Exhibit 10.33

 

SECOND IMPLEMENTATION AGREEMENT

 

TO

 

OWNER PARTICIPATION AGREEMENT

 

by and between

 

THE COMMUNITY REDEVELOPMENT AGENCY

 

OF THE CITY OF LOS ANGELES

 

 

and

 

 

SL NO HO, LLC

 

 

North Hollywood Redevelopment Project

 

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SECOND IMPLEMENTATION AGREEMENT

 

This SECOND IMPLEMENTATION AGREEMENT TO OWNER PARTICIPATION AGREEMENT (this
“Second Implementation Agreement”) is entered into as of December 12, 2003 by
and between THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF LOS ANGELES, a
public body, corporate and politic (the “Agency”), and SL NO HO, LLC, a
California limited liability company (the “Developer”). The Agency and the
Developer are sometimes referred to herein individually as a “Party” and
collectively as the “Parties.”

 

RECITALS

 

The following Recitals are a substantive part of this Second Implementation
Agreement. Unless otherwise defined herein, capitalized terms in this Second
Implementation Agreement shall have the meaning given to them in the OPA, as
hereinafter defined in Recital A.

 

A.       The Agency and Developer entered into that certain Owner Participation
Agreement dated as of March 5, 2002, as amended by that certain First
Implementation Agreement to Owner Participation Agreement dated as of
November 18, 2002 (the “OPA”).

 

B.        Pursuant to the OPA, the Developer is obligated to design, finance and
develop the Project on the Site.

 

C.        Through this Second Implementation Agreement, the Developer and the
Agency intend to revise the description of the improvements to be constructed on
Subarea A and Subarea B; create two phases for the construction of the Subarea B
improvements; revise the Scope of Development and the Schedule of Performance to
make them consistent with the provisions of this Second Implementation
Agreement; clarify the Agency’s obligation regarding the payment of tax
increment; and make certain other clarifying changes to the OPA.

 

D.        The parties are entering into this Second Implementation Agreement for
good and valuable consideration, the receipt of which is hereby acknowledged.

 

NOW, THEREFORE, the Agency and the Developer agree that the OPA shall be amended
as follows:

 

AGREEMENT

 

Section 1.      The Development Site. The second and third sentences of
Section 102: The Development Site are amended to read as follows: “The Site
consists of Subarea A, Subarea B-l, Subarea B-2 and Subarea C and Subarea D,
each of which is illustrated and designated as such on the Site Map with Subarea
B-l and Subarea B-2 specified on the site plan attached to the Second
Implementation Plan as Attachment 1. A Subarea, as used in this Agreement, shall
shall mean Subarea A, Subarea B-l, Subarea B-2, Subarea C and/or Subarea D, as
the context requires.”

 

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Section 2.      Subarea A Improvements. The first sentence of
Section 103.1(a) “Subarea A Improvements” is deleted and replaced with the
following: “The Developer shall construct a residential complex containing
approximately 438 units and associated parking.”

 

Section 3.      Subarea B Improvements. Section 103.1(b) “Subarea B
Improvements” is deleted in its entirety and replaced with the following:

 

“Section 103.1 (b) “Subarea B Improvements”. Subarea B shall be divided into
Subarea B-l and Subarea B-2 and the Developer shall construct the Subarea B
improvements in two phases. The Subarea B-l improvements shall consist of
approximately 60,000 square feet of commercial, retail and restaurant space. The
Subarea B-2 improvements shall consist of residential complex including
approximately 278 residential units and approximately 14 live/work units and a
parking structure providing sufficient parking to comply with City code
requirements for both Subarea B-l and Subarea B-2. Subarea B-l and B-2 are
specified on the site plan attached to the Second Implementation Agreement as
Attachment 1.

 

Section 4.      Subarea C Improvements. The first sentence in
Section 103.1(c) “Subarea C Improvements” is amended to delete the phrase
“42,000 square feet of retail and restaurant space” and to replace the deleted
phrase with the phrase “72,000 square feet of retail and restaurant space.”

 

Section 5.      Affordable Housing Requirements. A new sentence is added to the
first paragraph of Section 103(e)(l) as follows: “In no event shall the
Restricted Units include the live/work units constructed in Subarea B.”

 

Section 6.      Affordable Housing. Section 103.1 is amended to add a new
Section 103.1(e)(4) Calculation of Housing Subsidy to read as follows:

 

“(4)     Calculation of Housing Subsidy. In consideration of the recordation of
the Affordability Covenants, the Agency has agreed, in Attachment No. 8,
Section II, to pay the Developer the Housing Subsidy (defined as the amount
required to offset the projected reduction in revenue resulting from the
recordation of the Affordability Covenants against the residential units to be
constructed on Subareas A and B-2). The amount of the Housing Subsidy shall be
determined as follows: On the first (1st) day of the sixteenth (16th) full month
following Completion of all residential units in a particular Subarea, the
Developer (in conjunction with the Agency), utilizing the data from the then
most recent two (2) months of operation, shall perform the following
calculations:

 

(i)         The Developer (in conjunction with the Agency) shall determine the
average annual market rent per unit being charged for a particular category of
occupied residential units in a particular Subarea which are not Restricted
Units. “Occupied,” as used herein, shall mean any unit that has been occupied
during the most recent two (2) months of operation for at least one (1) day. The
categories of residential units to be considered include one bedroom, two
bedroom and residential loft units. Once the average annual market rent per unit
has been calculated for each category of residential units which are not
Restricted Units, the Developer (in conjunction with the

 

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Agency) shall multiply the average annual market rent by a occupancy factor of
ninety five percent (95%) and then multiply that number by the total number of
Restricted Units in the corresponding category in the applicable Subarea. The
sum of the product of each such multiplication shall be the total annual market
rent for all of the Restricted Units in that Subarea. Such total annual market
rent for the Restricted Units in that Subarea shall hereafter be referred to as
the “Annual Market Rent for Restricted Units.

 

(ii)        The Developer shall subtract from the Annual Market Rent for
Restricted Units in a particular Subarea, the maximum allowable annual rent for
all the Restricted Units, based on the maximum Affordable Rent allowed to be
charged on the Restricted Units pursuant to Section 1(e)(l) of the OPA,
multiplied by a ninety five percent occupancy factor (the “Annual Affordable
Rent”). The difference shall hereinafter be referred to as the “Annual Rental
Shortfall. Since the Affordability Covenants will provide that the Restricted
Units must remain available at Affordable Rent for not less than forty (40)
years from Completion, the Developer (in conjunction with the Agency) shall
project the Annual Rental Shortfall for the required forty (40) year period by
assuming annual increases in the Annual Market Rent for Restricted Units of
three and one-half percent (3-1/2%) and by assuming annual increases in the
Annual Affordable Rent of two and one-half percent (2-1/2%). For each of the
forty (40) years in the projection, Developer shall establish an Annual Rental
Shortfall by subtracting the adjusted Annual Affordable Rent from the adjusted
Annual Market Rent for Restricted Units.

