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HomeMy WebLinkAbout8.1 Veterans Family Apartments or nU,�� 19 82 STAFF REPORT CITY CLERK CITY COUNCIL File #600-30 DATE: November 18, 2014 TO: Honorable Mayor and City Councilmembers FROM: Christopher L. Foss, City Manager " SUBJECT: Veterans Family Apartments Project Prepared by John Bakker, City Attorney and Amy Cunningham, Assistant to the City Manager EXECUTIVE SUMMARY: The City Council will receive an update on the proposed Veterans Family Apartments project located at 6707 Golden Gate Drive. The City Council will also 1) Consider a request from Eden Housing Inc. for a loan commitment letter in the amount of$6.4 million; and 2) Consider entering into an Option Agreement with Eden Housing, Inc. for the affordable housing project. FINANCIAL IMPACT: If approved, this request would require an additional appropriation from the Affordable Housing Fund in the amount of approximately $6.4 million. Funds would be provided to Eden Housing Inc. in the form of a low interest loan with terms to be negotiated and approved by the City Council at a future meeting. RECOMMENDATION: Staff recommends that the City Council: 1) Authorize the City Manager to execute a loan commitment letter to Eden Housing for grant application / fundraising purposes; 2) Direct Staff to include a reserve in the Affordable Housing Fund for a future loan of $6.4 million to Eden Housing, Inc.; 3) Adopt the Resolution Approving an Option Agreement between the City of Dublin and Eden Housing, Inc. on Property to be Developed for an Affordable Housing Project; and 4) Direct Staff to negotiate a Regulatory Agreement, Loan Agreement, and other documents necessary to develop the project for City Council consideration at a future meeting. Submitted By 'Reviewed By Community Development Director Assistant City Manager Page 1 of 4 ITEM NO. 8.1 DESCRIPTION: On October 7, 2014, the City Council adopted Resolution 168-14, approving a Community Benefit Agreement between the City of Dublin and Bay West Development Partners IV, LLC for a Mixed-Use Residential and Retail Project. The Community Benefit Agreement provided that Bay West transfer interest in Parcel B of the site (1.37 acres) to the City or to Eden Housing as an alternate method of complying with the Inclusionary Zoning Regulations. The intent is to provide affordable housing primarily for veterans and their families on Parcel B, located at 6707 Golden Gate Drive. The development of veteran's housing is a key City Council Strategic Initiative. Project Background The veteran/family affordable housing project was approved as part of the development proposal for the former Crown Chevrolet site last year. The site and architectural designs were discussed by the City Council and Planning Commission at a joint Study Session in February 2013 and the project was reviewed and unanimously approved by the Planning Commission on March 26, 2013. As noted above, a Community Benefit Agreement was executed with the new property owners (Bay West) on October 7, 2014. The new owners of the property intend to move forward with constructing the project as approved in 2013, and it is expected that building permits for the 314 unit market-rate residential project (on Parcel A) will be sought in early 2015. If financing is obtained as anticipated, Eden Housing expects to submit a request for Building Permits for 64 affordable residential units (on Parcel B) in March 2015. The four-story Eden Housing building is in close proximity to amenities and mass transit. The building will include a mix of one, two and three bedroom apartments to accommodate a variety of family types. Planned amenities include: a community room, private meeting areas for smaller groups, computer lab, community gardens, play area, and coordinated case management and other support services provided in partnership with local Veterans organizations. Affordable Units One Bedroom Units 24 Two Bedroom Units 20 Three Bedroom Units 19 Manager Unit 1 Total Units 64 Loan Commitment Letter To develop the project, Eden Housing is undertaking a fundraising campaign. At this time, Eden Housing is asking the City to provide a loan commitment for $6.4 million to aid in securing other sources of funding. The letter is needed immediately as Eden Housing has the opportunity to apply for a State of California Infill Infrastructure Grant (IIG). The deadline to apply for this funding is December 10, 2014. If Eden's application is successful, the grant could provide up to $2 million to assist with project's infrastructure costs. A commitment from the City now will increase project competitiveness for this grant program and others in the coming months. Additional information about the project, including project financing and a broad timeline, are outlined in a letter from Eden Housing dated November 6, 2014 (Attachment 1). Eden Housing currently estimates that the 64-unit project will cost approximately $27 million. As is typical with Page 2 of 4 projects of this type, Eden Housing is seeking funding from a variety of sources including tax credits, public and