Item 03 - Crossroads at Washington Affordable Housing Project

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First Amendment to the Option Agreement for the Crossroads at Washington December 15, 2020 Page3 and recommended additional environmental investigations to determine the vertical and horizontal extent of the soil contamination on the County and Authority properties. Subsequently, the County retained Geosyntec Consultants, Inc. to provide environmental peer review services and to act as the County's consultant with respect to environmental issues on the site, for the benefit of both the County and the Authority. Additional environmental assessments in May and September concluded that the levels of contaminants might warrant environmental oversight by a public agency. As a preemptive measure, all parties agreed to reach out to the Orange County Health Care Agency ("OCHCA") to serve as the oversight agency under its voluntary environmental oversight program. The involvement of an oversight agency provides regulatory direction on further assessments and mitigation/remediation options for the site. The May and September, investigations warrant additional assessments to determine the full extent of contamination before mitigation measures can be pursued. To date, the Developer has incurred over $100,000 of additional environmental assessment expenses beyond the original Phase II ESA Report. A project timeline is provided with more details regarding the environmental assessments and testing (Exhibit 2). Table 2 summarizes cost for subsequent site assessment since issuance of the original Phase II ESA Report on February 19, 2020. T bl 2 S a e -ummary o f s·t A le t B d t ssessmen u 1ge s Additional Assessments beyond Originally Issued Phase II ESA Amount Additional Scope and Cost approved by staff on May 13, 2020 $59,700 Additional Scope and Cost approved by staff on May 22, 2020 $6,255 Additional Scope and Cost approved by staff on June 2, 2020 $1,750 Additional Scope and Cost approved by staff on August 12, 2020 $50,210 Additional Scope and Cost approved by staff on September 23, 2020 $11,104 Total $129,019 Tax Credit Reservation Due to the highly competitive nature of receiving tax credit allocations in California (e.g., competitions are typically oversubscribed by 300%), the Developer was unsuccessful in securing a tax credit reservation in its initial California Tax Credit Allocation Committee {"TCAC") application submittal during the 2020 First Competitive Application Funding Round in March 2020. The Developer resubmitted a tax credit application in TCAC's Second Competitive Application Funding Round in July 2020 and was successful in securing a reservation of special, one-time Further Consolidated Appropriations Act, 2020 ("FCAA") federal credits. As prescribed by the TCAC regulations, if the Developer chooses to accept the reservation of the FCM credits, the Developer would be subject to $214,772 of non-refundable payments for the required TCAC Allocation Fee ($107,386) and TCAC Performance Deposit ($107,386). If the Developer returns the credits, TCAC would not return the fees. Additionally, the TCAC regulations allow the Developer to return the FCAA credits no later than September 1, 2021 to avoid being assessed negative points for future TCAC applications. 2-3 EXHIBIT 1