 

(iii)       Once the Annual Rental Shortfall is projected for the 40 year
period, the Developer (in conjunction with the Agency) shall discount such
stream of Annual Shortfalls to its present value by utilizing a discount rate of
eight and eighty seven one hundredths percent (8.87%). Such present value shall
constitute, for purposes of this Subsection 103.1(e)(4), the Housing Subsidy.

 

The Agency shall cause the Housing Subsidy to be paid to the Developer,
allocated by Subarea based on the total number of Restricted Units in each
Subarea, through a combination of (y) a one-time cash payment, in the amount of
Eleven Million Two Hundred Thousand Dollars ($11,200,000) (the “Cash Payment”),
consisting of Five Million Dollars ($5,000,000) of “HOME Funds” and Six Million
Two Hundred Thousand Dollars ($6,200,000) of “Currently Available Housing Trust
Funds,” in each case as such terms are defined in Attachment 8, Section II, A
and B, respectively, of the OPA, and (z) annual payments within an amortization
period that terminates at the end of Agency Fiscal Year 2028-2029, for the
principal amount of the balance of the Housing Subsidy remaining after the Cash
Payment has been made, together with interest on such principal amount at the
rate of six percent (6%) per annum (the “Annual Payments”). A total of one
hundred forty three (143) Restricted Units shall be constructed within the
combined areas of Subarea A and Subarea B-2. One hundred fifteen (115)
Restricted Units shall be constructed in Subarea A. Twenty eight (28) Restricted
Units shall be constructed in Subarea B-2. The Annual Payments shall consist of
an amount equal to the Site-Generated Housing Trust Funds and to the extent
necessary from the North Hollywood Housing Trust Funds, in each case as such
terms are defined in Attachment No. 8, Section II, C and D, of the OPA. If the
Agency elects not to make or elects to reduce the Annual

 

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Payments, then the number of Restricted Units shall be reduced by calculating
the number of Restricted Units which must be returned to market rate to replace
the Agency’s payment. The Agency shall make a good faith effort to notify the
Developer at the earliest practicable time of the Agency’s intention to reduce
the Annual Payments. Once the number of Restricted Units has been reduced due to
the failure to pay the Housing Subsidy, the Developer’s obligation to provide
the Restricted Units shall be forever reduced, the Agency obligation to pay the
Housing Subsidy shall be recalculated using the procedure set forth in this
Section 103.1(e)(4) and the Developer shall not be required to increase the
number of Restricted Units thereafter. If after calculating the Housing Subsidy
pursuant to this Section 103.(1)(e)(4), the Agency and the Developer determine
that the Cash Payment exceeds the Housing Subsidy, the Developer shall reimburse
the Agency the amount of the Cash Payment in excess of the Housing Subsidy. The
Developer shall make the reimbursement within fifteen (15) days following the
determination of any excess Cash Payment. The Agency obligation to make an
Annual Payment under this Section 103.(l)(e)(4) is subject to the Developer’s
timely payment of property tax for the portions of the Site owned by the
Developer. To the extent the Developer fails to pay its required property tax
for a particular year in which the Housing Subsidy Payment is due, the Agency’s
obligation to make a Housing Subsidy Payment shall be reduced by the
Site-Generated Housing Trust Funds which would have been received by the Agency
for that year.

 

The HOME Funds shall be allocated to the Restricted Units in Subarea A. The Six
Million Two Hundred Thousand Dollars ($6,200,000) of Currently Available Housing
Trust Funds shall be allocated across the Restricted Units constructed on
Subarea A and Subarea B. The HOME Funds and the Currently Available Housing
Trust Funds shall be disbursed on the Developer by the Agency as follows. Three
Million Dollars ($3,000,000) of the HOME Funds shall be paid to the Developer as
of the close of escrow for the conveyance to the Developer of the Acquisition
Parcels in Subarea A. The remaining Two Million Dollars ($2,000,000) of HOME
funds shall be paid to the Developer as reimbursement for Subarea A costs at the
later of (i) April 1st, 2004 or (ii) the date of the issuance of the building
permit for the construction of Subarea A Improvements. The prorated payment of
Currently Available Housing Trust Funds for Subarea A in the amount of Three
Million Nine Hundred Sixty Thousand ($3,960,000) shall be paid to the Developer
at the later of (i) the funding of the HUD Loan (or the date the Developer
advances Fourteen Million Dollars to the Agency in lieu of the HUD Loan) or
(ii) the date of the issuance of the building permit for the construction of
Subarea A Improvements. The prorated payment of Currently Available Housing
Trust Funds for Subarea B constituting the balance of the Currently Available
Housing Trust Funds shall be paid to the Developer at the later of (i) the
funding of the HUD Loan (or the date the Developer advances Fourteen Million
Dollars to the Agency in lieu of the HUD Loan) or (ii) the date of the issuance
of the building permit for the construction of Subarea B Improvements. The
Affordability Covenants referenced in Section 103.1(e)(l) shall reflect that
Subarea A shall contain no less than thirty six (36) two bedroom units and four
(4) one-bedroom units restricted as HOME assisted units. No fewer than eight
(8) Home assisted two-bedroom units shall be available to Very Low Income
Households; no fewer than twenty-eight (28) two bedroom units shall be available
to household earning no more than sixty percent (60%) of the area median income
for Los Angeles County and

 

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no fewer than four (4) HOME assisted one bedroom units shall be available to Low
Income Households.”

 

An example of the procedure for the calculation of the Housing Subsidy and the
Annual Payments is attached to this Second Implementation Agreement as
Attachment 2.

 

Section 7.      Project Phasing. The paragraphs addressing the Phase 1, Phase 2
and Phase 3 in Section 103.2 Project Phasing are deleted in their entirety and
replaced with the following:

 

“In Phase 1, the Developer shall develop the Subarea A improvements as described
in Section 103.1(a) and as further specified in the Scope of Development within
Subarea A. Commencement of Construction of the Subarea A improvements shall
occur no later than April 1,2004.

 

In Phase 2, the Developer shall develop the Subarea B-1 improvements as
described in Section 103.l(b) within Subarea B-1. The Developer shall commence
construction of the Subarea B-l improvements not later than January 1, 2005. The
Developer shall develop the Subarea B-2 improvements as described in
Section 103.l(b) within Subarea B-2. Commencement of Construction of the Subarea
B-2 improvements shall occur no later than July 1, 2004.

 

In Phase 3, the Developer shall develop the Subarea C improvements as described
in Section 103.l(c) within Subarea C. Commencement of Construction of the
Subarea C improvements shall occur no later than April 1, 2005.”