private grants, and other financing to close the funding gap. Eden intends to secure all needed financing by August 2015, begin construction in September 2015 and complete the project in December 2016. Affordable Housing Fund The Affordable Housing Fund is a special fund established to support the construction, acquisition, or creation of affordable housing in the City. Funds are collected through loan repayments (including principal and interest from prior project loans), developer contributions, and housing program administration fees. Annual expenses include costs to administer the affordable housing program (BMR rental and ownership units), the First Time Homebuyer Loan Program, and other expenses associated with providing affordable housing programs. As of June 30, 2014, the Affordable Housing Fund balance was approximately $10 million. It is expected that the Affordable Housing Fund will collect nearly $2 million in revenues during Fiscal Year 2014-15. A loan in the amount of $6.4 million for this project would result in a fund balance of approximately $4.8 million as of June 30, 2015. It is expected that adequate funding would remain available to support ongoing housing program operations in future years. Affordable Housing Fund Balance as of 06/30/14 $10,064,963 FY 14-15 Projected Revenue 1,986,143 FY 14-15 Projected Operating Expenses (828,004) Veterans Family Development (6,400,000) (to Eden Housing) Projected Fund Balance 06/30/15 $ 4,823,102 If the City Council approves the requested loan in the amount of $6.4 million, a loan agreement would be developed between the City and Eden Housing for the City Council's consideration. The agreement would outline specific project milestones with detailed timelines to accomplish tasks. Option Agreement To ensure the City's interest in preserving the "community benefit" (the construction of affordable housing on Parcel B) as defined in the Community Benefit Agreement between the City and Bay West, the City must enter into an Option Agreement (Attachment 2) with Eden Housing. This agreement will be recorded against the property concurrently with the deed transferring title to the property from Bay West to Eden Housing. The Option Agreement provides that the City retains an exclusive right and option to purchase the Property from Eden Housing, which may be exercised by the City if (a) Eden fails to record the Regulatory Agreement against the Property within 90 days of Eden's acquisition of title; (b) prior to Eden transferring the Property or certain interests in Eden at any time prior to the recordation of the Regulatory Agreement; or (c) if Eden does not commence construction of the Development on the Property as specified in the agreement. Next Steps To advance the project, it is additionally recommended that the City Council provide Staff with direction to negotiate: (1) a Regulatory Agreement (specifying the affordability conditions), (2) loan agreements (Promissory note and deed of trust for development/pre-development loan), Page 3 of 4 and (3) other documents necessary to partner with Eden Housing on this project. The proposed agreements would be brought to the City Council at future meetings for consideration. NOTICING REQUIREMENTS/PUBLIC OUTREACH: Not applicable. ATTACHMENTS: 1. Letter from Eden Housing (November 6, 2014) 2. Resolution Approving an Option Agreement between the City of Dublin and Eden Housing Inc. on Property to be Developed for an Affordable Housing Project and Option Agreement between City of Dublin and Eden Housing Page 4 of 4 YI November 6, 2014 4°°°III 0 U SIII IIIG Mr. Christopher Foss City Manager City of Dublin 226,111,brand Str,of 100 Civic Plaza I layvv,lyd,CA 94�41 Dublin, CA 94568 2102 ,A]21400 FrV•uon 1-10 ,8,) 11::aX RE: Dublin Veterans Family Apartments Request for Funding Dear Chris: Eden Housing, Inc. is extremely excited to move forward with the next stages of development on the Dublin Veterans Family Apartments project. This project is a 64-unit affordable housing development targeted toward veterans and their families. Located near the West Dublin/Pleasanton BART station, this development will provide critically needed affordable housing for former members of our armed forces and their families. The current stage of development is a fundraising campaign. As you know, in order to keep the rents affordable for low income families, we must seek non-traditional sources for funding, such as tax credits, grants, and soft financing. We are writing at this time to request that the City of Dublin make a commitment of$6,400,000 from the City Affordable Housing Fund to close the financing gap on this project. A commitment from the City would not only be instrumental in closing the financing gap, it would also boost the competitiveness of this project for County, State, and Federal affordable housing funds for which we will be submitting applications over the next few months. Project Description Eden Housing will be developing a 1.3 acre parcel located at 6707 Golden Gate Drive, transforming a vacant parking lot into a 4-story apartment complex. Located in downtown