i.e., school children) are also of much shorter durations than was assumed in this analysis. Therefore, the results of the HRA are highly overstated for those cases. • Other limitations and uncertainties associated with HRA and identified by the CalEPA include: (a.) lack of reliable monitoring data; (b.) extrapolation of toxicity data in animals to humans; (c.) estimation errors in calculating TACs emissions; (d.) concentration prediction errors with dispersion models; and (e.) the variability in lifestyles, fitness and other confounding factors of the human population. HAZARDS IDENTIFICATION Diesel exhaust is a complex mixture of numerous individual gaseous and particulate compounds emitted from diesel - fueled combustion engines. Diesel particulate matter (DPM) is formed primarily through the incomplete combustion of diesel fuel. DPM is removed from the 465 atmosphere through physical processes including atmospheric fall -out and washout by rain. Humans can be exposed to airborne DPM by deposition on water, soil, and vegetation; although the main pathway of exposure is inhalation. In August 1998, the California Air Resource Board (GARB) identified DPM as an air toxic. The CARB developed the Risk Reduction Plan to Reduce Particulate Matter Emissions from Diesel - Fueled Engines and Vehicles and Risk Management Guidance for the Permitting of New Stationary Diesel - Fueled Engines and approved these documents on September 28, 2000.34 The documents represent proposals to reduce DPM emissions, with the goal of reducing emissions and the associated health risk by 75 percent in 2010 and by 85 percent in 2020. The program aimed to require the use of state -of -the -art catalyzed DPM filters and ultra - low - sulfur diesel fuel. In 2001, CARB assessed the state -wide health risks from exposure to diesel exhaust and to other toxic air contaminants. It is difficult to distinguish the health risks of diesel emissions from those of other air toxics, since diesel exhaust contains approximately 40 different TACs. The CARB study detected diesel exhaust by using ambient air carbon soot measurements as a surrogate for diesel emissions. The study reported that the state -wide cancer risk from exposure to diesel exhaust was about 540 per million population as compared to a total risk for exposure to all ambient air toxics of 760 per million. This estimate, which accounts for about 70 percent of the total risk from TACs, included both urban and rural areas in the state. The estimate can also be considered an average worst -case for the state, since it assumes constant exposure to outdoor concentrations of diesel exhaust and does not account for expected lower concentrations indoors, where most of time is spent. EXPOSURE ASSESSMENT Dispersion is the process by which atmospheric pollutants disseminate due to wind and vertical stability. The results of a dispersion analysis are used to assess pollutant concentrations at or near an emission source. The results of an analysis allow predicted concentrations of pollutants to be compared directly to air quality standards and other criteria such as health risks based on modeled concentrations. Dispersion Modeling Approach This section presents the methodology used for the dispersion modeling analysis. This section addresses all of the fundamental components of an air dispersion modeling analysis including: • Model selection and options • Receptor locations • Meteorological data 3 California Air Resources Board. Risk Reduction Plan to Reduce Particulate Matter Emissions from Diesel - Fueled Engines and Vehicles. October 2000. http: / /www.arb.ca.gov /diesel /documents /rrpfinal.pdf 4 California Air Resources Board. Risk Management Guidance for the Permitting ofNew Stationary Diesel - Fueled Engines. October 2000. http: / /www.arb.ca.gov /diesel /documents /rmgfinal.pdf M • Source release characteristics Air dispersion modeling was performed to estimate the downwind dispersion of DPM exhaust emissions resulting from construction activities and rail operations. A description of the air quality modeling parameters, including air dispersion model selection, modeling domain, source exhaust parameters, meteorological data selection, and receptor network, is provided. Model Selection and Options AERMOD (Version 14134)5 was used for the dispersion analysis. AERMOD is the USEPA preferred atmospheric dispersion modeling system for general industrial sources. The model can simulate point, area, volume, and line sources. AERMOD is the appropriate model for this analysis based on the coverage of simple, intermediate, and complex terrain. It also predicts both short -term and long -term (annual) average concentrations. The model was executed using the regulatory default options (stack -tip downwash, buoyancy- induced dispersion, and final plume rise), default wind speed profile categories, default potential temperature gradients, and assuming no pollutant decay. The selection of the appropriate dispersion coefficients depends on the land use within three kilometers (km) of the Project site. The types of land use were based on the classification method defined by Auer (1978); using pertinent United States Geological Survey (USGS) 1:24,000 scale (7.5 minute) topographic maps of the area. If the Auer land use types of heavy industrial, light - to- moderate industrial, commercial, and compact residential account for 50 percent or more of the total area, the USEPA Guideline on Air Quality Models recommends using urban dispersion coefficients; otherwise, the appropriate rural coefficients can be used. Based on observation of the area surrounding the project site, rural (urban is only designated within dense city centers such as downtown San Francisco) dispersion coefficients were applied in the analysis. Receptor Locations Some receptors are considered more sensitive to air pollutants than others, because of preexisting health problems, proximity to the emissions source, or duration of exposure to air pollutants. Land uses such as primary and secondary schools, hospitals, and convalescent homes are considered to be relatively sensitive to poor air quality because the very young, the old, and the infirm are more susceptible to respiratory infections and other air quality- related health problems than the general public. Residential areas are also considered sensitive to poor air quality because people in residential areas are often at home for extended periods. Recreational land uses are moderately sensitive to air pollution because vigorous exercise associated with recreation places having a high demand on respiratory system function. Sensitive receptors such as residences, schools, and outdoor recreational areas near the Project were chosen as the receptors to be analyzed. The project property is generally bound by commercial and light industrial to the east, along Cypress Avenue and Airport Boulevard, and 5 US Environmental Protection Agency, AERMOD Modeling System, hlW: / /www.epa.gov /scram001 /dispersion prefrec.htm. 467 immediately south of the proposed project. Multifamily and single residential is located to the north, west, and south of the proposed project. These residential units tend to be one to three story structures. The nearest existing residential land uses are within 100 feet to the north and within adjacent properties to the west of the project site. No schools are located within 1,000 feet of the proposed project. Receptors were placed at a height of 1.8 meters (typical breathing height). Terrain elevations for receptor locations were used (i.e., complex terrain) based on available USGS information for the area. Figure B -1 displays the location of the sensitive receptors used in the HRA. Sensitive receptors were placed at existing residences and schools to estimate health impacts due to proposed project construction on existing receptors. Sensitive receptors were also placed at the proposed project to estimate health impacts on new residences from existing sources such as the CalTrains operations and Highway 101. Meteorological Data Air quality is a function of both the rate and location of pollutant emissions under the influence of meteorological conditions and topographic features affecting pollutant movement and dispersal. Atmospheric conditions such as wind speed, wind direction, atmospheric stability, and air temperature gradients interact with the physical features of the landscape to determine the movement and dispersal of air pollutants, and consequently affect air quality. Hourly meteorological data from San Francisco International Airport (surface data), located approximately 2.0 miles to the south of the Project, and Oakland International Airport (upper air) were used in the dispersion modeling analysis. Meteorological data from 2010 through 2014 were used. Exhibit B -2 displays the wind rose during this period. Wind directions are predominately from the west and northwest with a high frequency of calm and low wind conditions, as shown in Exhibit B -3. The regional average annual wind speed is 10.7 miles per hour. E.: r-I W 7 G.7 W a O H a w U W H Z W W Q x x x H a Q w x UO Ell FIGURE B -2 470 FIGURE B -3 WIND SPEED DISTRIBUTION FOR SAN FRANCISCO INTERNATIONAL AIRPORT 471 Source Release Characteristics Construction equipment activities were treated as an area source. The release height of the off - road equipment exhaust was 3.05 meters. Haul trucks and