 

Section 8.      Parking Covenants. A new Section 103.3 Parking Covenants shall
be added as follows:

 

“In addition to the conditions set forth in Section 506.1, as a condition of the
close of escrow on the parcels comprising Subarea B-2, the Developer shall
record a covenant as an encumbrance against the Subarea B-2 parcels granting the
owner of the Subarea B-l parcels exclusive use of parking spaces within the
parking structure to be constructed on the Subarea B-l parcels in such amount
which meets the City code parking requirement for an approximately 60,000 square
retail development. In the event the Agency exercises its option rights to the
Subarea B-l parcels pursuant to Section 1004, the value of the parking
covenants, if any, shall be included when valuing the Subarea B-l parcels.”

 

Section 9.      Commencement of Construction. A new definition of shall be added
to Article 2 as follows in the appropriate alphabetical order:

 

““Commencement of Construction” means for each Subarea the commencement of
grading and other site preparation activity on that Subarea.”

 

Section 10.    Agency Approval of Plans, Drawings, and Related Documents.
Section 306 shall be amended to add the following as the final sentence to the
Section: “Once the

 

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Agency has approved a progressively more detailed set of drawings and
specifications for a Subarea, all prior less detailed drawings and
specifications submitted for that Subarea upon which the approved subsequent
submittal was based shall be deemed approved, if such previous submittal was not
approved in writing by the Agency.”

 

Section 11.    Offsite Improvements. Section 310.1 Dedication of Property shall
be deleted and replaced with the following:

 

“Section 310.1.  Dedication of Property. The Developer shall dedicate property
required from Subareas A, B and C to allow for the widening of Lankershim
Boulevard, Chandler Boulevard, and Weddington Street. The property to be
dedicated is depicted in an approximate manner on the site plan attached to the
Second Implementation Agreement as Attachment 1. The Developer shall construct
all public improvements along Fair Avenue, Cumpston Street and Weddington Street
as required by the City within the time specified in the Schedule of
Performance. To the extent approved by the City, the Developer shall be entitled
to utilize the dedication of said portions of the Site for any applicable fees,
credits, conditions, mitigations, mitigation measures or other City requirements
otherwise allowed by law.”

 

Section 12.    Community Outreach Plan. A new Section 318.2.5. is added as
follows:

 

“Section 318.2.5       Community Outreach Plan.

 

A.        Submission of Plan: Not later than sixty (60) days following the date
of this Agreement for purposes of Subarea A (and at least sixty days prior to
the Commencement of Construction for Subarea B-l, Subarea B-2 and Subarea C),
the Developer shall meet with the Agency’s Office of Contract Compliance to hold
a preconstruction meeting. During the preconstruction meeting, the Developer
shall be provided with the policies and procedures of the Agency regarding the
MBE and WBE outreach efforts, including the development of a Community Outreach
Plan. The Developer shall be provided samples of Community Outreach Plans which
have been approved by the Agency. Prior to commencing construction of the
Improvements the Developer shall submit the Community Outreach Plan for the
Project to the Agency Administrator or his/her designee for approval which shall
not be unreasonabley withheld. The Community Outreach Plan shall set forth the
methods the Developer will use to comply with this Section 318.2.5. Upon receipt
of the Community Outreach Plan, the Agency shall, within thirty (30) days,
approve or disapprove the Community Outreach Plan, or provide to the Developer a
statement of actions required to be taken in order for the Community Outreach
Plan to be approved. In calculating the percentages in Section 318.2.5.B, all
contracts related to the grading and clearance of a Subarea shall be included
when calculating the applicable percentages. If the Agency fails to respond
within such thirty (30) day period, the Community Outreach Plan shall be deemed
approved by the Agency. Except for Subarea A, the Developer shall not Commence
Construction in any Subarea unless the Community Outreach Plan has been approved
or deemed approved by the Agency.

 

B.        Contents of the Community Outreach Plan: The Community Outreach Plan
shall include, at a minimum:

 

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1.         Estimated total dollar amount (by trade) of all contracts and
subcontracts to be let by the Developer or its prime contractor for the
Improvements;

 

2.         List of all proposed M/WBEs that will be awarded a contract by the
Developer or the prime contractor(s);

 

3.         Estimated dollar value of all proposed M/WBE contracts;

 

4.         Provide documentation demonstrating that reasonable efforts were made
by the Developer and/or prime contractor to meet the Agency’s combined goal of
twenty-five percent (25%) for MBE and WBE participation ONLY IF COMBINED GOALS
ARE NOT MET;

 

5.         Evidence of M/WBE Certification of all firms listed as MBE or WBE in
the Plan;

 

Firms purporting to be M/WBE do not require M/WBE Certification if their
contract amount is less than Twenty Five Thousand Dollars ($25,000). Any firm
for which the contract amount exceeds Twenty Five Thousand Dollars ($25,000) and
which is not certified by the City of Los Angeles may not be considered an MBE
or WBE for purposes of this Agreement.

 

6.         Description of the actions to be taken to meet the project area
resident and business utilization objectives.

 

7.         Such other information and documentation with respect to the
foregoing objectives as the Agency may reasonably deem necessary.

 

C.        General Information.

 

1.         During the construction of the Improvements, the Developer shall
provide to the Agency such information and documentation as reasonably requested
by the Agency.

 

2.         The Developer shall monitor and enforce the affirmative action and
equal opportunity requirements imposed by this Agreement. In the event the
Developer fails to monitor or enforce these requirements the Agency may declare
the Developer in default of this Agreement (subject to the notice and cure
rights provided in this Agreement) and thereafter pursue any of the remedies
available under this Agreement.

 

Section 13.    Prevailing Wage. Section 318.3 (2) is deleted and a new
Section 318.3(2) is added as follows:

 

“(2) Failure to provide all reasonably requested records and/or provide access
to job site or worker: Five Thousand Dollars ($5000) per day, or portion
thereof.”

 

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Section 14.            HUD Loan. Section 402.1.1.(e) is amended to add the
following sentence to the end of the paragraph: “Upon the Agency’s conveyance of
the Acquisition Parcels in Subarea A to the Developer, the Developer’s right to
terminate this Agreement pursuant to this Section 402.1.1.(e) shall be
terminated.”

 

Section 15.            Developer Advance. Section 402.6.1 Original Letter of
Credit is deleted and replaced with the following:

 

“Section 402.6.1                     Original Letter of Credit. Provided the
Agreement has not theretofore been terminated pursuant to Section 1003, the
Developer shall deliver to the Agency cash or an irrevocable at-sight, standby
letter of credit, first approved in writing by the Agency as to form, content
and issuer, in an amount determined in the second paragraph of this
Section 402.6.1 and otherwise complying with the requirements of this Agreement
(the “Original Letter of Credit”).