Dublin, this community will be within walking distance to schools,parks, retail stores, and services as well as several options for mass transit including the West Dublin/Pleasanton BART station, less than 0.2 miles away. 64 units of affordable housing will be developed and operated by Eden. Of the 64 units, a portion will be specifically set aside for previously homeless veterans and their families; the remainder will house low-income families with a preference for veteran families. The design calls for a 4-story building attached to a 4-level parking garage with access to the apartments from each floor— a design feature that may be particularly beneficial to disabled residents. The affordable units this project will provide include 24 one-bedroom units, 20 two-bedroom units, and 19 three-bedroom units; an additional manager's unit is also included. The project amenities will include a community room, smaller private spaces for one-on-one and small group support meetings, computer lab, community gardens, and a play area. There will be a full-time property manager as well as a half-time resident service coordinator staffed on site. In addition, Eden will work with local Veterans organizations to deliver case management,job training, and other critical services to our veteran residents to help ensure they succeed. 1r n I-Ir.,ru ing y rr­,nn ch"r1r i-r7ii in[;'I,a,,ud :)I I r wo,c<lni,r llgion ,rx,har)(11r,ap, Iainlll,l stal u, i i,ati ri i al ::rrighn,ni 1i iy nU or Po�u� rha Ir rta hw,a , I DID I I Y I HOO/,',5 2 )2 M Project Financing This project will be seeking tax-exempt bond financing and a 4% Low Income Tax Credit allocation in early 2015. Additional funding sources contemplated include a grant from the Home Depot Foundation for veterans housing, Alameda County HOME and Boomerang funds (application in process), Infill Infrastructure Grant funds (application in process), and a Bank of America subordinate loan (application in process). More detailed project financing and budget figures are shown in the table below. DEVELOPMENT BUDGET Total Per Unit Total Land & Improvements $55,600 $869 Total Design &Consulting $1,620,572 $25,321 Total Construction $17,481,131 $273,143 Total Indirect Costs $6,272,187 $98,003 Total Finance&Carry Costs $1,452,513 $22,696 Total TCAC/Syndication $161,531 $2,524 TOTAL DEVELOPMENT COSTS $27,043,534 $422,555 SOURCES OF FINANCING Total Per Unit City of Dublin $6,400,000 $100,000 Land Donation $0 $0 Bank of America Subordinate Loan $3,000,000 $46,875 Alameda County HOME/Boomerang $210,000 $3,281 Infill Infrastructure Grant $2,175,000 $33,984 HOME Depot Grant $250,000 $3,906 Low Income Housing Tax Credits Equity $12,125,917 $189,467 Permanent Financing $2,882,618 $45,041 TOTAL SOURCES OF FUNDS $27,043,534 $422,555 Note: Numbers in the table may not add up exactly due to rounding. Project timeline Entitlements: Complete Building Department submittal: March 2015 Obtain all construction financing: October 2014-August 2015 Construction start: September 2015 Construction completion: December 2016 We look forward to continuing to work with the City on this exciting new project. We thank you for your consideration. Sincerely, , , c Linda Mandolin President RESOLUTION NO. -14 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN APPROVING AN OPTION AGREEMENT BETWEEN THE CITY OF DUBLIN AND EDEN HOUSING INC ON PROPERTY TO BE DEVELOPED FOR AN AFFORDABLE HOUSING PROJECT WHEREAS, Eden Housing Inc ("Eden") and the City desire to enter into an Option Agreement ("Agreement") on property to be developed for an affordable housing project with preference for households with military veterans on a 1.37-acre site within the Downtown Dublin Specific Plan area, located at 6707 Golden Gate Drive, Dublin, California, (APN 941-1500-032-02) as more particularly described in Exhibit A in the Option Agreement attached to this Resolution ("Property"); and WHEREAS, Eden or its controlled affiliate, will acquire the Property from Bay West Development Partners IV LLC, a California limited liability company ("Market Rate Developer") who acquired the Property and APN 941-1500-015-09 located at 7544 Dublin Boulevard for the Market Rate Developer's mixed-use project. Pursuant to that certain City of Dublin Community Benefit Agreement with Bay West Development Partners IV LLC, dated October 7, 2014 ("Community Benefit Agreement"), the Market Rate Developer will transfer the Property to an affordable housing developer. This transfer will satisfy the Market Rate Developer's obligation under the Community Benefit Agreement to transfer the property to either the City, Eden, or another similar affordable housing provider. The transfer also serves to satisfy the Market Rate Developer's mixed-use project affordable housing obligations under the City's Inclusionary Zoning Regulations; and WHEREAS, Eden intends to construct a residential project on the Property consisting of between approximately 64 to 72 affordable rental housing units primarily for veterans and their families and other very low and low income families, and related improvements ("Development"); and