employee trips were treated as a line source (i.e., volume sources placed at regular intervals) located along the access road. The haul trucks were assigned a release height of 3.05 meters and an initial vertical dimension of 4.15 meters, which accounts for dispersion from the movement of vehicles. Model parameters for volume sources include emission rate, release height, and plume width. Locomotive line haul activities for the CalTrains were simulated as volume sources with a release height of five meters, and a plume width of eight meters. Terrain elevations for emission source locations were used (i.e., complex terrain) based on available USGS DEM for the area. AERMAP (Version 11103 )6 was used to develop the terrain elevations, although the project site is generally flat. Temporal factors (Table B -1) are used to describe the relationship of activity levels in one period of time to another period of time (i.e., the relationship of the activity during one -hour to the activity during a 24 -hour period). The use of temporal factors gives the model the ability to more accurately reflect real world conditions. Table B -1: CalTrains Emission Source Temporal Distribution Hour Ending Weekday Weekend 1 0.10 0.10 2 0.00 0.00 3 0.00 0.00 4 0.00 0.00 5 0.00 0.00 6 0.30 0.00 7 0.50 0.00 8 1.00 0.00 9 1.00 0.20 10 0.70 0.20 11 0.30 0.20 12 0.20 0.30 13 0.20 0.30 14 0.20 0.20 15 0.30 0.20 16 0.40 0.20 17 0.60 0.20 18 1.00 0.20 19 1.00 0.40 20 0.60 0.20 21 0.30 0.20 22 0.20 0.20 23 0.20 0.20 24 0.10 0.10 SOURCE: CalTrains Schedule of Service, htt p:// www.caltraiii.com /scliedules/PDF Sc Railroad operations are typically described in terms of two different types of operation, line haul and switching. Line haul operations involve long - distance transportation along a route whereas 6 US Environmental Protection Agency, AERMAP, http:// www.ga.gov /ttn/scram/dispersion related. htm#aen- a . 472 switching is the local movement of railcars to prepare them for line haul transportation or to distribute them to destination terminals upon their arrival. Along the route near the project site, no switching operations were assumed. Published emissions information7 for line haul locomotive operations in both throttle notch and fuel consumption modes along with scheduled operational data was used to estimate emissions. Locomotives operate differently from other types of mobile sources with respect to how they transmit power from engine to wheels. While most mobile sources use a physical coupling such as a transmission to transfer power from the engine to the wheels, a locomotive's engine turns a generator or alternator powering an electric motor that, in turn, powers the locomotive's wheels. The physical connection of a typical mobile source means that the engine's speed is dictated by the vehicle's speed through a fixed set of gear ratios, resulting in the highly transient operating conditions (particularly engine speed and load) that characterize mobile source operations. In contrast, the locomotive's engine and drive system operate more independently, such that the engine can be operated at a particular speed without respect to the speed of the locomotive itself. This allows operation under more steady -state load and speed conditions, and as a result locomotives have been designed to operate in a series of discrete throttle settings called notches, ranging from notch positions one through eight, plus an idle position. Line haul locomotives are typically operated in groups of two to five units, with three or four units being most common, depending on the power requirements of the specific train being pulled and the horsepower capacities of available locomotives. Thus, two higher- horsepower locomotives may be able to pull a train that would take three units with lower power outputs. Locomotives operated in sets are connected such that every engine in the set is operated in unison by an engineer in one of the locomotives. Based on the CalTrains Schedule of Service, the air quality analysis included 76 daily rail (average per week) operations (northbound and southbound).$ An additional 20 rail operations were included to account for other rail operators such as Union Pacific and Amtrak. One line haul engine were assumed to operate for the CalTrains route. Emission estimates were estimated for the CalTrains activities. For locomotives, emissions were estimated as a function of power demand (expressed in horsepower- hours) multiplied by an emission factor (shown in Table B -2), expressed in terms of grams per horsepower -hour (g/hp- hour), and then applied to the various activity data (Table B -3). Estimate emission efficiency improvements were accounted for to determine the average exposure during a lifetime (Table B- 4). Of note, CalTrains is expected to replace diesel locomotives sometime after 2017. Thus, emission estimates are likely to be conservative by assuming diesel locomotive would operate throughout the period. 7 U.S. Environmental Protection Agency. Emission Factors for Locomotives. April 2009. 1-ittp:// www. epa. gov /nonroad /locomoty /420tO9025.pdf 8 CalTrains Schedule of Service, http: // www. caltrain. com /schedules/PDF ®Schedules.html 473 Table B -2: Emission Factors for Locomotives Haul Emission Factor Pollutant (g /hp -hour) PM10 0.18 PM2s 0.17 SOURCE: U.S. Environmental Protection Agency. Emission Factors for Locomotives, April 2009. Table B -3: Operational Assumptions for Locomotives Parameters Line Haul Load Factor 0.20 Horsepower 3,300 Daily Operations 96 SOURCE: CalTrains Schedule of Service, lit tp. Table B-4: PM10 Emission Factors for Locomotives by Year 474 Haul Emission Factor Year (g /gal) 2006 6.4 2007 6.3 2008 5.1 2009 4.9 2010 4.7 2011 4.4 2012 4.1 2013 3.8 2014 3.6 2015 3.4 2016 3.1 2017 2.9 2018 2.7 2019 2.5 2020 2.3 2021 2.2 2022 2.0 2023 1.9 2024 1.7 2025 1.6 2026 1.5 2027 1.4 2028 1.3 2029 1.1 2030 1.0 2031 1.0 2032 0.9 2033 0.8 2034 0.7 2035 0.7 2036 0.6 2037 0.6 474 2038 0.5 2039 0.5 2040 0.4 SOURCE: U.S. Environmental Protection Agency. Emission Factors for Locomotives, April 2009. Dispersion Modeling Results Using AERMOD, the maximum annual and 70 -year average annual concentrations were determined for DPM emissions for the emission sources of concern. These concentrations were estimated for a unit emission rate (1 gram per second) and adjusted based on the calculated emission rate. The HRA was conducted following methodologies in BAAQMD's Health Risk Screening Analysis Guidelines and OEHHA's Air Toxics Hot Spots Program Guidance10. This was accomplished by applying the highest estimated concentrations at the receptors analyzed to the established cancer risk estimates and acceptable reference concentrations (RfC) for non - cancer health effects. The toxicity values used in this analysis were based on OEHHA guidance. These toxicity values are for carcinogenic effects and acute /chronic health impacts. The primary pathway for exposures was assumed to be inhalation and carcinogenic and non - carcinogenic effects were evaluated separately. The incremental risks were determined for each emission source of TAC and summed to obtain an estimated total incremental carcinogenic health risk. The 801' percentile adult breathing rate of 302 liters per kilogram per day (L /kg -day) was used to determine cancer risks to residents from exposure to TAC. The residential exposure frequency and duration was assumed to be 350 days per year and 70 years. For children, OEHHA recommends assuming a breathing rate of 581 L /kg -day to assess potential risk via the inhalation exposure pathway. This value represents the upper 95th percentile of daily breathing rates for children. The modeled DPM concentrations were used to represent the exposure concentrations in the air. The inhalation absorption factor was assumed to be 1. Cancer risk estimates also incorporate age sensitivity factors (ASFs). This approach provides updated calculation procedures that factor in the increased susceptibility of infants and children to carcinogens as compared to adults. OEHHA recommends that cancer risks be weighted by a factor of 10 for exposures that occur from the third trimester of pregnancy to 2 years of age, and by a factor of 3 for exposures from 2 years through 15 years of age. For estimating cancer risks for residential receptors over a 70 year lifetime, the incorporation of the ASFs results in a cancer risk adjustment factor (CRAF) of 1.7. 9 Bay Area Air Quality Management District, 2005. BAAQMD Health Risk Screening Analysis Guidelines, June 2005, http: / /www.baacimd.gov /bmt/air txics /risk procedures policies /hrsa guidelines. pd . 