Item 03 - Affordable Housing Project at 801, 807, 809 and 809 ½ E. Santa Ana Blvd.

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Loan Agreement and Ground Lease Agreement for FX Residences December 7, 2021 Page 5 2 2 6 4 The Housing Authority may enter the premises upon two (2) business days’ prior written notice to Tenant in order to determine whether Tenant is complying with Tenant’s obligations or to enforce any rights given to the Housing Authority under the Lease. On a monthly basis, the Tenant shall maintain a reserve fund to pay for the costs of major replacements, renovations or significant upgrades of or to the Project. The Tenant shall contribute to a Capital Improvement Fund one percent (1%) of the total rent collected by Tenant from sub-tenants from the previous month. Throughout the Term of the Lease, Tenant shall, at Tenant’s sole cost and expense, keep and maintain the premises and all Improvements now or hereafter constructed and installed on the premises in good order, condition and repair. In the event the whole or any part of the improvements shall be damaged or destroyed by fire or other casualty, damage or action of the elements which is fully covered by insurance required to be carried by Tenant pursuant to the Lease or in fact caused by Tenant, at any time during the Term, Tenant shall with all due diligence, at Tenant’s sole cost and expense, repair, restore and rebuild the improvements on substantially the same plan and design as existed immediately prior to such damage or destruction and to substantially the same condition that existed immediately prior to such damage. Tenant will purchase all required insurance at Tenant's expense and provide active certificates of insurance, including all endorsements required by the Housing Authority. Other terms and conditions binding the Tenant in regards to Condemnation, Subletting, Default and Remedies under the lease, Holding Over the lease term, Leasehold Mortgages, and Best Management Practices. The 99-year Ground Lease has been signed by HomeAid to acknowledge their acceptance of the terms. The approval of the 99-year Ground Lease is contingent on approval of the award of additional funds and the Loan Agreement. Density Bonus Agreement The Density Bonus Agreement was approved unanimously by the Planning Commission on March 22, 2021. The Agreement is attached as Exhibit 6. As proposed, the Project will utilize waivers from development standards and/or development concessions through the Density Bonus Agreement as permitted pursuant to California Government Code sections 65915 through 65918 as implemented by the Santa Ana Municipal Code (SAMC) Sections 41-1600 through 41-1607. Staff is recommending approval of the Density Bonus Agreement as the Project satisfies the purpose and intent of the Transit Zoning Code (TZC) to promote a pedestrian-oriented environment with a mix of land uses and will provide additional affordable housing stock to an underserved segment of the City’s population. The California Density Bonus law allows developers proposing five or more residential units to seek increases in base density for providing on-site housing units in exchange for providing affordable units on site. To help make constructing on-site affordable units