WHEREAS, the Inclusionary Zoning Regulations, as well as the City's interest in ensuring that it receives the "Community Benefit" from the transfer, require the recording of an Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants on the Property to assure that the uses of the Property are consistent with the Inclusionary Zoning Regulations and the Development, as it has been proposed by Eden ("Regulatory Agreement"). The Regulatory Agreement has not been finalized at this time; and WHEREAS, the Agreement gives the City an exclusive right and option to purchase the Property from Eden, which may be exercised by the City if Eden fails to record the Regulatory Agreement against the Property within 90 days of Eden's acquisition of title, prior to Eden transferring the Property or certain interests in Eden at any time prior to the recordation of the Regulatory Agreement, or if Eden does not commence the construction of the Development on the Property as set forth in Section 2.b of the Agreement; and WHEREAS, the Agreement gives the City the right to acquire the Property to assure that it is used for an affordable housing project if Eden fails to fulfill its obligations after it acquires the Property; and WHEREAS, the Agreement provides that a Memorandum of Option shall be concurrently executed with the Agreement and recorded on the Property. NOW, THEREFORE, BE IT RESOLVED THAT the City Council of the City of Dublin approves, and authorizes the City Manager to execute, the Option Agreement and Memorandum of Option, in substantially the form attached hereto as Exhibit A, upon the satisfaction of the conditions set forth in the Agreement, including, but not limited to, those set forth in Sections 22 and 25. The City Manager is authorized to enter into the Agreement with Eden Housing Inc or an affiliate controlled by Eden Housing Inc created for acquisition and the Development of the Property PASSED, APPROVED AND ADOPTED this 18th day of November, 2014 by the following vote: AYES: NOES: ABSENT: ABSTAIN: Mayor ATTEST: City Clerk 2360262.2 OPTION AGREEMENT This Option Agreement ("Agreement") is entered into as of by and between the City of Dublin, a municipal corporation ("City"), and Eden Housing, Inc., a California nonprofit public benefit corporation("Owner"). RECITALS A. Owner owns or will own that certain real property located at 6707 Golden Gate Drive, Dublin, California, (APN 941-1500-032-02) as more particularly described in Exhibit A attached to this Agreement ("Property"). B. Owner acquired or will acquire the Property from Bay West Development Partners IV LLC, a California limited liability company ("Market Rate Developer") who acquired the Property and APN 941-1500-015-09 located at 7544 Dublin Boulevard for the Market Rate Developer's mixed-use project. Pursuant to that certain "City of Dublin Community Benefit Agreement with Bay West Development Partners IV LLC October 7, 2014 ("Community Benefit Agreement"), the Market Rate Developer transferred or will transfer the Property to Owner, an affordable housing developer, for a nominal sum. The Community Benefit Agreement involves the Market Rate Developer's provision, pursuant to the Downtown Dublin Specific Plan, of a Community Benefit in exchange for additional development potential on its property and the Property. This transfer satisfies or will satisfy the Market Rate Developer's obligation under the Community Benefit Agreement to transfer the property to either the City, Owner, or another similar affordable housing provider. The transfer also serves to satisfy the Market Rate Developer's affordable housing obligations under the City's Inclusionary Zoning Regulations. C. Owner intends to construct a residential project on the Property consisting of between approximately 64 to 72 affordable rental housing units primarily for veterans and their families and other very low and low income families, and related improvements ("Development"). D. The Inclusionary Zoning Regulations, as well as the City's interest in ensuring that it receives the anticipated "Community Benefit" from the transfer, require the recording of an Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants on the Property to assure that the uses of the Property are consistent with the Inclusionary Zoning Regulations and the Development, as it has been proposed by Owner ("Regulatory Agreement"). A Memorandum of Option disclosing this Option Agreement shall be recorded against the Property concurrently with the deed transferring title to the Property from the Market Rate Developer to the Owner. E. This Agreement gives the City an exclusive right and option to purchase the Property from Owner, which may be exercised by the City if the Owner fails to record Regulatory Agreement against the Property within 90 days of the Owner's acquisition of title, prior to the Owner transferring the Property or certain interests in 1 Dublin Vet Project Option Final 11/18/2014 Owner at any time prior to the recordation of the Regulatory Agreement, or if the Owner does not commence the construction of the Development on the Property as set