10 Office of Environmental Health Hazard Assessment, 2003. Air Toxics Hot Spots Program Guidance Manual for Preparation ofHealth Risk Assessments, http: / /www.oehha.org/ air /hot spots /pdf/HRAgttidefinal.pdf. 475 For occupational receptors, BAAQMD guidance suggests that the exposure be based on 8 hours per day, 5 days per week, 245 working days per year, and a 40 -year working lifetime. This is a conservative assumption, since most people do not remain at the same job for 40 years. Based on OEHHA recommendations (see Table B -5), the cancer risk to residential receptors assumes exposure occurs 24 hours per day for 350 days per year. For children at school sites, exposure is assumed to occur 10 hours per day for 180 days (or 36 weeks) per year. Cancer risk to residential receptors based on a 70 -year lifetime exposure. Cancer risk estimates for children at school sites are calculated based on 9 year exposure duration. Table 13-5: Health Risk Assessment Exposure Parameters SOURCE: Bay Area Air Quality Management District, Health Risk Screening Analysis Guidelines, June 2005, httL): / /www.baagmd.gov /pmt /air toxics /risk procedures policies /hrsa guidelines.pdf. RISK CHARACTERIZATION Cancer risk is defined as the lifetime probability of developing cancer from exposure to carcinogenic substances. Cancer risks are expressed as the chance in one million of getting cancer (i.e., number of cancer cases among one million people exposed). The cancer risks are assumed to occur exclusively through the inhalation pathway. The cancer risk can be estimated by using the cancer potency factor (milligrams per kilogram of body weight per day [mg/kg- day]), the 70 -year annual average concentration (microgram per cubic meter [[tg/m3]), and the lifetime exposure adjustment. Following guidelines established by OEHHA, the incremental cancer risks attributable to the Project were calculated by applying exposure parameters to modeled DPM concentrations in order to determine the inhalation dose (mg/kg -day) or the amount of pollutants inhaled per body weight mass per day. The cancer risks occur exclusively through the inhalation pathway; therefore, the cancer risks can be estimated from the following equation: Where: Dose -inh = Cair * {DBR} * A * CRAF * EF * ED * 10 -6 AT Dose -inh = Dose of the toxic substance through inhalation in mg/kg -day 10 -6 = Micrograms to milligrams conversion, Liters to cubic meters conversion Cair = Concentration in air in microgram (µg) /cubic meter (m3) {DBR} = Daily breathing rate in liter (L) /kg body weight — day 476 Cancer Risk Breathing Adjustment Daily Annual Exposure Receptor Rate (DBR) Factor (CRAF) Exposure Exposure Duration (ED) Adult 302 1.7 24 hours 350 days 70 years Child 581 10 24 hours 350 days 3 years School 581 3 10 hours 180 days 9 years SOURCE: Bay Area Air Quality Management District, Health Risk Screening Analysis Guidelines, June 2005, httL): / /www.baagmd.gov /pmt /air toxics /risk procedures policies /hrsa guidelines.pdf. RISK CHARACTERIZATION Cancer risk is defined as the lifetime probability of developing cancer from exposure to carcinogenic substances. Cancer risks are expressed as the chance in one million of getting cancer (i.e., number of cancer cases among one million people exposed). The cancer risks are assumed to occur exclusively through the inhalation pathway. The cancer risk can be estimated by using the cancer potency factor (milligrams per kilogram of body weight per day [mg/kg- day]), the 70 -year annual average concentration (microgram per cubic meter [[tg/m3]), and the lifetime exposure adjustment. Following guidelines established by OEHHA, the incremental cancer risks attributable to the Project were calculated by applying exposure parameters to modeled DPM concentrations in order to determine the inhalation dose (mg/kg -day) or the amount of pollutants inhaled per body weight mass per day. The cancer risks occur exclusively through the inhalation pathway; therefore, the cancer risks can be estimated from the following equation: Where: Dose -inh = Cair * {DBR} * A * CRAF * EF * ED * 10 -6 AT Dose -inh = Dose of the toxic substance through inhalation in mg/kg -day 10 -6 = Micrograms to milligrams conversion, Liters to cubic meters conversion Cair = Concentration in air in microgram (µg) /cubic meter (m3) {DBR} = Daily breathing rate in liter (L) /kg body weight — day 476 A = Inhalation absorption factor CRAF = Cancer Risk Adjustment Factor, Age Sensitivity Factor EF = Exposure frequency (days /year) ED = Exposure duration (years) AT = Averaging time period over which exposure is averaged in days (25,550 days for a 70 year cancer risk) To determine incremental cancer risk, the estimated inhalation dose attributed to the Project was multiplied by the cancer potency slope factor (cancer risk per mg/kg -day). The cancer potency slope factor is the upper bound on the increased cancer risk from a lifetime exposure to a pollutant. These slope factors are based on epidemiological studies and are different values for different pollutants. This allows the estimated inhalation dose to be equated to a cancer risk. Non - cancer adverse health impacts, acute (short -term) and chronic (long - term), are measured against a hazard index (HI), which is defined as the ratio of the predicted incremental exposure concentration from the Project to a published reference exposure level (REL) that could cause adverse health effects as established by OEHHA. The ratio (referred to as the Hazard Quotient [HQ]) of each non - carcinogenic substance that affects a certain organ system is added to produce an overall HI for that organ system. The overall HI is calculated for each organ system. If the overall HI for the highest- impacted organ system is greater than one, then the impact is considered to be significant. The HI is an expression used for the potential for non - cancer health effects. The relationship for the non - cancer health effects is given by the annual concentration (in µg /m3) and the REL (in µg/m3). The acute hazard index was determined using the "simple" concurrent maximum approach, which tends to be conservative (i.e., overpredicts). The relationship for the non - cancer health effects is given by the following equation: Where: HI = C /REL HI = Hazard index; an expression of the potential for non - cancer health effects. C = Annual average concentration (µg /m3) during the 70 year exposure period. REL = Concentration at which no adverse health effects are anticipated. The chronic REL for DPM was established by the California OEHHAii as 5 µg /m3. There is no acute REL for DPM. However, diesel exhaust does contain acrolein and other compounds, which do have an acute REL. BAAQMD's DPM speciation table (based on profile 4674 within the USEPA Speciate 4.2) 12 was used to assess the acute impacts. Acrolein emissions are California Office of Environmental Health Hazards Assessment Toxicity Criteria Database, 2010, hlW://www.oehha.cL.gov//. 12 Provides for a speciation faction of 1.3 percent of acrolein per DPM emission rate, http: / /www.ga.gov / / / /.html. 477 approximately 1.3 percent of the total emissions. The acute REL for acrolein was established by the California OEHHA13 as 2.5 µg /m3. CUMULATIVE SOURCES The BAAQMD's CEQA Air Quality Guidelines include standards and methods for determining the significance of cumulative health risk impacts.14 The method for determining cumulative health risk requires the tallying of health risk from permitted sources and major roadways in the vicinity of a project (i.e., within a 1,000 -foot radius of the location of the new project - related receptors), then adding the Project impacts to determine whether the cumulative health risk thresholds are exceeded. BAAQMD has developed a geo- referenced database of permitted emissions sources throughout the San Francisco Bay Area, and has developed the Stationary Source Risk & Hazard Analysis Tool for estimating cumulative health risks from permitted sources. Six permitted sources are located within 1,000 feet of the Project impact area. Table B -6 provides the estimated screening cancer risk, hazard impacts, and the PM2.5 concentrations for the cumulative permitted source in association with existing receptors. Table B -7 provides the estimated screening cancer risk, hazard impacts, and the PM2.5 concentrations for the cumulative permitted source in association with proposed receptors. Table 13-6: Cumulative Health Impacts for Existing Receptors — Permitted Sources Facility Adjustment Cancer Hazard PM2.5 # Facility Type Address Factor Risk Impact Concentration G11137 Chino's Service Station 401 Linden Ave 0.071 0.41 <0.01 - Replaced equipment with Petroleum machine. No 4316 Wright Cleaners 316 Grand Ave - risk or concentration. Unocal 41026 Grand G9214 Martco 221 Airport Blvd 0.029 0.43 <0.01 - Facility closed September of 2010. No 14612 Central Cleaners 386 Grand Ave - risk/concentration. 16678 Harbor Auto Body 512 Cypress Ave - No risk/concentration. No further study needed. 15132 NOD Auto Body Shop 296 Baden Ave - No risk/concentration. No further study needed. SOURCE: Email from Alison Kirk at BAAQMD on April 15, 2015 - 48 Linden Avenue Stationary Source Inquiry Form. 13 California Office of Environmental Health Hazards Assessment Toxicity Criteria Database, 2010, hlW://www.oehha.cL.gov//. 14 Bay Area Air Quality Management District. CEQA Air Quality Guidelines. May 2012. hlW: / /www.baagmd.gov /—/ media / Files / Planning% 20and% 2OResearch /CEQABAAQMD %2OCEQA %2OGuidelines Final May %202012.ashx ?la =en EM Table 13-7: Cumulative Health Impacts for Proposed Receptors — Permitted Sources Facility Adjustment Cancer Hazard PM2.5 # Facility Type Address Factor Risk Impact Concentration G11137 Chino's Service Station 401 Linden Ave 0.225 1.30 <0.01 - Replaced equipment with Petroleum machine. No 4316 Wright Cleaners 316 Grand Ave - risk or concentration. Unocal 41026 Grand G9214 Martco 221 Airport Blvd 0.022 0.32 <0.01 - Facility closed September of 2010. No 14612 Central Cleaners 386 Grand Ave - risk/concentration. 16678 Harbor Auto Body 512 Cypress Ave - No risk/concentration. No further study needed. 