 

The Original Letter of Credit shall be provided in two phases. The first phase
of the Original Letter of Credit shall consist of an amount equal to the
difference between the amount of the Developer Advance attributable to Subarea A
and Subarea B and the immediately available Acquisition Funds, as established by
the Agency based on budgets prepared by the Agency and reviewed by the
Developer. The amount of the Original Letter of Credit for the first phase
(consisting of Subarea A and Subarea B) shall be an amount equal to the
difference between Nineteen Million Dollars ($19,000,000) and the Purchase
Price, calculated as Twelve Million Three Hundred Six Thousand Five Hundred
Thirty Nine Dollars ($12,306,539). The Developer shall deliver to the Agency a
portion of the first phase Original Letter of Credit currently with the purchase
from the Agency of the Acquisition Parcels in Subarea A. The Developer shall pay
a portion of the Purchase Price to the Agency at the close of escrow for the
purchase of the Subarea A Acquisition Parcels in the amount of Three Million
Eight Hundred Thirty Two Thousand Three Hundred Fifty Eight Dollars
($3,832,358). In addition, concurrently with the close of escrow for the Subarea
A Acquisition Parcels, the Developer shall advance to the Agency as part of the
Original Letter of Credit the amount of One Million One Hundred Sixty Seven
Thousand Six Hundred Forty Two Dollars ($1,167,642). The balance of the first
phase of the Original Letter of Credit in the amount of Five Million Five
Hundred Twenty Five Thousand Eight Hundred Nineteen Dollars ($5,525,819) shall
be provided in the form of the Developer’s assumption of the Section 108 Loan
for a total Developer Advance under the first phase of the Original Letter of
Credit in the amount of Six Million Six Hundred Ninety Three Thousand Four
Hundred Sixty One Dollars ($6,693,461).

 

The second phase of the Original Letter of Credit shall consist of an amount
equal to the difference between the amount of the Developer Advance attributable
to Subarea C and Subarea D, if applicable, and any remaining unencumbered
Acquisition Funds, as established by the Agency based on budgets prepared by the
Agency and reviewed by the Developer. The Parties acknowledge that sufficient
funds have not been identified to cover the costs attributable to Subarea C and
Subarea D and that the second phase of the Original Letter of Credit may require
the Developer to increase the initial Six Million Six

 

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Hundred Ninety Three Thousand Four Hundred Sixty One Dollars ($6,693,461)
amount. The Agency and the Developer shall work together to attempt to identify
and obtain reasonable alternative funding sources for the Subarea C and Subarea
D costs prior to requiring the Developer to provide the second phase of the
Original Letter of Credit. Notwithstanding the foregoing, the Parties agree that
in the event reasonable alternative funding sources cannot be identified and
obtained by the Agency, the Developer shall provide the second phase of the
Original Letter of Credit no later than thirty (30) days following the Agency’s
written request for such second phase Original Letter of Credit. Notwithstanding
the foregoing, if the Developer provides the second phase of the Original Letter
of Credit, the Agency agrees to negotiate in good faith with the Developer a
mutually agreeable arrangement by which the Developer shall be reimbursed for
the funds advanced in the second phase of the Original Letter of Credit in a
commercially reasonable manner.”

 

Section 16.            Definition of Project Costs. Subsection 6 of
Section 601.2 Definition of Project Costs is be amended to add to the end of the
sentence: “and imputed interest on Developer equity at a rate equal to the rate
of interest of the construction loan for the particular Subarea. For purposes of
this Section 601.2, Developer equity for a particular Subarea shall be defined
as the difference between the total amount of Project Costs as set forth in the
approved Certified Project Cost Statement, as defined below, for that particular
Subarea and third party debt encumbering that particular Subarea.”

 

Section 17.            Form of Participation. The second paragraph of
Section 605.2 Form of Participation is amended to add to the end of the
paragraph: “Notwithstanding the Developer’s payment obligations set forth in
this Section 605.2 and 605.3, below, any amounts owed to the Agency as an Agency
Participation Payment shall first be applied to repayment of the Developer
Advance, as calculated pursuant to Attachment 8, Section I.B., to the extent the
Developer Advance has not been fully repaid, and then to the Agency. Pursuant to
this Section 605.2 for offset of Agency Participation Payments against unpaid
Developer Advance, and to the extent unpaid Developer Advance exists at the time
of a refinance or a First Sale (as defined in Section 605.3(c) below) in Subarea
A occurs, an amount equal to the lesser of (i) the amount of the unpaid
Developer Advance and (ii) Three Million Dollars ($3,000,000) shall be available
to offset any Agency Participation Payment due from the refinance or First Sale
in Subarea A. Following a First Sale in Subarea A, any and all remaining unpaid
Developer Advance shall be available to offset the amount of Agency
Participation Payment due in Subarea B-l,B-2, and C. If a refinance or First
Sale occurs in Subarea B-l, B-2, and C prior to a refinance of First Sale in
Subarea A, an amount sufficient to pay down the unpaid Developer Advance to
Three Million Dollars ($3,000,000) shall be available to offset the amount of
Agency Participation Payment due in Subarea B-1, B-2, and C.”

 

Section 18.            Holder’s Right to Cure. Section 703.3 is deleted in its
entirety and replaced with the following:

 

“Each holder of mortgages, deeds of trust, and other real property security
instruments approved by the Agency pursuant to Section 109, above, shall be
referred to as a “Lender” The Developer shall provide to the Agency the
appropriate contact information for each Lender securing its lien by the
Subarea, if the Lender wishes to

 

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obtain notice from the Agency pursuant to this Section 703.3. The Developer
shall provide the appropriate contact information concurrently with the close of
escrow of each Subarea or at such later time when the approved Lender records
its liens against the appropriate Subarea. Whenever the Agency pursuant to its
rights set forth in Article 10 delivers any notice or demand to the Developer
with respect to the commencement, completion, or cessation of the construction
of the Development, the Agency shall at the same time deliver to Lender having a
lien upon the Subarea a copy of such notice or demand affecting such Subarea.
Each Lender on a Subarea shall (insofar as the rights of the Agency are
concerned) have the right, but not the obligation, at its option, within ninety
(90) days after the receipt of the notice, to cure or remedy any such default or
breach related to that Subarea by the Developer under this Agreement; provided,
however, that in case of a default which cannot with diligence be remedied or
cured within the ninety (90) day period, such Lender shall have such additional
time as reasonably necessary to remedy or cure such default as long as the
Lender commences to cure within ninety (90) days of receipt of the notice and
diligently prosecutes the cure to completion. In no event may the Lender fail to
cure within one hundred eighty (180) days from the date the Lender obtains
lawful possession of the Subarea related to the such breach. Any Lender who
forecloses on its deed of trust or is assigned, in lieu of foreclosure, the
Developer’s rights under this Agreement as to any Subarea, shall have the right,
but not the obligation, to undertake or to continue the construction or
completion of the improvements on the Subarea upon execution of a written
agreement with the Agency by which such Lender assumes the Developer’s rights
and obligations under this Agreement as to the Subarea, approval of which
agreement shall not be unreasonably, withheld, delayed or conditioned by the
Agency. Any such Lender properly completing the improvements on such Subarea
shall be entitled, upon written request made to the Agency, to a Certificate of
Completion and a Release of the Construction Covenants for the Subarea from the
Agency subject to the provisions of Section 319.