forth in Section 2.b of this Agreement. F. All these Recitals are incorporated into and made part of this Agreement. NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL PROMISES CONTAINED IN THIS AGREEMENT, THE PARTIES AGREE AS FOLLOWS: AGREEMENT Section 1. Grant of Option. Owner grants to the City the exclusive right and option to purchase the Property for the consideration and under the terms and conditions set forth in this Agreement (the "Option"). Section 2. Term and Exercise of Option. a. Option Term. The term of the Option ("Option Term") shall be for a period commencing on the date the Memorandum of Option (attached as Exhibit B) is recorded and ending on the earlier of the following events: (i) the admission of the investor limited partner into the tax credit limited partnership formed for the Development and the closing of Owner's construction loans necessary for Owner to commence construction of Development, which are required to be identified and approved by the City in accordance with the City documents evidencing the City Loan ("Construction Loans"); and (ii) the date this Option is terminated in writing by the City. Owner shall provide City with thirty (30) days' prior written notice of the admission of the investor limited partner and the closing of Construction Loans. b. Exercise of Option. The City may exercise the Option only in the event that (i) the Owner fails or refuses to record the Regulatory Agreement against the Property in the form acceptable to the City within 90 days of the Owner's acquisition of title, (ii) the Owner attempts to affect a "Transfer" as defined below at any time prior to the recordation of the Regulatory Agreement; or (iii) the Owner fails to admit an investor limited partner into the tax credit limited partnership formed for the Development and close on the construction loans for the Development necessary for Owner to commence construction of Development within 24 months from the recording of the Regulatory Agreement. The 90-day period or the 24 month period in this subsection may be extended in writing by the City Manager in its sole discretion if the City Manager finds that the Owner is diligently pursuing the Development and cooperating with the City in accomplishing all steps required to move forward with the Development in a timely manner. Transfer is defined as (i) directly or indirectly, voluntarily, involuntarily or by operation of law making or attempting any total or partial sale, transfer, conveyance, assignment or lease of the whole or any part of the Property or the improvements located on the Property; or (ii) a transfer of the beneficial interest of more than twenty- five percent (25%) in aggregate of the ownership and /or control of Owner at time of entering into this Agreement, taking all transfers into account on a cumulative basis; 2 Dublin Vet Project Option Final 11/18/2014 provided however, neither the admission of an investor limited partner, nor the transfer by the investor limited partner to subsequent limited partners shall be restricted by this provision. Owner shall give the City thirty (30) days' written notice prior to any Transfer. The City may exercise the Option by giving written notice to Owner of its exercise of the Option ("Option Notice"). C. Termination. Upon termination of the Option at the end of the Option Term, the City Manager shall sign and deliver in recordable form a quitclaim deed or such other document as may be reasonably required by the Owner to evidence the termination of the Option. The parties acknowledge that the quitclaim deed or other such document must be recorded concurrently with the close of escrow for the Construction Loans. Section 3. Purchase of the Property. a. Purchase Price. On the date specified in the Option Notice (which shall not be earlier than thirty (30) days after the date of the Option Notice), the Owner shall sell the Property to the City for the following consideration: (i) the amount that the Owner paid in cash for the purchase of the Property, which is $50 for the Option and $100 for the Property, excluding closing costs (ii) the termination of the Loan Agreement and cancellation of any debt incurred by the Owner to the City in connection with the proposed Development (Collectively, "City Loans") provided that the Owner returns to the City the full amount of any monies disbursed by the City to the Owner under the City Loans minus those monies expended by the Owner relating to the development of the Property as established by the Owner through documentation provided to the City in accordance with general accounting principles, and (iii) the amount paid by Owner to third parties not from the proceeds of City Loans for Development-related drawings, plans, specifications, studies, reports and other instruments (collectively, "Plans"). All Plans relating to the development of the Property shall be assigned to the City pursuant to the Assignment of Agreements executed by Owner in favor of the City at the time of the closing of the sale of the Property by Owner to the City. b. Execution of Deed. As soon as practicable, but