15132 NOD Auto Body Shop 296 Baden Ave - No risk/concentration. No further study needed. SOURCE: Email from Alison Kirk at BAAQMD on April 15, 2015 - 48 Linden Avenue Stationary Source Inquiry Form. Information (cancer risks and chronic index) was adjusted for distance from source to receptor, based on BAAQMD's Distance Adjustment Multiplier for Gas Station. BAAQMD has also developed a geo- referenced database of roadways throughout the San Francisco Bay Area and has developed the Highway Screening Analysis Tool for estimating cumulative health risks from roadways. US 101 is located 725 feet to the east of the Project site (new residences) and is located 630 feet from existing residences. Table B -8 display the health impacts from US 101 at a height of 6 feet above ground; representing ground floor occupants. Table B -9 display the health impacts from US 101 at a height of 20 feet above ground; representing above ground floor occupants. As shown, the health impacts from US 101 decrease the higher above the ground floor of the Project. BAAQMD CEQA Air Quality Guidelines also require the inclusion of surface streets within 1,000 feet of the Project with annual average daily traffic of 10,000 or greater. 15 Upon review of nearby roadways, Grand Avenue, Linden Avenue, and Airport Boulevard meets the criteria. 15 Bay Area Air Quality Management District County Surface Street Screening Tables, May 2011 and C E H T P Traffic Linkage Service Demonstration, hlW: / /www.ehib.org/traffic toolJsp. 479 Table B -8: US 101 Health Impacts at 6 Feet Above Ground Distance from Nearest Travel Lane Cancer Chronic Acute PM2.5 (feet) Risk Impact Impact Concentration 10 42.9 0.042 0.039 0.385 25 35.8 0.035 0.034 0.321 50 28.4 0.027 0.028 0.255 75 23.8 0.023 0.024 0.214 100 20.7 0.020 0.021 0.185 200 13.9 0.013 0.014 0.124 300 10.8 0.010 0.011 0.096 400 8.86 0.008 0.009 0.079 500 7.60 0.007 0.008 0.068 750 5.74 0.005 0.006 0.051 1000 4.64 0.004 0.005 0.041 SOURCE: BAAQMD Highway Screening Analysis Tool, May 2011. Table B -9: US 101 Health Impacts at 20 Feet Above Ground Distance from Nearest Travel Lane Cancer Chronic Acute PM2.5 (feet) Risk Impact Impact Concentration 10 24.4 0.023 0.032 0.218 25 23.4 0.022 0.029 0.209 50 21.4 0.021 0.025 0.192 75 19.4 0.019 0.022 0.174 100 17.7 0.017 0.019 0.158 200 12.9 0.012 0.013 0.116 300 10.3 0.010 0.010 0.092 400 8.58 0.008 0.009 0.077 500 7.42 0.007 0.008 0.066 750 5.65 0.005 0.006 0.050 1000 4.59 0.004 0.005 0.041 SOURCE: BAAQMD Highway Screening Analysis Tool, May 2011 I'1 Attachment 8.c Final Mitigation Monitoring and Reporting Program from DSASP EIR .• Final EIR CHAPTER 11 Mitigation Monitoring and Reporting Program January 2015 SECTION 11.1 Introduction 11.1 INTRODUCTION The Final Environmental Impact Report for the South San Francisco Downtown Station Area Specific Plan Project (State Clearinghouse No. 2013102001 identified mitigation measures to reduce the adverse effects of the proposed project in the areas of air quality, biological resources, cultural resources, greenhouse gas emissions, hazards and hazardous materials, noise, public services, recreation, and transportation/ traffic. The California Environmental Quality Act (CEQA) requires that agencies adopting environmental impact reports ascertain that feasible mitigation measures are implemented, subsequent to project approval. Specifically, the lead or responsible agency must adopt a reporting or monitoring program for mitigation measures incorporated into a project or imposed as conditions of approval. The program must be designed to ensure compliance during applicable project timing, e.g. design, construction, or operation (Public Resources Code Section 21081.6). The Mitigation Monitoring and Reporting Program (MMRP) will be used by City of South San Francisco staff responsible for ensuring compliance with mitigation measures associated with the proposed Plan. Monitoring will consist of review of appropriate documentation, such as plans or reports prepared by the party responsible for implementation or by field observation of the mitigation measure during implementation. 11.2 MITIGATION MONITORING AND REPORTING PROGRAM VIV -111;1 /:1 Table 11 -1 (Mitigation Monitoring and Reporting Program Matrix) identifies the mitigation measures by resource area. The table also provides the specific mitigation monitoring requirements, including implementation documentation, monitoring activity, timing and responsible monitoring party. Verification of compliance with each measure is to be indicated by signature of the mitigation monitor, together with date of verification. 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Q- N � C � a a � rn c c •c c 0.2 O c o o c� camc_ C C N L Z w U Q ~ S w U � H w W W W Z O H Z W H Z W C7 o c U N U E C � O a C (D �C) c o E O a r O o T > 0 Un T C D E E O U C U O C O U w w C U �U N Q O N Q C O C 3 0 c 3 O 0 O o U O U N C O O co � O C N O C- o U V) V) Attachment 9 Power Point Presentation 500 a y, U J m i u, ,a µii ,44 f In, In, N O r r r OI fl �� N. m Ila) �Owl \�( . \�� > }�( \�� > � / \ �( ,'I- � � � Q V) � � � y, u is L N L O U V) V) a� Q U ca 05 V O .05 a� w a� Q V) V) 0— U c .4-J 05 CL 0 �4 Iv �� to a- u u lZF1, r rn 0 c c a 0 1 r% ry b N F � �� x II IV'* ` 1"0 00 N "2 > Q m N r J � O I u f s i m r rn 0 a CN 0 L q 0. -; -; 0; L. 0 "', E E 4-J U o 4-J M� . x m CL E 0 Q) > CL 0 0 o m r rn 0 a CN 0 p K� IY s w >0% .����uu�llllllllllllllluu����� v► v► w r rn 0 a 0 �I T r rl rl ,„ �; ; d fl �� w � ....�' ,V;,,, , ��,, ��t �� �; �, ,. ,, ,,,, �� N „, Vr' �, �� oo }�) � � 2 � }Adak"( . s � � \ }�) � � 2 � DATE: December 9, 2015 TO. Chair and Successor Agency Board FROM: Alex Greenwood, Economic and Community Development Director i SUBJECT: APPROVAL OF A LICENSE AGREEMENT ALLOWING PG &E TO TEMPORARILY USE A VACANT PROPERTY ON ANTOINETTE LANE FOR A CONTRACTOR OFFICE, STAGING AREA AND EMPLOYEE PARKING It]*4141a10141121 Sam Y[N�►`I It is recommended that the 'Successor Agency approve, and recommend that the Oversight Board approve the attached draft License Agreement with PG&E to temporarily use the vacant site on Antoinette Lane for a contractor office, staging area and employee parking, for the period from March 1, 2016 through December 31, 2016. BACKGROUND /DISCUSSION Pacific Gas and Electric (PG &E) is requesting that the Successor Agency grant a license for PG &E staff and contractors to use the vacant, unimproved property on Antoinette Lane, totaling 72,200 square feet, for use as a contractor office, a staging area and employee parking (See Exhibit B in the License Agreement). PG&E is proposing to use the vacant property from March 1, 2016 to December 31, 2016 in order to complete the Line 132 gas pipeline replacement project. PG &E is requesting use of the site in order to complete construction of an important upgrade to the existing gas pipeline system on the 'San Francisco Peninsula. In 2010, a portion of Line 132 was responsible for the destruction of a neighborhood in San Bruno. After the disaster, PG &E was tasked with surveying, inspecting and upgrading the pipeline Tong the entire route. In South San Francisco, the pipeline running from San Bruno to Colma, generally follows along El Camino Real to Antoinette Lane then Mission Road. In 2011, PG &E inspected the pipeline and found leaks in the pipe on Antoinette Lane and Mission Road, between Colma Creek to La ndale Drive. Between 2011 and 2014, . PG&E made a combination of temporary repairs and temporary pipeline replacement for segments of the pipe so that South San Francisco residents could receive gas service during the winter months. This year, PG &E identified an additional segment of the pipe that requires replacement. This segment involves the installation of 700 feet of 30 -inch pipe under Antoinette Lane, north of Chestnut Avenue. PG&E's staff and contractors would use the staging area to complete work on the gas pipeline north of Chestnut Avenue. Long Mange Property Management Plan On October 1, 2015, the California Department of Finance approved the Successor Agency's Long Staff Report Subject: Approval of a License Agreement Allowing PG&E to Temporarily Use a Vacant Property on Antoinette Lane for a Contractor Office, Staging Area and Employee Parking Page 2 Range Property Management Plan (LRPMP), which includes the subject site. It is anticipated that the site will be marketed and developed for transit oriented residential uses in 2016. The process will take at least one year. The proposed use of the property is temporary only and would upgrade a gas line that serves residents in South San Francisco and the San Francisco Peninsula. The proposed use would not impede the development goals approved in the LRPMP. Proposed Rent PG&E has agreed to pay a monthly rent of $9,386.00 for the use of site as a construction office, staging area and employee parking. The rent is based on comparable rents for similar temporary uses found in South San Francisco's industrial and commercial areas, which is estimated to be $0.13 per square feet for unimproved vacant land. The rent for the vacant and the unimproved site on Antoinette Lane is the same as the rent paid by PG&E in 2014 for a similar unimproved vacant site on Mission Road. CONCLUSION It is recommended that the Successor Agency approve, and recommend that the Oversight Board approve the attached draft License Agreement with PG&E to temporarily use the vacant site on Antoinette Lane for a contractor office, staging