 

Section 19.            Agency Option to Acquire. Section 1004 shall be amended
to add the following two sentences immediately prior to the last sentence in the
Section:

 

“In the event that the Agency exercises the Agency Option, any proceeds paid by
the Agency to the Developer shall first be paid by the Developer to the Lender
(as defined in Section 703.3) holding the first lien on the Developer Parcel
being purchased by the Agency until such time as the lender is repaid all
indebtedness owed to lender by the Developer. Any exercise of the Agency Option
shall not extinguish or impair the liens, security interests and assignments
held by a Lender to any of the Developer Parcels, it being agreed that the
Agency Option shall be subordinate to any valid first lien deed of trust or
mortgage held by a Lender.”

 

Section 20.            Scope of Development. Attachment No. 1 Scope of
Development is amended to conform the square footages and numbers of units in
the revisions to the Subarea B improvements and Subarea C improvements as set
forth in Section 2 of this Second Implementation Agreement.

 

10

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Section 21.            Schedule of Performance. Attachment No. 7 Schedule of
Performance is deleted and replaced with a new Schedule of Performance attached
to this Second Implementation Agreement as Attachment 3.

 

Section 22.            Public-Private Feasibility Agreement. Section I.A and
Section I.B. of Attachment No. 8 Public-Private Feasibility Agreement are
deleted and replaced with the following:

 

“I.                       Use of Available Site-Generated Property Tax Increment

 

A.                       HUD Loan Repayment. As set out in Section 402.1.1, the
Agency intends to obtain the HUD Loan from the City. As a condition of obtaining
the HUD Loan, the City will require the Agency to execute a loan agreement and
certain related documents to evidence the Agency’s obligation to repay the HUD
Loan and to comply with the HUD Requirements (the “HUD Loan Documents”). If the
Agency is successful in obtaining the HUD Loan, the Developer shall assume the
Agency’s obligations under the HUD Documents concurrently with the conveyance by
the Agency of Subarea B-2 to the Developer. In addition, as a condition of the
conveyance of Subarea B-2, the Developer shall deliver to the Agency and the
City a Guaranty, in a form reasonably acceptable to the Agency and the City,
guarantying the Developer’s repayment of the HUD Loan. The Agency shall have the
right to obtain payment on the Guaranty upon the Developer’s failure to make any
payment on the HUD Loan required pursuant to the HUD Loan Documents, and with no
duty on the part of the Agency to first enforce any remedy to collect amounts in
default from Developer. The Developer’s assumption of the HUD Loan shall
constitute the partial payment of the Purchase Price in the amount Eight Million
Four Hundred Seventy Four Thousand One Hundred Eighty One Dollars ($8,474,181)
which when combined with the payment of Three Million Eight Hundred Thirty Two
Thousand Three Hundred Fifty Eight Dollars ($3,832,358) made by the Developer at
the close of escrow of Subarea A shall equal a total Purchase Price of Twelve
Million Three Hundred Six Thousand Five Hundred Thirty Nine Dollars
($12,306,539). The remainder of the amount of the HUD Loan in the amount of Five
Million Five Hundred Twenty Five Thousand Eight Hundred Nineteen Dollars
($5,525,819) shall be credited to the Developer as an advance under the first
phase of the Original Letter of Credit for a total Developer Advance, when added
to the One Million One Hundred Sixty Seven Thousand Six Hundred Forty Two
Dollars ($1,167,642), of Six Million Six Hundred Ninety Three Thousand Four
Hundred Sixty One Dollars ($6,693461).

 

1.                            The Agency will use every reasonable effort to
enter into an agreement with the City whereby the City will provide an EDI Grant
to the Agency in the amount of One Million Eight Hundred Thousand Dollars
($1,800,000). The EDI Grant proceeds will be applied to the payment of interest
accruing on the HUD Loan for the initial twenty four (24) months and for the
payment of loan fees. Any remaining EDI Grant proceeds may be applied to
eligible EDI costs, including acquisition related costs, with the prior approval
of the City and the Agency.

 

2.                            Subject to all of the terms and conditions of this
Agreement and in consideration for and subject to the condition that the
Developer assumes the HUD Loan, as of the date the Developer assumes the HUD
Loan, the Agency agrees to pay to the Developer or its Agency approved assignee
a total of Six Million Fifty Thousand Dollars ($6,050,000) plus

 

11

--------------------------------------------------------------------------------

 

interest, as set forth below. The Agency payment to the Developer or its Agency
approved assignee shall be an amount equal to fifty percent (50%) of Available
Site-Generated Property Tax Increment received by the Agency during the prior
Agency Fiscal Year from Subarea A (the “Subarea A 50% Increment”) and fifty
percent (50%) of Available Site-Generated Property Tax Increment received by the
Agency during the prior Agency Fiscal Year from Subarea B and Subarea C (the
“Subarea B/C 50% Increment”). Interest on the Agency’s Six Million Fifty
Thousand Dollars ($6,050,000) payment obligation shall be equal to the fixed
interest rate under the HUD Loan and shall begin to accrue at the later of
(a) the date the HUD Loan converts to a fixed rate or (b) of the first September
30th which follows the Completion Date. The Agency’s payment of the Six Million
Fifty Thousand Dollars ($6,050,000) plus interest pursuant to this Section I.A.2
shall be allocated as follows. The Agency shall pay to the Developer, as the
owner of the Subarea A Improvements, or its Agency approved assignee, a total of
Three Million Dollars ($3,000,000) plus interest accrued thereon (the “Subarea A
Increment Payment”). The Agency shall make the Subarea A Increment Payment set
forth in this Section I.A.2. from Subarea A 50% Increment in annual installments
on or before September 30th of each year, beginning with the first September
30th which follows the Completion Date of the Subarea A Improvements until such
time as the Agency’s Subarea A Increment Payment obligation is paid in full or
October 1st, 2028, whichever is earlier. The Agency shall pay to the Developer,
as the owner of the Subarea B Improvements, or its Agency approved assignee, a
total of Three Million Fifty Thousand Dollars ($3,050,000) plus interest accrued
thereon (the “Subarea B Increment Payment”). The Agency shall make the Subarea B
Increment Payment set forth in this Section I.A.2. from Subarea B/C 50%
Increment in annual installments on or before September 30th of each year,
beginning with the first September 30th which follows the Completion Date of the
Subarea B Improvements until such time as the Agency’s Subarea B Increment
Payment obligation is paid in full or October 1st, 2028, whichever is earlier.
In no event shall the Agency’s total obligation under the Subarea A Increment
Payment when added to the Subarea B Increment Payment exceed Six Million Fifty
Thousand Dollars ($6,050,000) plus interest set forth herein. The Agency hereby
covenants to refrain from taking any action that would diminish or impair in any
way its receipt (and subsequent payment of the Agency obligation) of Available
Site-Generated Property Tax Increment.