in no event later than the date specified in the Option Notice for the purchase and sale of the Property, the Owner shall execute a grant deed (the "Deed") conveying to the City the Property and all improvements located on the Property which shall be recorded in the Official Records of the County of Alameda (the "Official Records"). C. Expenses. All city and county documentary transfer tax and conveyance taxes to the extent they are not exempt pursuant to the Revenue and Taxation Code, and recording charges for the Deed (if any) shall be borne by Owner. The cost of the Title Policy (as defined below) shall be borne by the City. All other expenses, fees or costs (except for attorneys' fees and costs) incurred in close of escrow for the purchase and sale of the Property pursuant to this Agreement shall be borne by the City. Each party shall bear its own attorneys' fees and costs. 3 Dublin Vet Project Option Final 11/18/2014 d. Proration of Taxes. Real property taxes, if any, on the Property shall be prorated as of the date of recordation of the Deed. Mello-Roos and other like assessments on the Property shall be similarly prorated and Owner's share shall be fully paid prior to recordation of the Deed. e. Title Insurance. Should the City exercise the Option, no later than the time of the recording of the Deed pursuant to subsection b. above, the City shall cause a title company of the City's choice to issue a CLTA or ALTA policy of title insurance (the "Title Policy") insuring fee title to the Property to be vested in the City, subject only to those encumbrances, conditions, or exceptions acceptable to the City in its reasonable discretion ("Permitted Exceptions"). Permitted Exceptions shall include all encumbrances, conditions and exceptions approved by the City under Section 21 below and/or in its loan policy issued in connection with the City Loan (defined in the Regulatory Agreement), any regulatory agreements and other deeds of trust or other security instruments securing debt on the Property approved by the City, or any other instruments recording with the prior written approval by the City. Owner shall be responsible for removing from the Property title any encumbrances, conditions, or exceptions other than Permitted Exceptions prior to the closing of the conveyance of the Property to the City. Section 4. Assignment of Option. Neither the Owner nor City may assign its rights or obligations under this Agreement without the prior written consent of the other party. The City hereby consents to an assignment by Owner that complies with Permitted Transfers as defined in the Regulatory Agreement or an affiliate controlled by Owner. Any assignment of this Agreement not authorized under this section shall be null and void. Section 5. Memorandum of Option. Contemporaneously with the execution of this Agreement, the City and Owner shall execute and acknowledge a Memorandum of Option in the form attached to this Agreement as Exhibit B. The City shall cause the executed and acknowledged Memorandum of Option to be recorded in the Official Records concurrently with the recording of the deed transferring title to the Property from the Market Rate Developer to the Owner. Section 6. Further Documents. Upon the reasonable request of the other party, each party will execute, acknowledge and deliver or cause to be executed, acknowledged and delivered, such further instruments and documents as may be reasonably necessary in order to carry out the intent and purpose of this Agreement, including escrow instructions. Section 7. Notices. All notices or other communications made pursuant to this Agreement shall be in writing and shall be deemed properly delivered, given or served to the parties at the following addresses when (a) mailed by certified mail, postage prepaid, return receipt requested; (b) sent by express delivery service, charges prepaid with a delivery receipt; or (c) personally delivered when a delivery receipt is obtained- 4 Dublin Vet Project Option Final 11/18/2014 Cam: City of Dublin 100 Civic Plaza Dublin, CA 94568 Attention: City Manager Owner: Eden Housing, Inc. 22645 Grand Street Hayward, California 94541-5031 Attention: President All notices so delivered, mailed or sent shall be deemed received as of the date shown on the delivery receipt as the date of delivery or the date delivery was refused. Either party may change its address for the purposes of this paragraph by giving prior written notice of the change to the other party in the manner provided in this paragraph. Section 8. Binding Effect. This Agreement and its terms and conditions shall be binding upon and inure to the benefit of the parties to this Agreement and their respective permitted successors and assigns. Section 9. Time. Time is of the essence of this Agreement. Section 10. Attorneys' Fees. In any action between the City and Owner to enforce or interpret any of the terms of this Agreement, the prevailing party shall be entitled to recover costs of suit and expenses, including, without limitation, reasonable attorneys' fees. Section 11. Eminent Domain. Notwithstanding any other