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The ground lease payments will be structured as capitalized ground rent payments based on the appraised fair market value of the Property. The Developer estimates the current value of the Property at $5,580,000. This figure will need to be confirmed through an appraisal, but based on the Developer's assessment, the capitalized ground rent payments are estimated as follows: • The capitalized ground rent payment for the County parcel is estimated at $2,500,000; and, • The capitalized ground rent payments for the Housing Authority parcel is estimated at $3,080,000. These amounts will be secured by a promissory note on the Property and be repaid through a share of the Project's residual receipts to be paid to the County and Housing Authority respectively. Based on the above, the Housing Authority Board authorized a preliminary award of a 62- year lease of the Housing Authority portion of the Property to the Developer for the Project. After Developer secures a commitment from the County for a 62-year lease of the County portion of the Property, staff will return to the Housing Authority for consideration of a 62-year Ground Lease Agreement. There will only be one final Ground Lease Agreement that will have all three parties: the County, City (as tenants in common) and the Developer. The Ground Lease Agreement will be contingent on the successful development of the Project by the Developer. General Provisions: The City's obligation to provide the City Assistance to the Project is subject to each of the following conditions: Developer must provide proof that it has secured all of its remaining financing for the development of the Project in the form of enforceable funding commitments, including, but not limited to, 9% or 4% Federal Low Income Housing Tax Credits, State Housing Tax Credits, a loan of affordable housing funds from the County of Orange, Section 8 project -based vouchers from the Orange County Housing Authority, or any other funding sources necessary in the Project's capital stack to close on their financing, before staff will return to the City Council for consideration of the NSP and HOME Loan Agreements. • Developer must provide proof that the County has approved or committed to approve a 62-year ground lease for the County portion of the Property located at 1126 and 1146 E. Washington Avenue, Santa Ana, CA 92701 (APNs: 398-092-13 and 398- 092-14) before staff will return to the Housing Authority for consideration of the Ground Lease Agreement. • All of the affordable units in the Project will be restricted to extremely low-income households. ,•1M •