Item 68 - Crossroads at Washington Affordable Housing Project at 1126, 1136, & 1146 East Washigton Ave.

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Agreements for the Development of the Crossroads at Washington June 21, 2022 Page 10 2 7 6 6 prior indemnity provisions. With the DTSC approved remediation plan, this should not result in any additional obligations or liability to the Housing Authority or City. In addition, U.S. Bank as the senior lender for the Project, requested revisions to the Ground Lease as part of their due diligence in order to approve their senior loan. In general, U.S. Bank’s revisions seek to protect and enhance their rights as a senior lender. Specifically, U.S. Bank requested revisions throughout the Ground Lease in the following Sections: Annual Operating Expenses, Effective Date, Net Refinancing Proceeds, Net Syndication Proceeds, Preconditions, Ownership of Improvements, contributions to the Capital Improvement Fund, Damage and Restoration, Transfer of Mortgages of Lessor’s Interest, Tenant’s Right to Encumber Leasehold Estate, Limitation on Lessor’s Termination Right, Leasehold Mortgagee Foreclosure Period, Multiple Leasehold Mortgages, Condemnation and Insurance Proceeds, and Effect of Foreclosure upon Base Rent, Successors and Assigns. Finally, the City and the County needed to make revisions to the County and Housing Authority’s base rents in order incorporate a loan from the Orange County Housing Finance Trust and adjust the residual receipt split. The revised Ground Lease is attached as Exhibit 11 with these revisions in redline format. The revised Ground Lease has been pre-signed by Related to acknowledge their acceptance of the terms. Land Use Covenant with the Department of Toxic Substances Control The property at 1126, 1136, & 1146 East Washington Avenue (the “Property”) has been found to have existing on-site environmental contaminants. Following their oversight of the Project, the State of California Department of Toxic Substances Control (“DTSC”) has determined that a Land Use Covenant is reasonably necessary to protect present or future human health or safety or the environment as a result of the presence on the property of hazardous materials as defined in Health and Safety Code section 25260. A limited portion of the Property will be subject to the restrictions of the Land Use Covenant (“Restricted Area”), and is more particularly described in Exhibit C of the Land Use Covenant. The Restricted Area is defined and bound by specific GPS coordinates. The Property has been investigated and/or remediated under DTSC’s oversight. DTSC approved a Supplemental Site Investigation, Screening Level Human Health Risk Assessment, and Removal Action Workplan in accordance with Health and Safety Code, division 20, chapter 6.8. The remediation activities conducted at the Property include (1) excavation and offsite disposal of soil contaminated with arsenic, lead, chromium, and petroleum hydrocarbons, and (2) institutional controls to restrict construction over the area of soil vapor contaminated with Tetrachloroethene beneath the western portion of the North parcel. However, hazardous substances, including Tetrachloroethene, remain at the Property above levels acceptable for unrestricted land use.