area and employee parking for the period from March 1, 2016 through December 31, 2016, By: l" Approved: Alex Greenwood Mike Futrell Economic and Community ,Executive Diregfor Development Director Attachments: 1, Resolution 2. Draft License Agreement, with Exhibits Pi RESOLUTION NO. SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO RESOLUTION APPROVING AND RECOMMENDING THAT THE OVERSIGHT BOARD APPROVE A LICENSE AGREEMENT WITH PACIFIC GAS & ELECTRIC, A CALIFORNIA CORPORATION, FOR VACANT, UNIMPROVED SITE ON ANTOINETTE LANE (APN 93 -312- 050) IN SOUTH SAN FRANCISCO WHEREAS, on January 31, 2008, the City of South San Francisco ("City") acquired that certain real property located a vacant, unimproved site on Antoinette Lane, identified as APN 093-312-050, in South San Francisco, California ("Property") from the Redevelopment Agency of the City of South San Francisco ("Agency"). Pursuant to Health and Safety Code Section 34167.5, the State Controller may deem such transfer to have been unauthorized, resulting instead to a transfer to the Successor Agency by operation of law, In any event, the City will likely convey the Property to the Successor Agency if necessary; and WHEREAS, pursuant to City Council Resolution No, 08-2012, adopted January 25, 2012, the City affirmed its agreement to serve as the Successor Agency to the Agency, pursuant to Health and Safety Code Section 34173; and WHEREAS, pursuant to City Council Resolution No. -2012, adopted 2012, in accordance with Health and Safety Code Section 34173(g), as added by Assembly Bill 1484, the City established the Successor Agency as an entity separate and distinct from the City; and WHEREAS, in November 2013, Oversight Board adopted the Long Range Property Management Plan (LRPMP), which includes the subject site and the California Department of Finance approved the LRPMP on October 1, 2015; and WHEREAS, the site is part of the former PUC properties that are zoned according to a blend of development intensity as dictated by the El Camino Real/Chestnut Avenue Land Use Plan; and, WHEREAS, on November 4, 2015, Pacific Gas & Electric Company (PG&E) submitted a letter to the Successor Agency and the Oversight Board staff requesting that the Successor Agency and the Oversight Board approve a License Agreement for a contractor office, staging area and employee parking for the period from March 1, 2016 through December 31, 2016; and WHEREAS, Staff and PG&E's representative have negotiated a License Agreement that is consistent with the; and WHEREAS, the proposed use is temporary only and would not impede the goals of the Oversight Board to develop the area as approved in the LRPMP; and, WHEREAS, the Successor Agency has considered the term s of the Lease Agreement, which is for a term of three years with a one -year opticsn for extension, at a duly - noticed public meetings and WHEREAS, the Successor Agency recommends that the Oversight Board approve the Lease Agreement, NOW, THEREFORE, the Successor Agency to the Redevelopment Agency of the City of South San Francisco does hereby resolve as follows: 1. The Recitals set forth above are true and correct, and are incorporated herein by reference. 2. The Recitals set forth above are true and correct, and are incorporated herein by reference. 3. The License Agreement between the Successor Agency and Pacific Gas & Electric for vacant, unimproved property on Antoinette Lane, in the form on file with the City Clerk, is hereby approved. 4. Staff is directed to transmit this Resolution and the Lease Agreement, and related information to the State Department of Finance in accordance with Assembly Bill xl 26, as modified by Assembly Bill 1484. I hereby certify that the foregoing Resolution was regularly introduced and adopted by the governing board of the Successor Agency to the Redevelopment Agency of the City of South San Francisco at a meeting held on the day of December, 2015 by the following vote: APES: NOES: ABSTAIN: ABSENT. ATTEST: 2012 358.1 City Clerk P2 P3 LICENSE AGREEMENT EI T This License Agreement (this "agreement" or `.`License ") is entered into effective as of :March 1, 2016 ("Effective Date ") by and between the Successor Agency to the Redevelopment Agency of the City of South San Francisco, a public entity (the "Successor Agency ") and Pacific Gas and Electric Company, a California Corporation (the "Licensee"). Successor Agency and Licensee are hereinafter collectively referred to as the "Parties." w A. Successor Agency is the owner of that certain real profserty located at Antoinette Lane, City of South San Francisco, mown as San Mateo County Assessor's Parcel No. 093 -312- 050 and more particularly described in Exhibit A attached hereto (the "Property"). C. Licensee is engaged in a construction and repair project relating to the existing gas line project on land located adjacent to the Property, and desires to obtain a license from Successor Agency to use the Vacant Lot for a construction staging area, construction office, and employee and contractor parking, The portion of the Antoinette Lane property for which a license is granted pursuant to this Agreement (the " Licensed ]Premises ") is described in Exhibit B attached hereto. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: 1. Grant of License; License Fee; No Leasehold or Property Rights Created. Successor Agency hereby grants to Licensee a revocable license to use the Licensed Premises solely for use as a construction staging area, construction office, and employee and contractor parking (collectively, the "permitted activity "), undertaken in compliance with the conditions of approval set forth in Exhibit D attached hereto and the Conditions of Use set forth in Section. 4 below. Subject to adjustment pursuant to Section 2.1 below, on or before the first day of each calendar month during the term of this Agreement, Licensee shall pay to Successor Agency a fee (the "License Fee ") in the amount of Nine Thousand, Three Hundred and Eighty -Six Dollars ($9,386.00) per month. For any partial month at the beginning or end of the term of this Agreement, the License Fee shall be prorated on the basis of a 30 -day month. This Agreement is not intended to nor shall it be interpreted to create or vest in Licensee any leasehold or any other property rights or interests in the Property or the improvements located thereon, or any part thereof. 1.1 Late Charge. Licensee acknowledges that the late payment of the License Fee will cause Successor Agency to incur administrative costs and other damages, the exact amount of which would be impracticable or extremely difficult to ascertain. Licensee and Successor Agency agree that if Successor Agency does not receive any such payment within five (5) calendar days after such payment is due, Licensee shall pay to Successor Agency an amount equal to ten percent (10 %) of the overdue amount as a late charge for each month or partial 2119585.:1 P4 month that such amount remains unpaid. The Parties acknowledge that this late charge represents a fair and reasonable estimate of the costs that Successor Agency will incur by reason of the late payment by Licensee, but the payment of such late charge shall not excuse or cure any default by Tenant under this Agreement. The Parties further agree that the payment of late charges pursuant to this Section 1.1 and the payment of interest pursuant to Section 1.2 are distinct and separate from one another in that the payment of interest is to compensate Successor Agency for the use of Successor Agency's money by Licensee, while the payment of a late charge is to compensate Successor Agency for the additional administrative expense incurred by Successor Agency in handling and processing delinquent payments, but excluding attorneys' fees and costs incurred with respect to such delinquent payments. Acceptance of any late fees and late charges shall not prevent Successor Agency from exercising any of the other rights and remedies available to Successor Agency under this Agreement for any other default by Licensee. 1.2 Interest. Any amount due from Licensee to Successor Agency which is not paid when due shall bear interest at the lesser often percent (10 %) per annurn or the maximum rate which Successor .Agency is permitted by law to charge, from the date such payment is due until paid, but the payment of such interest shall not excuse or cure any default by Licensee under this Agreement. Term of License. The term of the License and right of entry granted hereby, shall commence on the Effective Date and shall continue until December 31, 2016 (the "Termination Date ") unless Successor Agency or Licensee terminate this Agreement pursuant to Section 3 below. 2.1 Extension of Term, License Fee During Extension Period. Upon written request by Licensee delivered to Successor Agency not later than thirty (30) days prior to the expiration of the initial term of this License, Licensee may request an extension of the term. Successor Agency will not withhold consent to an extension of the term for a period of up to two (2) additional months if Licensee reasonably requires such extension in order to complete construction activities on the adjacent property. The License Fee payable during each month during such extension shall be the sum of Nine Thousand, Three hundred and Eighty -Six Dollars ($9,386.00). All other ten s and conditions of this Agreement shall apply during any extension of the term. 3. Termination of License. 