 

3.                            If the Agency is unable to obtain the HUD Loan and
the Original Letter of Credit required of the Developer is increased as a result
thereof (hereinafter a “Trigger Event”), the Agency shall thereafter make
payments to the Developer in an amount equal to the Available Site-Generated
Property Tax Increment in the amounts set forth in this Paragraph I.A.3. The
principal amount of the Agency obligation under this Paragraph I.A.3 shall equal
Six Million Fifty Thousand Dollars ($6,050,000) on the date of the Trigger Event
(the “Unpaid Principal”). The Unpaid Principal shall bear interest at the rate
of six percent (6%) per annum from the date of the Trigger Event. The Agency
shall make payments in the time and manner specified in Section I.A.2. The
Agency hereby covenants to refrain from taking any action that would diminish or
impair in any way its receipt (and subsequent payment of the Unpaid Principal
and interest thereon) of Available Site-Generated Property Tax Increment.

 

B.                         Repayment of Developer’s Advance of Costs. Subject to
all of the terms and conditions of this Agreement (including, without
limitation, the provisions of Paragraph I.E. below limiting the Agency’s payment
obligation hereunder to particular sources of

 

12

--------------------------------------------------------------------------------

 

funds), the principal amount payable by the Agency to the Developer under this
Paragraph I.B. of this Attachment No. 8 shall be an amount equal to (i) the
amount of the Developer Advance determined pursuant to Section 402.6 of the
Owner Participation Agreement; less (ii) the Acquisition Funds used by the
Agency to acquire any portion of the Site; plus (iii) an amount equal to the
Purchase Price; which net amount shall bear interest at the rate of six percent
(6%) per annum from the date of disbursement.

 

1.                            Subject to all the terms and conditions of this
Agreement, on or before September 30th of each year, beginning with the first
September 30th which follows the Completion Date, and continuing until the
Agency obligation under this Paragraph I.B. (and any accrued interest thereon)
has been paid in full, the Agency shall pay to the Developer an amount equal to
forty percent (40%) of Available Site-Generated Property Tax Increment received
by the Agency during the prior Agency Fiscal Year. The Agency hereby covenants
to refrain from taking any action that would diminish or impair in any way its
receipt (and subsequent payment of the Agency obligation and interest thereon)
of Available Site-Generated Property Tax Increment.

 

2.                            The Agency obligation purusant to this Paragraph
I.B shall continue until the Agency obligation is paid in full or October 1st,
2028, whichever is earlier.”

 

Section 23.            HOME Requirements. A new Attachment No. 18 shall be added
to the OPA entitled HOME Requirements. The form of the new Attachment 18 is
attached to this Second Implementation Agreement as Attachment 4. As a result of
the HOME funding for the Subarea A Improvements, the Developer shall comply with
and shall cause its contractors and all subcontractors to comply with the
requirements of the Davis-Bacon Act (40 U.S.C. 276 et seq.) in the construction
of the Subarea A Improvements.

 

Section 24.            No Other Changes, Consistency. Notwithstanding any
changes and deletions contained herein, all other provisions of the OPA remain
the same. In the event of any conflict between the terms of the OPA and this
Second Implementation Agreement, the terms of this Second Implementation
Agreement shall govern.

 

13

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereby have executed this Second Implementation
Agreement as of the date first above written.

 

 

DEVELOPER:

 

 

 

SL No Ho, LLC a California limited liability company

 

 

 

By:

/s/ Clifford P. Goldstein

 

 

Clifford P. Goldstein

 

 

 

 

Its:

Authorized Member

 

 

 

 

 

AGENCY:

 

 

 

THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF LOS ANGELES, CALIFORNIA

 

 

 

By:

/s/ Robert Ovrum

 

 

Robert Ovrum

 

 

 

 

Its:

Chief Executive Officer

 

 

 

 

 

 

APPROVED AS TO FORM:

 

 

 

 

 

ROCKARD J. DELGADILLO CITY ATTORNEY

 

 

 

 

 

 

 

 

By:

/s/ Authorized Signatory

 

 

 

Assistant/Deputy City Attorney

 

 

 

 

 

 

APPROVED AS TO FORM:

 

 

 

 

 

 

 

 

By:

/s/ Authorized Signatory

 

 

 

Agency Special Counsel

 

 

 

14

--------------------------------------------------------------------------------

 

TABLE 1

 

ANNUAL MARKET RENT FOR RESTRICTED UNITS CALCULATION EXAMPLE
NOHO COMMONS
LOS ANGELES, CALIFORNIA

 

 

 

 

 

Subarea A

 

Subarea B-2

 

I.

 

Project Description

 

 

 

 

 

 

 

Market Rate Units

 

323

 

250

 

 

 

Restricted Units

 

115

 

28

 

 

 

 

 

 

 

 

 

 

 

Total Units

 

438

 

278

 

 

 

 

 

 

 

 

 

II.

 

Number of Occupied Market Units by Category (1)

 

 

 

 

 

 

 

One-Bedroom Units

 

158

 

NA

 

 

 

Two-Bedroom Units

 

90

 

NA

 

 

 

Residential Loft Units

 

NA

 

125

 

 

 

 

 

 

 

 

 

 

 

Total Occupied Market Units

 

248

 

125

 

 

 

 

 

 

 

 

 

III.

 

Annualized Rental Revenue of Occupied Units by Category

 

 

 

 

 

 

 

One-Bedroom Units

 

$

2,652,000

 

NA

 

 

 

Two-Bedroom Units

 

$

2,061,000

 

NA

 

 

 

Residential Loft Units

 

NA

 

$

2,292,000

 

 

 

 

 

 

 

 

 

IV.

 

Average Annual Market Rent per Unit by Category

 

 

 

 

 

 

 

One-Bedroom Units

 

$

16,800

 

NA

 

 

 

Two-Bedroom Units

 

$

22,900

 

NA

 

 

 

Residential Loft Units

 

NA

 

$

18,300

 

 

 

 

 

 

 

 

 

V.

 

Occupancy Factor (2)

 

95

%

95

%

 

 

 

 

 

 

 

 

VI.

 

Average Effective Gross Income per Unit by Category

 

 

 

 

 

 

 

One-Bedroom Units

 

$

16,000

 

NA

 

 

 

Two-Bedroom Units

 

$

21,800

 

NA

 

 

 

Residential Loft Units

 

NA

 

$

17,400

 

 

 

 

 

 

 

 

 

VII.

 

Number of Restricted Units by Category

 

 

 

 

 

 

 

One-Bedroom Units

 

60

 

NA

 

 

 

Two-Bedroom Units

 

55

 

NA

 

 

 

Residential Loft Units

 

NA

 

28

 

 

 

 

 

 

 

 

 

 

 

Total Restricted Units

 

115

 

28

 

 

 

 

 

 

 

 

 

VIII.