provision of this Agreement, if at any time prior to execution and recordation of the Deed, any portion of the Property shall be taken by eminent domain or is the subject of eminent domain proceedings (either threatened in writing or commenced), and regardless of whether the City has exercised the Option, then the City shall have the right to terminate this Agreement upon written notice to Owner, whereupon the parties shall have no further obligations under this Agreement. Section 12. Exhibits. All exhibits attached to this Agreement and referred to in this Agreement are incorporated into this Agreement by this reference as though they were fully set forth in this Agreement. Section 13. Captions. The captions of the paragraphs of this Agreement are for convenience and reference only, and the words contained in the captions shall in no way be held to explain, modify, amplify or aid in the interpretations, constructions or meaning of the provisions of this Agreement. Section 14. Entire Agreement; Counterparts. This Agreement contains the entire agreement between the parties respecting the matters set forth, and supersedes all prior agreements between the parties respecting such matters. This Agreement may be 5 Dublin Vet Project Option Final 11/18/2014 executed in counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same Agreement. Section 15. No Third Party Beneficiaries. Nothing in this Agreement, express or implied, is intended to confer to any person, other than the parties and their permitted successors and assigns, any rights or remedies under or by reason of this Agreement. Section 16. Waiver. No provision of this Agreement shall be deemed waived by a party unless such waiver is in writing and signed by the party making the waiver. Failure of either party at any time to require performance of any provision of this Agreement shall not limit that party's right to enforce the provision unless the waiver is made in writing. Waiver of any breach of a provision shall not be a waiver of any succeeding breach of the provision or a waiver of the provisions itself or of any other provision. Section 17. Authority of Signatories. Each of the parties to this Agreement represents and warrants to the other party that the persons who have executed this Agreement have been authorized to do so by the party on whose behalf the party is signing. All documents to be delivered under this Agreement will be executed by an authorized person. Each party has a good an legal right to enter into this Agreement and to perform all covenants of that party contained in this Agreement. Section 18. Governing Law. This Agreement shall be governed and constructed in accordance with California law. Section 19. Amendments. This Agreement may only be amended in writing signed by all parties. Section 20. Brokers. Each party will defend, indemnify, and hold the other party harmless from any claim, loss, or liability made or imposed by any other party claiming a commission or fee in connection with this transaction and arising out of that party's own conduct. Section 21. Title Report and Owner's Representations and Warranties. Prior to entering into this Agreement, Owner shall provide City with a copy of a current title report for the Property ("Title Report"). The City's entering into this Agreement is subject to its approval of the Title Report and any exceptions shown in the Title Report. Owner represents and warrants that (a) except for the matters shown in the Title Report, no leases, occupancies, tenancies, or licenses exist that affect the Property; (b) to the best of Owner's knowledge, there are not presently any actions, suits, or proceedings pending or, threatened against or affecting the Property or the interest of Owner in the Property or its use or that would affect Owner's ability to consummate the transaction contemplated in this Agreement; (c) there are not any outstanding and unpaid arbitration awards or judgments affecting title to any portion of the Property, and Owner shall promptly notify City of any of these matters arising during the term of this 6 Dublin Vet Project Option Final 11/18/2014 Agreement; and (d) to the best of Owner's knowledge, there are not presently any pending or threatened condemnation, eminent domain, or similar proceedings affecting the Property. Section 22. Owner's Conduct During Term of Agreement. During the term of this Agreement, Owner shall comply with the following terms relating to the Property: (a) Owner shall pay for all labor and work performed and all material furnished at Owner's request or on Owner's behalf, and there shall be no claim for which a mechanic's, materialman's, or similar lien can be claimed by any person or firm against the Property as a result of any act of Owner; (b) Owner shall not affirmatively take any actions constituting waste of the Property, and shall not excavate, mine, or otherwise materially alter the Property; (c) Owner shall not enter into any lease, occupancy, tenancy, or license agreement affecting the Property, without City's prior written consent; and (d) Owner shall not incur any obligations