3.1 Termination for Cause. Successor Agency may terminate or suspend this License by written notice to Licensee following Licensee's breach of its obligations under this Agreement if Licensee fails to cure any such breach within ten (10) days following written notice of default from the Successor Agency. 4. Conditions of Use. Licensee's right to enter upon and use the Licensed Premises is limited to the Permitted Activity (defined in Section. I above) subject to compliance with all conditions of approval set forth in Exhibit D and all conditions set forth in this Section 2.119589.1 2 PS (collectively, the "Conditions of Use "). Without limiting the foregoing, Licensee agrees to comply with all of the following specific requirements:. a. Licensee shall be liable for any damage to the Property, or any part thereof, or any improvements located thereon, or any other property of the Successor Agency or the City of South San Francisco ( "City ") or City right of way (collectively, "City Property ") that occurs as a result of this License and the use of the Licensed Premises, unless caused by the gross negligence or willful misconduct of the Successor Agency, the City, or their respective employees, agents or contractors. Any damage to the Property, the improvements located thereon, or City Property shall be immediately repaired to the satisfaction of Successor Agency or City, as applicable, at Licensee's sole cost and expense. b. Licensee shall not encroach on the public right of way adjacent to the Property. C. Licensee shall incorporate all storm water pollution control measures required by an approved storm water pollution prevention plan. Licensee shall employ adequate dust control measures to ensure that neighboring businesses and residences are not adversely impacted by Licensee's activities on the Licensed Premises. Licensee shall comply with all Conditions of Use and with all state, federal and local laves, regulations, rules and orders, applicable to this License, the Property or the Permitted Activity, including without limitation all Environmental Laws (defined in Exhibit C attached hereto and incorporated herein by reference. Licensee shall not cause or permit any Hazardous Material (defined in Exhibit C) to be generated, brought onto, used, stored, or disposed of in or about the Property. (i) Notice of Release or Investigation. If during the term of this Agreement, Licensee becomes aware of (a) any actual or threatened release of any Hazardous Material in, on, under, or about the Property, or (b) any inquiry, investigation, proceeding, or claim by any government agency or other person regarding the presence of Hazardous Material in, on, under, or about the Property, Licensee shall give Successor Agency written notice of the release or investigation within five (5) days after learning of it and shall simultaneously furnish to Successor Agency copies of any claims, notices of violation, reports, or other writings received by Licensee that concern the release or investigation. (ii) Remediation Obligations. ions. If the presence of any Hazardous Material brought onto the Property by Licensee or Licensee's agents, employees, invitees, customers, consultants, contractors or subcontractors results in contamination of the Property or any part thereof, Licensee shall promptly take all necessary actions to remove or remediate such Hazardous Materials, whether or not they are present at concentrations exceeding state or federal maximum concentration or action levels, or any governmental agency has issued a cleanup order, at Licensee's sole expense, to return the Property to the condition that existed before the introduction of such Hazardous Material. Licensee shall first obtain Successor Agency's approval of the proposed removal or remedial action. d. Licensee shall not impair or interfere with Successor Agency's ability to access the Property. 2119589.1 3 Fb e. Licensee expressly acknowledges and agrees that Successor Agency shall have no obligation to provide security services or fencing, and Licensee's use of the Licensed Premises is at Licensee's own risk. f. Licensee expressly acknowledges and agrees that Successor Agency has no obligation to maintain or repair the Property, the improvements located thereon, or the Licensed Premises, and Licensee accepts use of the Licensed Premises in its AS -IS condition. g. Licensee shall, at Licensee's sole cost and expense, maintain the Licensed Premises in its condition existing as of the Effective Date, reasonable wear and tear excepted, and shall keep the Licensed Premises in condition free of debris, litter and graffiti. Without limiting the generality of the foregoing, Licensee shall be responsible for maintaining any landscaping located on the Licensed Premises, and for undertaking at Licensee's sole expense without reimbursement, any necessary repair or resurfacing of paved surfaces on the Licensed Premises and any repair or maintenance of fencing and lighting. Licensee shall be responsible for payment of all utilities serving the Licensed Premises. Licensee shall take reasonable steps to ensure that access to the Licensed Premises is limited to Licensee and Licensee's agents, employees, contractors and subcontractors. At Licensee's sole expense without reimbursement, Licensee shall install and maintain security fencing around the perimeter of the Antoinette Lane Licensed Premises throughout the term of this Agreement. h. Successor Agency shall have the right at all times during the term of this Agreement to enter upon and to inspect the Licensed Premises to ensure compliance with this Agreement. i. Existing improvements to the Licensed premises shall be restored to existing or better condition. Improvements shall include, but not be limited to, pavement, curbs, gutters, sidewalks, storm and sanitary sewer facilities, public utilities, surface improvements, landscaping, and lighting. Licensee shall be responsible for cleanup of any contamination by regulated substances introduced to the site by Licensee's activities on the Licensed Premises. Prior to the expiration of the term of this Agreement (as such may be extended pursuant to Section 2. 1 1, at Licensee's sole cost and expense, Licensee shall remove all vehicles, equipment, materials and personal property from the Licensed Premises and shall restore the Licensed Premises to its condition existing as of the Effective Date, reasonable wear and tear excepted ("Original Condition "). If Licensee fails to comply with the foregoing, Successor Agency shall have the right to remove all vehicles, equipment, materials and personal property from the Licensed Premises and to restore the Licensed Premises to Original Condition, and Licensee shall be obligated to pay Successor Agency for all costs incurred by Successor Agency in connection with such removal and restoration within five (5) business days following receipt of Successor Agency's invoice therefor. j. All lay down and staging areas shall be fenced to prevent public access and screened from public view. Prior to storing materials on the Licensed Premises, Licensee shall, at Licensee's sole expense without reimbursement, screen from view the portion of the Licensed Premises that fronts along Antoinette Lane and the portion of the Licensed Premises 2119589.1 4 P7 that faces the Chestnut Avenue located to the south of the Property. Screening materials shall be approved by Successor, Agency, which approval will not be unreasonably withheld. k. Licensee shall coordinate with private owners adjacent to the project site to minimize impacts due to construction. Licensee shall notify all nearby residents and businesses affected by the work within 300 feet of the project site. Notifications shall include at a minimum: work hours, Licensee contact information, brief description of the work, and project duration. A copy of the notices shall be provided to the Successor Agency for review prior to distribution. 1. Use of the Property is limited to Licensee's employees, consultants and contractors and is limited to construction hours (8 a.m. through 8 p.m. Monday through Friday, unless otherwise approved by the City Engineer or authorized representative. Any weekend work shall be approved by the City Director of Public Works. Weekend hours shall comply with the SSF Municipal Code. Without limiting the generality of the foregoing, no overnight parking shall be permitted on the Property. Licensee estimates that the Parking Lot will be used for approximately thirty-five (35) vehicles during construction hours. 5. Indemnification. Licensee agrees to indemnify, defend (with counsel approved by City) and hold the City, the Successor Agency, and their respective elected and appointed officers, officials, employees, agents and representatives (all of the foregoing collectively "Indemnitees") harmless from and against all liability, loss, cost, claim, demand, action, suit, legal or administrative proceeding, penalty, deficiency, fine, damage and expense (including, without limitation, reasonable attorneys' fees and costs of litigation) (all of the foregoing collectively "Claims") resulting from or arising in connection with use of the Property or the improvements located thereon by Licensee or Licensee's agents, employees, invitees, contractors or subcontractors, including without limitation, Claims arising as a result of or in connection with any release of any Hazardous Material in, on, under or about the Property by Licensee, or Licensee's agents, employees, invitees, contractors, or subcontractors, or any other violation of any Environmental Law by Licensee or Licensee's agents, employees, invitees, contractors or subcontractors, except and to the extent caused solely by the gross negligence or willful misconduct of any of the Indemnitees. Licensee's indemnification obligations set forth in this Section 5 shall survive the expiration or earlier termination of this Agreement. 