 

Annual Market Rent for Restricted Units (VI x VII)

 

$

2,159,000

 

$

487,000

 

 

--------------------------------------------------------------------------------

(1)                     Illustrative only, should be actual number of units
occupied at calculation.

(2)                     Established in the Second Implementation Agreement to
the OPA.

 

Prepared by: Keyser Marston Associates, Inc.

Filename: NoHo Commons_ 929 -10% Phase II; Att 2 - Table 1; jlr; 12/18/2003

 

--------------------------------------------------------------------------------

 

TABLE 2

 

ANNUAL RENTAL SHORTFALL CALCULATION EXAMPLE
NOHO COMMONS
LOS ANGELES, CALIFORNIA

 

 

 

 

 

Subarea A

 

Subarea B-2

 

I.

 

Annual Affordable Rent Calculation

 

 

 

 

 

 

 

A. Maximum Allowable Annual Rent for Restricted Units

 

$

1,126,100

 

$

229,800

 

 

 

 

 

 

 

 

 

 

 

B. Occupancy Factor (1)

 

95

%

95

%

 

 

 

 

 

 

 

 

 

 

Annual Affordable Rent (A x B)

 

$

1,070,000

 

$

218,000

 

 

 

 

 

 

 

 

 

II.

 

Annual Rental Shortfall Calculation

 

 

 

 

 

 

 

Annual Market Rent for Restricted Units

 

$

2,159,000

 

$

487,000

 

 

 

(Less) Annual Affordable Rent

 

(1,070,000

)

(218,000

)

 

 

 

 

 

 

 

 

III.

 

Annual Rental Shortfall

 

$

1,089,000

 

$

269,000

 

 

--------------------------------------------------------------------------------

(1)                     Established in the Second Implementation Agreement to
the OPA.

 

Prepared by: Keyser Marston Associates, Inc.

Filename: NoHo Commons_ 929 - 10% Phase II; Att 2 - Table 1; jlr; 12/16/2003

 

--------------------------------------------------------------------------------

 

TABLE 3

 

HOUSING SUBSIDY CALCULATION EXAMPLE
NOHO COMMONS
LOS ANGELES, CALIFORNIA

 

 

 

Year 1

 

Year 2

 

Year 3

 

Year 4

 

Year 5

 

Year 6

 

Year 7

 

Year 8

 

Year 9

 

Year 10

 

I.

Subarea A: Housing Subsidy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annual Market Revenues for Restricted Units (1)

 

$

2,159,000

 

$

2,234,600

 

$

2,312,800

 

$

2,393,700

 

$

2,477,500

 

$

2,564,200

 

$

2,653,900

 

$

2,746,800

 

$

2,842,900

 

$

2,942,400

 

 

(Less) Annual Affordable Revenue(2)

 

(1,070,000

)

(1,096,800

)

(1,124,200

)

(1,152,300

)

(1,181,100

)

(1,210,600

)

(1,240,900

)

(1,271,900

)

(1,303,700

)

(1,336,300

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annual Rental Shortfall Projection

 

$

1,089,000

 

$

1,137,800

 

$

1,188,600

 

$

1,241,400

 

$

1,296,400

 

$

1,353,600

 

$

1,413,000

 

$

1,474,900

 

$

1,539,200

 

$

1,606,100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subarea A: Housing Subsidy(3)

 

$

21,336,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

II.

Subarea B: Housing Subsidy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annual Market Revenues for Restricted Units(1)

 

$

487,000

 

$

504,000

 

$

521,600

 

$

539,900

 

$

558,800

 

$

578,400

 

$

598,600

 

$

619,600

 

$

641,300

 

$

663,700

 

 

(Less) Annual Affordable Revenue(2)

 

(218,000

)

(223,500

)

(229,100

)

(234,800

)

(240,700

)

(246,700

)

(252,900

)

(259,200

)

(265,700

)

(272,300

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annual Rental Shortfall Projection

 

$

269,000

 

$

280,500

 

$

292,500

 

$

305,100

 

$

318,100

 

$

331,700

 

$

345,700

 

$

360,400

 

$

375,600

 

$

391,400

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subarea B: Housing Subsidy(3)

 

$

5,175,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

(1)                     The Second Implementation Agreement establishes the
annual increase in market rate unit rental revenue @ 3.50%.

(2)                     The Second Implementation Agreement establishes the
annual increase in restricted unit rental revenue @ 2.50%.

(3)                     The Second Implementation Agreement establishes the
discount rate @ 8.87%.

 

Prepared by: Keyser Marston Associates, Inc.

Filename: NoHo Commons_929 - 10% Phase II; Att 2 - Table 3; jlr; 12/16/2003

 

--------------------------------------------------------------------------------

 

TABLE 3

 

HOUSING SUBSIDY CALCULATION EXAMPLE
NOHO COMMONS
LOS ANGELES, CALIFORNIA

 

 

 

Year 11

 

Year 12

 

Year 13

 

Year 14

 

Year 15

 

Year 16

 

Year 17

 

Year 18

 

Year 19

 

Year 20

 

I.

Subarea A: Housing Subsidy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annual Market Revenues for Restricted Units(1)

 

$

3,045,400

 

$

3,152,000

 

$

3,262,300

 

$

3,376,500

 

$

3,494,700

 

$

3,617,000

 

$

3,743,600

 

$

3,874,600

 

$

4,010,200

 

$

4,150,600

 

 

(Less) Annual Affordable Revenue(2)

 

(1,369,700

)

(1,403,900

)

(1,439,000

)

(1,475,000

)

(1,511,900

)

(1,549,700

)

(1,588,400

)

(1,628,100

)

(1,668,800

)

(1,710,500

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annual Rental Shortfall Projection

 

$

1,675,700

 

$

1,748,100

 

$

1,823,300

 

$

1,901,500

 

$

1,982,800

 

$

2,067,300

 

$

2,155,200

 

$

2,246,500

 

$

2,341,400

 

$

2,440,100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subarea A: Housing Subsidy(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

II.

Subarea B: Housing Subsidy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annual Market Revenues for Restricted Units(1)

 

$

686,900

 

$

710,900

 

$

735,800

 

$

761,600

 

$

788,300

 

$

815,900

 

$

844,500

 

$

874,100

 

$

904,700

 

$

936,400

 

 

(Less) Annual Affordable Revenue(2)

 

(279,100

)

(286,100

)

(293,300

)

(300,600

)

(308,100

)

(315,800

)

(323,700

)

(331,800

)

(340,100

)

(348,600

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annual Rental Shortfall Projection

 

$

407,800

 

$

424,800

 

$

442,500

 

$

461,000

 

$

480,200

 

$

500,100

 

$

520,800

 

$

542,300

 

$

564,600

 

$

587,800

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subarea B: Housing Subsidy(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

(1)                     The Second Implementation Agreement establishes the
annual increase in market rate unit rental revenue @ 3.50%.