or liabilities or enter into any transactions that will affect the Property without the prior written consent of City which consent shall not be unreasonably withheld. Section 23. Owner Indemnity of City. Owner shall indemnify, defend and hold harmless the City, any City agencies, and their respective elected and appointed councils, boards, commissions, officers, agents, employees, volunteers and representatives (collectively herein, "City") from any and all loss, liability, fines, penalties, forfeitures, costs and damages and from any and all claims, demands and actions in law or equity (including attorneys' fees and litigation expenses) by any person or entity, directly or indirectly arising or alleged to have arisen out of or in any way relating to the Property during the term of this Agreement. This indemnity provision shall survive termination of this Agreement. Section 24. Hazardous Substances. Prior to entering into this Agreement, Owner shall provide City with a copy of a Phase 1 or Phase 2 Report for the Property, the Alameda County Health Care Services Case Closure letter dated August 4, 2014 relating to the Property, Report of Soil and Groundwater Sampling dated May 10, 2013 (collectively, the "Hazards Report"). The City's entering into this Agreement is subject to its approval of the Hazards Report and any conditions disclosed in the Hazards Report. Owner warrants to City that, except as provided in the Hazards Report, to the best of Owner's actual knowledge, no Hazardous Substances have been disposed of or released into, on, or under the Property; provided however said warranty is subject to the following limitations: Owner has not made or purported to have made any independent investigations or testing for Hazardous Substances on the Property, has not been present on the Property at all times, and shall only be accountable under this Agreement for any misrepresentation as to actual, not constructive, knowledge of the Hazardous Substances on the Property. Section 25. City Remedies for Breach. The City shall have the right to exercise all remedies available under law and equity for any breach of this Agreement by Owner. 7 Dublin Vet Project Option Final 11/18/2014 IN WITNESS WHEREOF, the City and Owner have executed this Agreement as of the date first written above. OWNER: Eden Housing, Inc., a California nonprofit public benefit corporation By: Linda Mandolini, President CITY: CITY OF DUBLIN, a municipal corporation By: Its: Christopher Foss, City Manager 8 Dublin Vet Project Option Final 11/18/2014 EXHIBIT A Property Description B-1 DublinVet Project Option Final 11/18/2014 EXHIBIT B RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Dublin 100 Civic Plaza Dublin, CA 94568 Attention: City Clerk MEMORANDUM OF OPTION DATED: 2014 BETWEEN DEVELOPER: Eden Housing, Inc. 22645 Grand Street Hayward, California 94541-5031 Attention: President AND CITY: City of Dublin 100 Civic Plaza Dublin, CA 94568 Attention: City Manager The Owner has entered into that certain Option Agreement with the City, dated as of (the "Option Agreement"), in which the Owner has granted to the City the option (the "Option") to purchase certain real property owned by the Owner situated in the City of Dublin, County of Alameda, State of California, described in the attached Exhibit A (the "Property"). By the execution and recording of this Memorandum of Option, the Owner and the City desire to give notice to the public of the Option Agreement. The names and addresses of the Owner and the City are as set forth in the first paragraph of this Memorandum. The Property covered by this Memorandum of Option is as set forth in the first paragraph of this Memorandum. The terms of the Option and rights and obligations of the parties are set forth in full in the Option Agreement, the provisions of which are incorporated in this Memorandum by this reference as if set out in full. Nothing in this Memorandum shall constitute or be construed as constituting an B-2 DublinVet Project Option Final 11/18/2014 agreement, revision, or modification to the Option Agreement or the respective rights or obligations of the parties under the Option Agreement. This Memorandum of Option may be executed simultaneously or in counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same document. IN WITNESS WHEREOF, this Memorandum of Option has been duly executed as of the day and year first above written. DEVELOPER: Eden Housing, Inc., a California nonprofit public benefit corporation By: Linda Mandolini, President CITY: CITY OF DUBLIN, a municipal corporation By: Its: Christopher L. Foss, City Manager B-3 DublinVet Project Option Final 11/18/2014 STATE OF CALIFORNIA ) COUNTY OF ) On before me, Notary Public, 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. Name: Notary Public STATE OF CALIFORNIA ) COUNTY OF ) On before me, Notary Public, 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. Name: Notary Public B-4 DublinVet Project Option Final 11/18/2014 B-5 DublinVet Project Option Final 11/18/2014 Exhibit A Property Description 2360308.2 B-6 DublinVet Project Option Final 11/18/2014