6. Release of Claims. Licensee hereby waives, releases, and discharges forever the Indernnitees from all present and future Claims arising out of or in any way connected with entry upon or use of the Property and the improvements located thereon by Licensee or Licensee's agents, employees, invitees, contractors or subcontractors, including without limitation all Claims arising in connection with any injury to persons or damage to or theft of vehicles, equipment, materials, or any other personal property, except and to the extent caused solely by the gross negligence or willful misconduct of any of the Indernnitees. The provisions of this Section 6 shall survive the expiration or earlier termination of this Agreement. 7, Insurance. Throughout the term of this License, Licensee shall maintain a 2119589.1 5 P8 commercial general liability policy in the amount of at least Two Million Dollars ($2,000,000) combined single limit, or such other policy limit as Successor Agency may require in its reasonable discretion, including coverage for bodily injury, property damage and contractual liability coverage. Such policy or policies shall be written on an occurrence basis, shall be issued by an insurance carrier licensed to do business in the State of California. with current A.M. Best's rating of no less than A: VII, and shall name the City, the Successor Agency and the Indemnitees as additional insureds. Throughout the terra of this License, Licensee shall maintain a comprehensive automobile liability coverage in the amount of at least Two Million Dollars ($2,000,000), combined single limit including coverage for owned, non -owned and leased vehicles. Automobile liability policies shall name the Indemnitees as additional insureds. Throughout the term of this License, Licensee shall maintain worker's compensation insurance in the amount required under applicable state law, covering Licensee's employees, if any, at work at the Licensed Premises or engaged in services or operations in connection with the Permitted Activity. Prior to the Effective Date, Licensee shall furnish Successor Agency with certificates of insurance in form acceptable to Successor 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 Successor Agency of any material change, cancellation, termination or non - renewal of the coverage at least thirty (30) days in advance of the effective date of any such material change, cancellation, termination or non- renewal, except in the event of non - payment of premium a ten (10) day notice will be provided. Coverage provided by Licensee shall be primary insurance and shall not be contributing with any insurance, or self- insurance maintained by City or Successor Agency, and the policies shall so provide. The insurance policies shall contain a waiver of subrogation for the benefit of the City and Successor Agency. Licensee shall provide Successor Agency with certified copies of the required insurance policies upon Successor Agency's request. S. Notices. Except as otherwise specified in this Agreement, all notices to be sent pursuant hereto shall be made in writing, and sent to the Parties at the addresses specified below, or such other address as a Party may designate by written notice delivered to the other Party in accordance with this section. All such notices shall be sent by: (a) personal delivery, in which case notice shall be deemed delivered upon receipt; (b) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered two (2) business days after deposit, postage prepaid in the United States mail; (c) nationally recognized overnight courier, in which case notice shall be deemed delivered one (1) day after deposit with such courier; or (d) facsimile transmission, in which case notice shall be deemed delivered on 2119589.1 6 P9 transmittal, provided that a transmission report is generated reflecting the accurate transmission thereof, Successor Agency : Successor Agency to the Redevelopment Agency of the City of South San ]Francisco 400 Grand Ave. South San Francisco, CA 94080 Attn: Steven T. Mattas, Interim Executive Director Telephone: (650) 877 -8500 Licensee: Pacific Gas and Electric, A California Corporation Steve McClure PG&E Land Acquisition Phone: (415) 972 -5104 Email: S5MQ @pge.com For communications relating to this Agreement, Licensee's local contact is Yoli Matranga, Bender Rosenthal Inc. telephone (916) 622 -9382. 9. Entire A regiment Amendments. This Agreement together with Exhibits A through D attached hereto and incorporated herein by reference, constitutes the entire agreement of the Parties with respect to the subject matter hereof, and supersedes all prior written or oral agreements, understandings, representations or statement with respect thereto. This Agreement may be amended only by a written instrument executed by the Parties hereto. 10. Severability. If any terra, 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 the rights and obligations of the Parties have been materially altered or abridged thereby. 11. Waiver. A waiver by either Party of the performance of any covenant or condition herein shall not invalidate this Agreement nor shall the delay or forbearance by either party in exercising any remedy or right be considered a waiver of, or an estoppel against, the later exercise of such remedy or right. No waiver of any breach of any covenant or provision of this Agreement shall be deemed a waiver of any subsequent breach of the same or any other covenant or provision hereof. No waiver shall be valid unless in writing and executed by the waiving Party. 12. Captions; Into rpretation. The section headings used herein are solely for convenience and shall not be used to interpret this Agreement. The provisions of this Agreement shall be construed as a whole according to their common meaning, and not strictly for or against any party, in order to achieve the objectives and purposes of the Parties. 13. Attorneys' fees. In any action at law or in equity, arbitration or other proceeding arising in connection with this Agreement, the prevailing party shall recover reasonable 2119589.1 7 P10 attorney's fees and other costs, including but not limited to court costs and expert and consultants' fees incurred in connection with such action, in addition to any other relief awarded. 14. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement. 15. (Governing; Law. This Agreement, and the rights and obligations of the Parties, shall be governed by and interpreted in accordance with the laws of the State of California without regard to principles of conflicts of lave. 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.. 16. No Assignment; No Third Party Beneficiaries. The rights granted hereby are personal to the Licensee and may not be transferred or assigned by operation of law or otherwise without the written consent of Successor Agency. Nothing in this Agreement is intended to or shall confer upon any person other than the Parties any rights or remedies hereunder. 17. Time is of the Essence. Time is of the essence for each condition, term, obligation and provision set forth in this Agreement. 18. Possessory Interest. Licensee acknowledges that this License may create a possessory interest subject to property taxation, and that Licensee may be subject to the payment of property taxes on such interest. SIGNATURE'S" ON FOLLOWING PAGES) 2119589.1 8 P11 IN WITNESS WHEREOF, the Parties have executed this License Agreement as of the date first written above. LICENSEE: Pacific Gas & Electric, A California Corporation By: Print Name: Title: SUCCESSOR AGENCY: SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO, a public entity M. Mike Futrell, Executive Director ATTEST: Secretary APPROVED AS TO FORM: Successor Agency Counsel 2119589.1 P12 FPacific Uag and Electric Campany' November 4, 2015 Mike Lappen, City of South San Francisco 400 Grand Avenue South. San Francisco, CA 94080 Re: Request to Extend Temporary License — AP -; 093 - 312 -050 L132 South San Francisco Pipeline Replacement Project Dear Mr. Lappen: Steve McClure Land Management Phone; (41.5) 972 -5104 EMAIL: M10@pge.com At Pacific Gas and Electric Company (PG &E), we are committed to strengthening our natural gas transmission system to better serve our communities. As part of that commitment, an additional. pipe replacement has been identified as part of the L -132 South San Francisco Pipeline Replacement Project. This segment involves the installation of approximately 700 feet of 30" pipe within Antoinette Lane, north of Chestnut with construction scheduled to begin March 1, 2016 and continue until December 31, 2'01.6. In order to plan the replacement of the pipeline, PG &E requests a License Agreement to use the Successor Agency's property located on Antoinette Lane, South San Francisco (see attached Exhibit) from March 1, 2016 through December 31, 