(2)                     The Second Implementation Agreement establishes the
annual increase in restricted unit rental revenue @ 2.50%.

(3)                     The Second Implementation Agreement establishes the
discount rate @ 8.87%.

 

--------------------------------------------------------------------------------

 

TABLE 3

 

HOUSING SUBSIDY CALCULATION EXAMPLE

NOHO COMMONS

LOS ANGELES, CALIFORNIA

 

 

 

 

Year 21

 

Year 22

 

Year 23

 

Year 24

 

Year 25

 

Year 26

 

Year 27

 

Year 28

 

Year 29

 

Year 30

 

I.

Subarea A: Housing Subsidy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annual Market Revenues for Restricted Units(1)

 

$

4,295,900

 

$

4,446,300

 

$

4,601,900

 

$

4,763,000

 

$

4,929,700

 

$

5,102,200

 

$

5,280,800

 

$

5,465,600

 

$

5,656,900

 

$

5,854,900

 

 

(Less) Annual Affordable Revenue(2)

 

(1,753,300

)

(1,797,100

)

(1,842,000

)

(1,888,100

)

(1,935,300

)

(1,983,700

)

(2,033,300

)

(2,084,100

)

(2,136,200

)

(2,189,600

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annual Rental Shortfall Projection

 

$

2,542,600

 

$

2,649,200

 

$

2,759,900

 

$

2,874,900

 

$

2,994,400

 

$

3,118,500

 

$

3,247,500

 

$

3,381,500

 

$

3,520,700

 

$

3,665,300

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subarea A: Housing Subsidy(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

II.

Subarea B: Housing Subsidy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annual Market Revenues for Restricted Units(1)

 

$

969,200

 

$

1,003,100

 

$

1,038,200

 

$

1,074,500

 

$

1,112,100

 

$

1,151,000

 

$

1,191,300

 

$

1,233,000

 

$

1,276,200

 

$

1,320,900

 

 

(Less) Annual Affordable Revenue(2)

 

(357,300

)

(366,200

)

(375,400

)

(384,800

)

(394,400

)

(404,300

)

(414,400

)

(424,800

)

(435,400

)

(446,300

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annual Rental Shortfall Projection

 

$

611,900

 

$

636,900

 

$

662,800

 

$

689,700

 

$

717,700

 

$

746,700

 

$

776,900

 

$

808,200

 

$

840,800

 

$

874,600

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subarea B: Housing Subsidy(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

(1)          The Second Implementation Agreement establishes the annual increase
in market rate unit rental revenue @ 3.50%.

(2)          The Second Implementation Agreement establishes the annual increase
in restricted unit rental revenue @ 2.50%.

(3)          The Second Implementation Agreement establishes the discount rate @
8.87%.

 

--------------------------------------------------------------------------------

 

TABLE 3

 

HOUSING SUBSIDY CALCULATION EXAMPLE

NOHO COMMONS

LOS ANGELES, CALIFORNIA

 

 

 

 

Year 31

 

Year 32

 

Year 33

 

Year 34

 

Year 35

 

Year 36

 

Year 37

 

Year 38

 

Year 39

 

Year 40

 

I.

Subarea A: Housinq Subsidy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annual Market Revenues for Restricted Units(1)

 

$

6,059,800

 

$

6,271,900

 

$

6,491,400

 

$

6,718,600

 

$

6,953,800

 

$

7,197,200

 

$

7,449,100

 

$

7,709,800

 

$

7,979,600

 

$

8,258,900

 

 

(Less) Annual Affordable Revenue(2)

 

(2,244,300

)

(2,300,400

)

(2,357,900

)

(2,416,800

)

(2,477,200

)

(2,539,100

)

(2,602,600

)

(2,667,700

)

(2,734,400

)

(2,802,800

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annual Rental Shortfall Projection

 

$

3,815,500

 

$

3,971,500

 

$

4,133,500

 

$

4,301,800

 

$

4,476,600

 

$

4,658,100

 

$

4,846,500

 

$

5,042,100

 

$

5,245,200

 

$

5,456,100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subarea A: Housing Subsidy(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

II.

Subarea B: Housing Subsidy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annual Market Revenues for Restricted Units(1)

 

$

1,367,100

 

$

1,414,900

 

$

1,464,400

 

$

1,515,700

 

$

1,568,700

 

$

1,623,600

 

$

1,680,400

 

$

1,739,200

 

$

1,800,100

 

$

1,863,100

 

 

(Less) Annual Affordable Revenue(2)

 

(457,500

)

(468,900

)

(480,600

)

(492,600

)

(504,900

)

(517,500

)

(530,400

)

(543,700

)

(557,300

)

(571,200

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annual Rental Shortfall Projection

 

$

909,600

 

$

946,000

 

$

983,800

 

$

1,023,100

 

$

1,063,800

 

$

1,106,100

 

$

1,150,000

 

$

1,195,500

 

$

1,242,800

 

$

1,291,900

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subarea B: Housing Subsidy(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

(1)          The Second Implementation Agreement establishes the annual increase
in market rate unit rental revenue @ 3.50%.

(2)          The Second Implementation Agreement establishes the annual increase
in restricted unit rental revenue @ 2.50%.

(3)          The Second. Implementation Agreement establishes the discount rate
@ 8.87%.

 

--------------------------------------------------------------------------------

 

TABLE 4

 

ANNUAL PAYMENTS CALCULATION EXAMPLE

NOHO COMMONS

LOS ANGELES, CALIFORNIA

 

 

 

 

SUBAREA A

 

SUBAREA B-2

 

 

 

 

 

 

 

 

I.

Housing Subsidy (Table 2)

 

$

 21,336,000

 

$

 5,175,000

 

 

 

 

 

 

 

 

II.

Cash Payment Calculation (1)

 

 

 

 

 

 

HOME Funds

 

$

 5,000,000

 

$

 0

 

 

Currently Available Housing Trust Funds

 

3,960,000

 

2,240,000

 

 

 

 

 

 

 

 

 

Total Cash Payment

 

$

 8,960,000

 

$

 2,240,000

 

 

 

 

 

 

 

 

III.

Annual Agency Payment to Developer Calculation

 

 

 

 

 

 

Net Housing Subsidy (I - II)

 

$

 12,376,000

 

$

 2,935,000

 

 

Interest Rate (1)

 

6.0

%

6.0

%

 

Amortization Period (FY 2006/07 - FY 2028/29)

 

23

 

23

 

 

 

 

 

 

 

 

 

Annual Payments

 

$

 1,006,000

 

$

 239,000

 

 

--------------------------------------------------------------------------------

(1)          Established in the Second Implementation Agreement to the OPA.

 

Prepared by: Keyser Marston Associates, Inc.

Filename: NoHo Commons_929 - 10% Phase II; Att 2 - Table 4; jlr; 12/16/2003

 

--------------------------------------------------------------------------------