2016. Please communicate directly with Yoli Matranga, Bender Rosenthal, Inc. regarding this matter or if you require further information. Yoli can be reached on 916 - 622 -9382 or via email at yMatjjgn aS rne.corn. Sincerely, e Steve McClure PG &E Land Acquisition Attachment P13 Exhibit A (Attach legal description and map of Antoinette Lane Property.) The land referred to is situated in the County of San Mateo, City of South San Francisco, State of California, and is described as follows, 2119589.1 P14 TAKE PARCEL 1 ALL THAT CERTAIN REAL PROPERTY IN THE CITY OF SOUTH SAN FRANCISCO, COUNTY OF SAN MATEO, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS: . ;, . COMMENCING AT A GRANITE MONUMENT MARKED "NO. 31" IN THE CrEN' ER OF THE COUNTY ROAD LEADING FROM SAN FRANCISCO To SAN JOSE, OPPOSITIE THE PRESENT RAILWAY STATION OF THE SOUTHERN PACIFIC RAILROAD COMPANY AT BADEN', AND RUNNING THENCE ALONG THE CENTERLINE OF SAID COUN-ry ROAD SOUTH 100 03` EAST 2.715 CHAINS TO A GRANITE MONUMENT MARKED "No, 30% THENCE LEAVING SAID CENTERLINE OF SAID COUNTY ROAD SOUTH 70 2T WEST 1.37 CHAINS TO A 6'X 6" REDWOOD WITNESS POST MARKED "L. 12" IN THE EASTERLY BOUNDARY LINE OF THE RIGHT OF WAY OF THE SOUTHERN PACIFIC RAILROAD COMPANY; THENCE ALONG SAID EASTERLY LIFE OF SAID RIGHT OF WA-Y NORTH 50° 54' WEST 5.975 CHAINS TO A WITNESS POST MARKED "L 11 "; THENCE NORTHWESTERLY ALONG SAID EASTERLY LINE OF SAID RIGHT OF WAY 525 FEET MORE OR LESS, TO A WITNESS POST MARKED "L 10 ", THENCE NORTHWESTERLY .ALONG SAID EASTERLY LINE OF SAID RIGHT OF WAY 536 FEET, MORE OR LESS, TO A WITNESS POST MARKED "L 9" AT THE INTERSECTION OF SAID EASTERLY LINE OF SAID RIGHT OF WAY WITH THE SOUTHERLY LIME OF THE LADE LEADING FROM SAID COUNTY ROAD TO THE "FLOOD AND MACKAY TRACT;" THENCE ALONG SAID SOUTHERLY LINE OF SAID LADE NORTH 400 46" EAST 4.26 CHAINS TO A WOODEN MONUMENT MARKED "NO. 35" IN THE CENTER OF SAID COUNTY ROAD; THENCE ALONG SAID CENTERLINE OF SAID COUNTY ROAD SOUTH 39° 18' .EAST 3.61 CHAINS TO A WOODEN MONUMENT MARKED "'NO. 34 ", THENCE. ALONG SAID CENTERLINE OF SAID COUNTY ROAD SOUTH 330 51' EAST 1.6,93 CHAINS TO SAND GRANITE MONUMENT "NO. 31" AND THE POINT OF COMMENCEMENT, EXCEPTING THEREFROM SO MUCH OF THE LAND THEREOF ACQUIRED BY THE SAN MATEO COUNTY FLOOD CONTROL DISTRICT, A FLOOD CONTROL DISTRICT OF THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA, IN THAT CERTAIN FINAL ORDER OF CONDEMNATION RECORDED ON SEPTEMBER 7, 1977 IN BOOK 7596 AT PAGE 606 (FILE NO, 69920 - -A.L) IN THE SAN! MATEO COUNTY OFFICIAL RECORDS, EXCEPTING THEREFROM PARCEL D- 3103 -1 DESCRIBED IN EXHIBIT A-6 ATTACHED TO THAT CERTAIN FINAL ORDER OF CONDEMNATION FILED IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA IN AND FOR THE COUNTY OF SAN MATEO, ENTITLED "SAN MATEO COUNTY TRANSIT DISTRICT, PLAINTIFF, VS. CITY AND COUNTY OF SAN FRANCISCO, DEFENDANT', CASE NO, 405695 AND RECORDED FEBRUARY 11, 2004 UNDER RECORDER'S SERIES 'NO. 2004 - 025111 IN 'THE SAID MATEO COUNTY OFFICIAL RECORDS, PARCEL II: A NON - EXCLUSIVE EASEMENT" FOR ROAD PURPOSES ACROSS COLMA CREEK IN THE CITY OF SOUTH SAN FRANCISCO, MORE PARTICULARLY DESCRIBED AS FOLLOWS: PIS BEGINNING AT A POINT ON THE SOUTHWEST BOUNDARY OF PARCEL -1533-2 AS SAID PARCEL IS DESCRIBED IN HNAt ORDER OF CONDEMNATION, SUPERIC)R COURT, OF THE STATE OF CALIFORNIA, IN AND FOR THE COUNTY OF SAN MATEO, AND RECORDED SEPTEMBER 7, 1977 IN VOLUME 7596, OFFICIAL RECORDS OF SAN MA-rEO COUNTY AT PAGE 610, DISTANT NORTH 620 54' 14" WEST 172.29 FEET FROM THE S(DUTHERLY CORNER THEREOF- THENCE ALONG SAID SOUTHWESTERLY BOUNDARY NORTH 62- 54- 14` WEST 30.00 FEET; THENCE, NORTH 270 05'46" EAST 72.96 FEET TO A POINT ON THE NORTHEASTERLY BOUNDARY OF SAID PARCEL 1553-2; THENCE ALONC, SAID NORTHEASTERLY BOUNDARY SOUTH 60* 50 45" EAST 30,02 FEET; TFIFENCE SOUTH 27- 05'46'WEST 71.88 FEET TO THE POINT OF BEGINNING, w 0 THE AREA OF THIS PARCEL IS 7.6 ACRES MORE OR LESS. M93121Y j O WILLIAM MASTERSON, LS 4818 LICENSE EXPIRES 9-30-08 0, 0. 6 OCTOBER 6, 2005 OF C P16 III? Exhibit B 2119589. 1 11 P18 M / hod / / /im, , / / /rl�,w y I l 9 AO! 'W M o ri 'RS / Cry . / t @, A, Uj ol /%' ✓,� /' put' Q / ✓ / ni� / / / j j sm1%/ CL r rr � t I C ei UY t " � j C ���� 3: o z x N C� 19.1 r WQ Gam) 6 CL Li CN I Ow" Af, Y P19 Exhibit C 9 A IF I I 1 1 1 As used in this License, the term "Hazardous Material" means any chemical, compound, material, mixture, or substance that is now or may in the future be defined or listed in, or otherwise classified pursuant to any Environmental Laws (defined below) as a "hazardous substance ", "hazardous material ", "hazardous waste ", "extremely hazardous waste ", infectious waste ", toxic substance ", toxic pollutant ", or any other formulation intended to define, list or classify substances by reason of deleterious properties such as ignitability, colrosivity, reactivity, carcinogenicity, or toxicity. The term "hazardous material" shall also include asbestos or asbestos - containing materials, radon, chrome and/or chromium, polychlorinated biphenyls, petroleum, petroleum products or by- products, petroleum components, coil, mineral spirits, natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable as fuel, perchlorate, and methy tert butyl ether, whether or not defined as a hazardous waste or hazardous substance in the Environmental Laws. As used in this License, the term "Environmental Laws" means any and all federal, state and local statutes, ordinances, orders, rules, regulations, guidance documents, judgments, governmental authorizations or directives, or any other requirements of governmental authorities, as may presently exist, or as may be amended or supplemented, or hereafter enacted, relating to the presence, release, generation, use, handling, treatment, storage, transportation or disposal of Hazardous Materials, or the protection of the environment or human, plant or animal health, including, without limitation, the Comprehensive Environmental response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and reauthorization .Act of 1986 (42 U,S.C. § 9601), the Hazardous Materials Transportation Act (49 U.S.C. § 1801 et sue.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. § 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401 et M.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), the Oil Pollution Act (33 U.S.C. § 2701 et seq.), the Emergency Planning and Community bight -to -Know Act (42 U.S.C. § 11001 et sec.), the Porter - Cologne Water Quality Control Act (Cal. Water Code § 13000 et sec,), the Toxic Mold. Protection Act (Cal. Health & Safety Code § 26100, et sego), the Safe Drinking Water and Toxic Enforcement Act of 1986 (Cal. Health & Safety Code § 25249.5 et sue.), the Hazardous Waste Control Act (Cal. Health & Safety Code § 25100 et seq.), the Hazardous Materials release Response Plans & Inventory Act (Cal. Health & Safety Code § 25500 et sue.), and the Carpenter - Presley - 'Fanner Hazardous Substances Account Act (Cal. Health and Safety Code, Section 25300 et M.). 2119589.1 12 P20 Exhibit D The following conditions shall be incorporated into the License Agreement. Most of these conditions are also being incorporated into the encroachment permit that will cover work on Antoinette Lane. 1. All lay down and staging areas shall be fenced to prevent public access and screened from public view. The screening shall be installed and maintained in a professional and attractive manner, subject to review and approval of the Planning Manager. 2. Licensed Premises operation hours shall be weekdays from 7:00 a.m. to 8:00 p.m. unless otherwise approved by the City Engineer or authorized representative. Any weekend work shall be approved by the City Director of Public Works. Weekend hours shall comply with the SSF Municipal Code. Licensee shall coordinate with private owners adjacent to the project site to minimize impacts due to construction. Licensee shall notify all nearby residents and businesses affected by the work within 300 feet of the project site. Notifications shall include at a minimum: work hours, Licensee contact information, brief description of the work, and project duration. A copy of the notices shall be provided to the Successor Agency for review prior to distribution, 4. Licensee shall incorporate all storm water pollution Control measures required by an approved storm water pollution prevention plan. Licensee shall employ adequate dust control measures to ensure that neighboring businesses and residences are not adversely impacted by Licensee's activities on the Licensed Premises. Existing improvements to the Licensed Premises shall be restored to existing or better condition. Improvements shall include, but not be limited to, pavement, curbs, gutters, sidewalks, storm and sanitary sewer facilities, public utilities, surface improvements, landscaping, and lighting. Licensee shall be responsible for cleanup of any contamination by regulated substances introduced to the site by Licensee's activities on the Licensed Premises. 6. Licensee shall coordinate with City of South San Francisco staff to ensure that the City will be able to undertake work related to improvements on the entire PUC property, which are also identified in the recently approved Measure W Bond. The Licensee shall grant the City access to the subject site and cooperate with the City to undertake activities surrounding the subject site, 2119589.1 1 ' #10 on the Regular City Council Meeting Agenda.